How Much Money Should You Spend on Vacations?

You’ve probably heard that spending money on experiences generally makes us happier than spending it on things, so we should really go to town when it comes to vacation spending, right? Honestly, that depends, on a lot of factors. Ask yourself these questions before you plan your travel budget.

What Do I Value?

It’s true that spending on experiences tends to make us happier than spending on things, but the kind of experiences that matter to you may or may not involve travel. One reason experiences make us happier than things is that the vast majority of experiences involve other people and therefore contribute to some of our deepest desires and values as human beings: those of connection and belonging.

To that end, some people will find their money is better spent on a local, and perhaps ongoing experience. Joining a club, taking a dance class, or participating in a sport where they’ll become part of a team with like-minded people. Travel can help you connect and belong too, which is why taking a trip with your partner, or as a family, may be worth a lot more to you than a solo experience.

What else do you value? Can you tie it in to your travel plans? There’s a significant ‘voluntourism’ industry these days, because people love to volunteer for a cause while they travel. Or is family your top priority? If so, you might want to spend that vacation leave visiting relatives in another state or country. The important thing here is something we’ve discussed before – mindful spending. When we spend on the things we really enjoy or care about, it invariably seems like money well spent.

How Do I Like to Travel?

It’s surprising how few people really ask themselves this question. Travel is one of those elements of life where we’re often swayed by what other people like. This has never been more so than in recent times, when all our friends and acquaintances are showing off their travel adventures on Instagram. It’s easy to decide we need to do what they’re doing, and consequently spend what they’re spending. But taking some time to really think about what sort of travel experience you love can actually save you money.

Do you really want to jet off to Hawaii, or is camping in a local state park more satisfying for you? Do you have a bucket list of places you simply must go to, or do you love the spontaneity of checking out sites like LastMinute.com and just taking off to a country or region you’ve never even considered before, for a price that’s an absolute steal.

What Else Am I Budgeting for Right Now?

Beyond your regular monthly budget, what are you saving for right now? Many people like to use a pots of money approach to savings where they actually have a different saving ‘pot’ for each of the things they’re working towards. How you set this up in practice is up to you. There are banks, and banking apps, that help facilitate it, or you can actually set up different accounts or investment plans for different aspects of your life.

You might have a vacation pot, an education pot, a new home or car pot, or a pot marked ‘boat’, ‘bike’, or ‘wedding’. You might have a pot marked ‘Versace suit’ or ‘adopt a puppy’. Most of us are more motivated to save when we have concrete plans we’re working towards, and even more so if we can clearly visualise what those plans are and see steady progress towards them.

How Can I Save Money on Travel?

There are a few travel hacks you can use to save on everything from flights to hotels to local attractions. They include shopping around, using travel comparison sites, converting credit card loyalty points to air miles, and checking out discount sites for travel deals.

You can also consider traveling at non-peak times, taking mid-week flights, and being flexible on where you go, and how long for. Examine how flexible you are when it comes to traveling, and where you’re just not willing to compromise, to give yourself an idea of where you can save money, without ruining your vacation.

If you’ve answered all these questions, you’re well-placed to work out a vacation budget based on your values, travel style, other saving commitments, and where you’re willing to compromise. And you’re more likely to enjoy your travels, wherever they’re taking you this year.

Karen Banes is a freelance writer specializing in entrepreneurship, parenting and lifestyle. She writes articles, website content, ebooks and the occasional award winning short story. Her work has appeared in a range of publications both online and off, including The Washington Post, Life Info Magazine, Transitions Abroad, Brave New Traveler, Natural Parenting Group, and Copia Magazine. Learn More About Karen