Foreign Currency Encashment

My parents used to hoard foreign exchange. That time the Rupee was not convertible as freely and hence they saw no sense in liquidating this asset. Even today a lot of people from India & China invest in gold coins & bars because of the liquidity it offers internationally.
Luckily for our generation this is not a pressing need to bypass the RBI. Yet most of my friends do not convert back the few hundred dollars that they have saved in every business trip back to INR for multiple reasons.
1. Many do it because INR is a depreciating asset and hence they feel protected in a liquid asset that their wealth is more protected this way.
2. Some do it for tax planning purposes due to differential tax treatment for interest/returns earned abroad
3. Many people do it for global lifestyle purposes. Having a USD card enables them to shop abroad without having to worry about conversion charges, exchange rate etc. Also $1 looks a lot cheaper than INR65/-
4. I do it for vacation travel purposes. A family trip abroad can dis-balance most carefully planned budgets. Having a $1,000/- handy can absorb bulk of the shock. Also I book the air tickets 3 months in advance, hotels a month in advance to spread the fiscal shock by making the local expenses in a credit card. This way the travel expenses comes in manageable 4-6 installments rather than one crude shock.
My argument: A asset or money is of any value to me only if I can liquidate/encash it when I need it. I don’t get high by flashing the property papers or bond certificates of illiquid investment. Due to some recent real estate transaction, I need to make withdrawals and my $2,000/- Forex hoard has my eyes.
Wife’s argument: These are funds earmarked for travel. Hence parting with them is equal to parting with a dream of a posh vacation abroad. It will take a year of planning before we can have the next vacation and then also home loan EMI will scuttle at least the first 1-2 attempts.
To me my illiquid investment are ranked as follows: Sentimental assets, gold, kid’s education/marriage fund and Forex.  So a little pressure might enable me to encash them, but should I? After all the family deserves some luxury and holding on to it will not kill her hope. But the brain says the cash under mattress earns nothing and will not be probably used for a year. It will be cheaper to break in your piggy bank than to take a loan.
What will you do?