How Much Should You Spend on Vacations? Ep #247

I am often asked how much a family should spend on vacations. 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. You might not have that income to spend on a lavish vacation.

But to spend any amount on a vacation, you need to budget. You cannot go into debt. So how do I do it? I will share a great strategy in this episode of Best in Wealth.

✈️ How much should you spend on vacations? How do you budget for them? Learn more in this episode of Best in Wealth! #PersonalFinance #VacationPlanning #WealthManagement Click To Tweet

Outline of This Episode

  • [1:04] We are heading on vacation to Europe!
  • [2:38] How much you should spend on vacation
  • [6:48] How we budget for vacations
  • [8:20] Be aware of luxury creep
  • [10:02] Be aware of entitlement creep
  • [11:33] Do not be a vacation scrooge

How to budget for a vacation

You cannot go into debt to purchase a vacation. I have done it. I had a great time. But when I got home, the guilt and regret sunk in. That is why I firmly believe you need to have a spending plan.

We set a monthly budget. Then, we have a separate spreadsheet that lists all of our non-monthly line items. It covers things like Christmas gifts, oil changes, car insurance, and vacations.

All of these items are added up. If the number is $12,000, we divide it by 12, and save that money in our “escrow savings account.” Every time a non-standard monthly expense comes up, we use that money to pay for it. Those things will not disrupt our budget.

🗺️ How do you budget for a vacation? I share my family’s strategy in episode #247 of Best in Wealth! #PersonalFinance #VacationPlanning #WealthManagement Click To Tweet

Be aware of luxury creep

If you are going to Disney, there are a lot of different hotels to choose from in Orlando, right? You can stay at the Holiday Inn and Suites or choose from numerous luxurious hotels and resorts. Do not let yourself get lured in. Budget within your means.

I spent a lot of time budgeting for our trip to Europe and I have saved for a couple of years. We are working within our budget. When it is all said and done, I will be proud. I am getting to spend time with my family within the budget I have set.

Be aware of entitlement creep

Do not let entitlement justify overspending on vacation. You are grinding every day at your job. You are exhausted being a parent. You deserve a vacation. But do not spend too much because you “deserve” it. It will eat you up inside.

It is not about keeping up with the Joneses. Just because your neighbor stayed at a five-star hotel and was waited on hand and foot does not mean you should. Do not allow yourself to be talked into something you cannot afford.

You know who you are. You are listening to a financial podcast. You are a budgeter. But you cannot be afraid to take a vacation. A vacation is investing in your family, investing in improving your mental health, and investing in lasting memories. Remember, vacations with your loved ones are an appreciating asset.

⭐ Don’t let entitlement justify overspending on vacation. You deserve a vacation. But let’s keep it within budget, shall we? Learn more in episode #247 of Best in Wealth! #PersonalFinance #VacationPlanning #WealthManagement Click To Tweet

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Podcast Disclaimer:

The Best In Wealth Podcast is hosted by Scott Wellens. Scott Wellens is the principal at Fortress Planning Group. Fortress Planning Group is a registered investment advisory firm regulated by the Securities Act of Wisconsin in accordance and compliance with securities laws and regulations. Fortress Planning Group does not render or offer to render personalized investment or tax advice through the Best In Wealth Podcast. The information provided is for informational purposes only and does not constitute financial, tax, investment or legal advice.

About the author, Scott Wellens

Scott Wellens, CFP® is an investment advisor and founder of Fortress Planning Group. After earning his Bachelor of Science degree from the University of Wisconsin-Oshkosh, Scott quickly ascended to become a Vice President of North American Sales at a major regional provider of telecommunications infrastructure. While financially successful in this role, Scott searched for ways to pursue his passion related to financial literacy and providing financial freedom for both his own family and others. During his search, Scott became curious about the significant gap he found in the financial services sector: he was unable to find a comprehensive financial planner that maintained a family stewardship lens without being attached to financial products. Scott decided to fill that gap by creating his own planning firm that maintains a strong passion for comprehensive, unbiased wealth planning that is genuinely client-centered.

Scott resides in Menomonee Falls, WI with his family. He is the father of three active and independent daughters who keep him on his toes. Scott is an active community member, serving on the Hamilton Education Foundation Board, serves as a Dave Ramsey Financial Peace facilitator and leads the All Pro Dad’s group at their local elementary school. Scott enjoys spending his free time visiting state parks with his family, reading, and watching the Milwaukee Bucks and the Green Bay Packers win ball games.

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