How Much Should You Spend on Vacation?

We've been looking forward to a possible summer trip.

Budget is always a concern when we think about destinations, lengths of trips, activities and accommodations.

What is a reasonable amount to spend for travel and vacation?

What is the best way to set a budget?

Financial experts suggest that you spend between 5 and 10% of your income on vacations.

If you are in debt, you should budget closer to 5%; if not, you can spend closer to 10%.

If your annual net income is $80k, you can spend between $4-8k on vacations.

This number is a useful guide. It will vary depending on your financial and personal circumstances.

You should also consider other factors when planning your budget for vacations.

Plan your entire year. This 5-10% figure is for a full calendar year. When planning your vacation budget, don't just think about the trip you are taking right now, but also the other trips that you would like to take throughout the year. This will help you determine how much you can spend on each. You may have to compromise on your summer vacation if you are going to spend a lot of money in the spring for a Disney trip.

Take into account the stage of your life. You may spend less money on vacations if you have little ones still in diapers. Instead, plan a more low-key trip closer to home. You can save money for a better trip when your children are older.

You could spend more money on vacations if your children are in highschool and you want them to enjoy their time with you before they move out.

Never go into debt to purchase a vacation. Experts in finance agree that you should not put a vacation onto your credit card. As inflation reduces income, more and more people use credit cards. The nation's balance on its credit cards recently hit a record. The APR for credit cards is also at an all-time low, so putting a trip on a card will cost you more over time.

Once you have the money, you can book your trip.

Beware of the luxury creep. . . It's easier to move up the luxury scale of a holiday than to return down. You may feel that a 2-star property is acceptable for the moment. Once you have stayed at a 4-star hotel, a 2-star will feel like a disappointment. If you upgrade to an Economy Plus flight seat, Basic Economy will feel more cramped.

There's no harm in the occasional splurge. And a few premium items won't ruin your budget travel plans. When booking your trip, it's important to consider the sustainability of your choices, not only for your immediate trip but also in the future.

. . . And entitlement creep. You can easily justify a large vacation budget. You're working long hours. You've felt really stressed. You feel like you deserve a trip. You feel like you deserve a trip.

Everyone needs breaks and downtime. You can have these cheap stayscations or exotic trips. The ability to fly to the beach has only been a recent invention in human history. Millions of people have lived and even died in their home towns or villages. Even though nice trips are an important luxury, in the big picture, they still remain a luxury.

Keep up with the Joneses is not a good thing. Travel photos are a large part of the social media posts that people post. They can give you a false impression of what people do with their lives. You may feel that everyone you know is on the road.