Dear Dollar Stretcher,
I am looking for guidelines on how much money to spend on travel/vacation. We
are a family of three living on about $45,000 per year. Twice each year my son
and I travel to see my family. On one of those trips my husband accompanies us.
We spend almost no money once there. So that is 5 round trip plane tickets each
year. In addition, I would like for the three of us to take a family vacation
each year.
My question is how much is reasonable to spend total? Are there any
rules-of-thumb? Percentages or something? We have no debt other than our home
and are vigorous savers, which leads to guilt when spending. So I want to know
how much is reasonable to spend so that I don't feel guilty about it. Dora
Dora's right. Feeling guilty about your vacation spending sure can ruin a
good time!
According to the Travel Industry Association we spent $584 billion on travel
last year. The average family will spend in excess of $2,200 a year on an
extended vacation. Despite a recession and terrorist activities, 57% of
Americans plan to take a pleasure trip during the first half of 2002. That adds
up to a lot of vacation spending!
But, average spending numbers can be misleading. In many ways travel is a
form of entertainment that happens away from home. And every family has
different patterns of recreational spending.
For instance, some people prefer to spread their activities throughout the
year. They spend on movies, sports and other entertainment regularly. Other
families save all year and splurge on a vacation. Still others have little to
spend and make the most out of long weekends while staying close to home. The
goal is to get the most enjoyment from the money you spend. So choose what works
best for you.
Can Dora come up with an amount that should be budgeted for vacations? Sure!
According to the U.S. Statistical Abstract a little less than 10% of the money
we spend goes to recreation. So, in Dora's case that would be in the $4,000 to
$4,500 range. Remember, that includes all forms of recreation so she'll need to
subtract money going for other forms of entertainment.
While it's possible for Dora to apply that number to her family, it might not
be a good idea. A better method might be to see how their recreation spending
fits in with the entire budget. For instance, Dora's family doesn't have a car
payment or credit card debt. So there's more money available for things like
vacations. She probably can afford to spend a little more than average.
There's another way for Dora evaluate their spending. That's to look for the
warning signs that you're spending too much. A big one is paying for the
vacation after you've taken it. It's hard to have a good time when you know that
you're spending money that you don't have. Saving the money before the trip can
free you to thoroughly enjoy yourself.
Another warning is when saving or paying for your vacation becomes a burden.
Providing food, shelter, education and health care to your family comes before
trips to visit family and friends.
Once Dora's convinced that she's not spending too much for vacations, what
can she do to relax and enjoy her trips?
Know your budget before you leave. Plan your spending for transportation,
lodging, food, amusements and souvenirs. If the plans are reasonable there's no
reason to second guess them later.
Remember that the rules are a little different on vacation. Eating in
restaurants will be expensive. Sometimes you won't be able to find the absolute
cheapest motel in town. And, that's ok. As long as you're staying within your
budget and not being foolish don't fixate on how much you're spending. Don't let
unnecessary money concerns ruin a good time.
That's not to say that Dora should abandon her frugal life style. There's
nothing wrong with a lunch of sandwiches at a city park or scenic turnoff. Her
family may find that needless spending makes them uncomfortable.
Finally, Dora might want to earmark some of the money that she routinely
saves for use on vacation. That will help her to stay disciplined during the
year. And she'll be more comfortable spending money that's been specifically
saved for this purpose.
Hopefully Dora will make some wonderful memories with her family. Bon Voyage!
