I’ve long made the case that vacations are invaluable because of the many unsurpassable emotional, physical, mental, familial and even spiritual benefits that can be gained from them.
But this is the real world, and we all face very real limitations. There are limits on how much money we can spend, how much time we can take off from work, how far we’re willing to travel, what kind of activities we are willing or able engage in, and how far we’re prepared to venture outside our comfort zones?
Since this is a big time of year for both financial and vacation planning, it’s worth looking at how you can get the invaluable benefits of a great vacation within whatever real world limitations you face.
First, the question is not whether you can afford to take a vacation this year, but whether you can afford not to take some kind of vacation. You don’t have to be rich to travel for leisure purposes. But you do need to understand that no matter how much money you make, a vacation is not a want, it’s a need.
A good rule of thumb, especially for middle-income families and those of even more modest means, is that you should spend about 8% of your annual income on leisure travel. Call it the 8% rule.
So, if your family’s income is $150,000, you should plan on spending around $12,000 to refresh you mind, body and spirit.With an average of 3 vacations per year that would be $3,000 to $4,000 per vacation.You may be thinking “I can’t get much of a vacation experience for “just” $4,000.” Boy, are you in for a surprise!
That’s enough to get you a full trans-Atlantic crossing for two - in a balcony cabin – or a European Cruise aboard one of the classically elegant, yet modern “Queens” of the Cunard line; the 2,700-passenger Queen Mary 2, the 2,100-passenger Queen Elizabeth, or the 2,000- passenger Queen Victoria.
A week-long Rome-to-Venice sailing around the Italian peninsula in August in a very nice Verandah cabin aboard the sophisticated but relaxed Westerdam of the Holland America fleet costs just less than $2,000 per person. That leaves enough money leftover for some serious shopping or fascinating shore excursions along the beautiful Dalmation coast of the Adriatic Sea.
So, how do you decide what you’ll do for vacation this year? Here are few basic and practical steps for planning a great vacation experience.
1.List places you’d like to go and/or experiences you would like to have (mountains vs. beach, resort vs. cruise, camping vs. hotels, etc.). It’s okay to include some “dream” places that you know are out of your financial reach today, but be sure to include some that you think you can afford, and even some you know that will cost less than what you can afford.
2.Set your budget for this year’s vacation. Multiply your income by 0.08 (or some other percentage of your income that you’re comfortable spending on leisure travel).Narrow the field of vacation destinations for this year accordingly. Save your list for future years’ consideration.
3.Do your research. Visit websites of major travel providers like cruise companies, resorts, airlines and hotel chains. Check out the websites of tourism organizations and major destinations. Call or visit a travel agency focused on leisure travel. Determine what best fits your budget and schedule and what gets you (and others going with you) most excited.
4.Save your money.Build you vacation into your weekly/monthly/annual budget so the money will be there to take the vacation you need (remember, your vacation is a need, not a merely want).
5.Enjoy your trip. Because you’ve done a thorough job of vacation planning, you can relax and enjoy all it has to offer without worrying about the cost or the details.
See you onboard.
FAQs
A good rule of thumb, especially for middle-income families and those of even more modest means, is that you should spend about 8% of your annual income on leisure travel. Call it the 8% rule. So, if your family's income is $150,000, you should plan on spending around $12,000 to refresh you mind, body and spirit.
What percentage of income should be spent on vacations? ›
The 5-10% Rule
If you're striving to meet any important financial goals, like paying off debt or saving for a home down payment, keeping this closer to 5% can help you reach those goals more quickly. For example, if your annual post-tax salary is $50,000, you could aim to spend around $2,500-5,000 on trips this year.
What is the rule of thumb for vacation budget? ›
Is there a rule of thumb to employ in setting a budget for your trips? Some financial experts recommend this one: spend 5-10% of your net income on vacations. If you're in debt, your budget should be closer to the 5% mark; if you're not, it can be closer to the 10% end of the range.
Is the perfect length of a vacation 8 days? ›
Eight days is the ideal
The study found that: "...health and wellbeing increased quickly during vacation, peaked on the eighth vacation day and had rapidly returned to baseline level within the first week of work resumption."
What is the ideal amount of vacation time? ›
Research says the ideal vacation length is 8 days. Here's what experts say. - The Washington Post.
What is the 50 30 20 rule? ›
The 50-30-20 budget rule states that you should spend up to 50% of your after-tax income on needs and obligations that you must have or must do. The remaining half should dedicate 20% to savings, leaving 30% to be spent on things you want but don't necessarily need.
Is 250k a year upper middle class? ›
In general, upper middle class, based on having household income in the 75th-90th percentile in the U.S., means earning around $150,000-$250,000 per year.
What is a realistic budget for a vacation? ›
How much does the average vacation cost? The average vacation for one person in the United States costs about $1,986 per week. A vacation for two people will typically cost around $3,971 per week. How much does the average vacation cost?
What is a vacation rule? ›
The Vacation Period rule is a standard functionality in Oracle Business Process Management (BPM) that allows users to set a delegate for approvals that come to them during a defined period of time.
Is 5000 enough for a vacation? ›
On a $5,000 budget, you'll be able to spend a week at a nice all-inclusive resort while still having extra cash for airfare and day trips.
A seminal 2012 study published in the aptly-titled Journal of Happiness Studies reports that for most vacationers they studied, the impact on health and well-being peaked around day eight and that these feelings return to baseline after one week back at work (even for a long holiday of three weeks or more).
Is 20 vacation days a lot? ›
If they're talking specifically about vacation days, then 10-20 days of paid vacation is very good. You'll be getting anywhere between two and four weeks off work per year, all of which is paid – and it doesn't include sickness or holidays! In conclusion, it is normal to receive around 10 vacation days per year.
Is a 3 day vacation worth it? ›
The 48 hour getaway can be highly underrated. Don't knock it til you try it. With the right planning, a weekend trip can be the solution to seeing the world while still maintaining your regular 9-5 job.
How many vacations does the average American take a year? ›
The average American takes 17 PTO days a year3 while workers with unlimited PTO take 10 days off. We can see that just because an employee has an option to take as much time off as they want doesn't mean they actually will.
What is the standard vacation policy in the US? ›
The average vacation time in the US for separate leave plans
11 days per year after 1 year of service, 15 days per year after 5 years of service, 18 days per year after 18 years of employment, and. 20 days per year after 20 years of service.
How much PTO do Europeans get? ›
European Union legislation mandates that all 27 member states must by law grant all employees a minimum of 4 weeks of paid vacation. Workers are entitled to 10 days paid annual leave for each complete year of service.
How much does the average person spend on vacation? ›
The average cost of a one-week vacation in the U.S. is $1,991, but it could be as little as $739 or as much as $5,728. ¹ If you're traveling as a couple, the average vacation cost for two people is $3,982. Cost varies greatly depending on where you go when you travel and what you plan to do while you're there.
What is a reasonable annual vacation budget? ›
If you're looking for a simpler way to figure out how much you'll have to spend for vacation annually, a common rule of thumb is 5% to 10% of your net (after taxes and other withholdings) income.
Is $10,000 enough for a vacation? ›
With 2.5 to 5 times as the recommended multiple to spend on vacation, we should aim to spend closer to $10,000 recommended ($4,000 X 2.5), and up to $20,000 ($4,000 X 5) maximum.
How much of your net worth should you spend on vacation? ›
While that is entirely personal, most experts recommend that 5–10% of your net income can be spent on vacations. Many factors may change this number. Maybe you have a large family or your kids are into expensive sports.
