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Now that traveling has become popular, I was wondering if you have a budget for annual traveling or vacation spending. It doesn't have to be fancy trip, just vacation budget. How are you targeting it?
Growing up we didn't travel much. I did lot of traveling with in USA in my 20's mostly due to my job. After a years in the job, I realize I can take vacation at the end of my business trip & extend my stay at the city and explore. Saved me airfare money. I did not really budget & slowly the cost started adding up but I still justified it because its much cheaper than if I were to do it alone.
Now my job has changed & I got married. I still have the travel bug but I have to budget well. We don't want to be those people who don't get out much or only seen things with in driving distance from home but I also don't want to be those people who are mindlessly traveling because it makes them cool.
For us it's 10% of our take home salary. When our child was still in daycare it was 5%.
We break it down like this: 25% mortgage, 15% bills (including childcare), 15% food (includes eating out), 15% retirement, 10% travel, 10% rainy day fund and 10% miscellaneous (movies, clothes, going out, etc).
We seem to spend about 10~15% of our taxable income.... but our mortgage is also only 6% (and retirement is closer to 30%). Our aim is to enjoy life as much as possible now so we don't become like my parents. They worked hard into their 60's with grand plans to travel after that. Then, they became hermits in their dream retirement home... plagued by injury and intolerance of the discomforts that come with travel. But, we Also are planning on an early retirement in our 50's (15~20 years from now) and still being able to travel as we wish.
Anyway, that travel is further broken down, usually into one or Maybe two big trips. For the last 6 years or so we would spend 2~3 weeks with my folks in Montana as a ski trip. Cheap since the lodging and most food was "free" (can't ever make your parents take compensation), just the airfare and life tickets. And then we would take a ~10 day trip to a beach somewhere, Hawaii, the Caribbean, where ever caught my wife's fancy. We're mixing it up a little this next year and looking to spend a full month in Italy since the expensive part is the airfare... well, so long as you're willing to stay in the same place for the whole time (ocean-front villa for a month is about the same as ONE airfare), the limiting factor is time away from work.
Forget about what Other people think ~ you absolutely control that last bit about "traveling because it makes them cool" part, simply don't make your life revolve around posting to social media. Traveling should be about You, if you're not doing it for yourself then why bother?
If travel is important enough, you can justify moving it up the ranks in the budget.
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
34,742 posts, read 58,090,525 times
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Quote:
Originally Posted by Brian_M
We seem to spend about 10~15% of our taxable income.... but our mortgage is also only 6% (and retirement is closer to 30%). Our aim is to enjoy life as much as possible ... planning on an early retirement in our 50's (15~20 years from now) and still being able to travel as we wish.
... Forget about what Other people think ~ Traveling should be about You, if you're not doing it for yourself then why bother?
If travel is important enough, you can justify moving it up the ranks in the budget.
^^^ Plan your travel for your tastes and availability, no magic formula works for all.
Try variety of places as well as accommodation / style / method ...until you find what best suits you as a couple. (We do all from back packing / hostels to 5* resorts, cruises, and tours (seldom).
10 - 20% of budget is a good place to start, as it give you latitude to change +/-
We have always traveled a lot, and retired ~ age 50 and travel much more (All of 2016), usually about 50% on 'normal' yrs.
If you find you like to travel, consider getting an international job. It is nice to get PAID to travel, but it comes at a price (other stuff waits). We lived overseas 3x while kids were age 5 - 12. It was a good gig but very disruptive, tho worth it.
If you have kids... expose them to all types of travel and culture.
BTW: We usually travel cheaper than staying home (high property taxes at home). Our entire yr around the world came in well under $40k. I will pick up some PT work on an overseas assignment and cover the previous year's travel expense in a few months.
There are screaming bargains every week, so you can go where the price is best, if that fits your objectives. We picked up cross-country airfare to Cherry Blossom fest for $120 (+ spouse flies free this yr). Planned to go sometime, so this yr works!
Look for fun local cultural stuff to do, you don't have to be a tourist or eat / sleep in hotels.
Obviously your travel patterns and budgets change as you go through life, and there's no one answer that works for everybody.
After retiring I worked for a while as a self-employed (code for makes very little money) travel planner/consultant (also as a travel agent.) My clients ranged from fellow retirees to younger people with families, from employed people who traveled a lot for business to "once in a lifetime" and sabbatical trip people. Their travel aims and styles were all over the map - deluxe to backpack, short term to year-long (or longer) experiences, single-country to round-the-world.
The consistent advice I gave them was to make a plan, a three- to five-year plan, that included bucket-list destinations, desired travel experiences, contingencies for weekend or unplanned travel, and - importantly - timing. Timing can be a huge issue: your trip to the South Pacific can turn out very differently if you ignore the seasonal chance of typhoons, or the presence of deadly jellyfish in the summer on the Great Barrier Reef, mosquito season in Alaska or monsoons in SE Asia.
Make your plans in conjunction with a realistic budget. Allocating X percent of your take-home to travel is fine, but it's not always that predictable. And having a basic knowledge of things like currency exchange rates, hotel and airline affinity programs, credit card deals... all can enhance (or diminish) your travel experience hugely.
Just as an example, a personal story: Around 10 years ago my late wife and I decided we wanted to see the world while we were still healthy enough to do so. (She suffered from a chronic disease that could suddenly limit her ability to do so, which finally happened.) We also decided we'd spent enough time in the back of the bus, and would like to make air travel something we looked forward to instead of dreading.
I had just discovered "round the world" airline tickets that offered tremendous value, particularly if traveling in business class. These tickets, sold by member airlines in each of the big three alliances, allow up to 16 flights over the course of 12 months. Despite a lot of rules, they're very flexible when it comes to changes of schedule or route, much more so than ordinary tickets. And they're priced very differently depending on where you start and end the trip. The key rule is that you have to cross both the Atlantic and Pacific Oceans, once only for each, and in the same direction (east to west or west to east.) You can zigzag within continents, even backtrack in some cases, and stop over in places up to 15 times.
Anyway, you also earn frequent flyer miles on these tickets - lots of them, and by flying in business class you quickly achieve "elite" frequent flyer status, which further increases the number of miles you earn.
So following our "master plan" we traveled to wherever a "cheap" origination point was for these tickets, visited that area, picked up the ticket and flew home with it. We'd use the ticket within the US for several months for visits to family in New York or Alaska, or a sun break in California or the Caribbean. Then we'd take off over the ocean we hadn't yet crossed for visits to entries on the bucket list, eventually ending up back were we'd bought the ticket. We use some of the frequent flyer miles we'd earned to get home, or else pop for a new "RTW" ticket and repeat the process. Most of the time, though, we bought a new RTW ticket every other year, and used the miles we'd earned for travel in the off year.
In dollar terms, one of these RTW tickets in business class cost around $5,000. That got us 16 business- or first-class flights as part of the ticket, but we usually earned enough miles for 4 or more "free" flights in business or first class. So that came to a total of around 20 flights for $5000, or $250 per business/first flight. That's pretty good value for New York to Miami, pretty amazing value for LA to Sydney or London to Hong Kong. Using this approach we saw the world - Australia, Africa, South America, all over Europe and Asia... both comfortably and (pretty) inexpensively.
The point is not to brag, but to say that having our "strategic" plan helped us decide where to go on the ticket and when, and where to use "award" tickets instead of paying cash, or when to drive or take the train, for that matter.
People agonize over which washing machine to buy and will do a huge amount of research before buying a flat-screen TV. Many of the same people don't exercise nearly the same effort in making travel plans, even though the bottom line can be much higher. My approach is to move beyond the travel "wish list" stage to a budgeting and timing plan that's every bit as thorough as anything else that's important in life.
Location: Formerly Pleasanton Ca, now in Marietta Ga
10,351 posts, read 8,576,900 times
Reputation: 16698
Quote:
Originally Posted by Gardyloo
Obviously your travel patterns and budgets change as you go through life, and there's no one answer that works for everybody.
After retiring I worked for a while as a self-employed (code for makes very little money) travel planner/consultant (also as a travel agent.) My clients ranged from fellow retirees to younger people with families, from employed people who traveled a lot for business to "once in a lifetime" and sabbatical trip people. Their travel aims and styles were all over the map - deluxe to backpack, short term to year-long (or longer) experiences, single-country to round-the-world.
The consistent advice I gave them was to make a plan, a three- to five-year plan, that included bucket-list destinations, desired travel experiences, contingencies for weekend or unplanned travel, and - importantly - timing. Timing can be a huge issue: your trip to the South Pacific can turn out very differently if you ignore the seasonal chance of typhoons, or the presence of deadly jellyfish in the summer on the Great Barrier Reef, mosquito season in Alaska or monsoons in SE Asia.
Make your plans in conjunction with a realistic budget. Allocating X percent of your take-home to travel is fine, but it's not always that predictable. And having a basic knowledge of things like currency exchange rates, hotel and airline affinity programs, credit card deals... all can enhance (or diminish) your travel experience hugely.
Just as an example, a personal story: Around 10 years ago my late wife and I decided we wanted to see the world while we were still healthy enough to do so. (She suffered from a chronic disease that could suddenly limit her ability to do so, which finally happened.) We also decided we'd spent enough time in the back of the bus, and would like to make air travel something we looked forward to instead of dreading.
I had just discovered "round the world" airline tickets that offered tremendous value, particularly if traveling in business class. These tickets, sold by member airlines in each of the big three alliances, allow up to 16 flights over the course of 12 months. Despite a lot of rules, they're very flexible when it comes to changes of schedule or route, much more so than ordinary tickets. And they're priced very differently depending on where you start and end the trip. The key rule is that you have to cross both the Atlantic and Pacific Oceans, once only for each, and in the same direction (east to west or west to east.) You can zigzag within continents, even backtrack in some cases, and stop over in places up to 15 times.
Anyway, you also earn frequent flyer miles on these tickets - lots of them, and by flying in business class you quickly achieve "elite" frequent flyer status, which further increases the number of miles you earn.
So following our "master plan" we traveled to wherever a "cheap" origination point was for these tickets, visited that area, picked up the ticket and flew home with it. We'd use the ticket within the US for several months for visits to family in New York or Alaska, or a sun break in California or the Caribbean. Then we'd take off over the ocean we hadn't yet crossed for visits to entries on the bucket list, eventually ending up back were we'd bought the ticket. We use some of the frequent flyer miles we'd earned to get home, or else pop for a new "RTW" ticket and repeat the process. Most of the time, though, we bought a new RTW ticket every other year, and used the miles we'd earned for travel in the off year.
In dollar terms, one of these RTW tickets in business class cost around $5,000. That got us 16 business- or first-class flights as part of the ticket, but we usually earned enough miles for 4 or more "free" flights in business or first class. So that came to a total of around 20 flights for $5000, or $250 per business/first flight. That's pretty good value for New York to Miami, pretty amazing value for LA to Sydney or London to Hong Kong. Using this approach we saw the world - Australia, Africa, South America, all over Europe and Asia... both comfortably and (pretty) inexpensively.
The point is not to brag, but to say that having our "strategic" plan helped us decide where to go on the ticket and when, and where to use "award" tickets instead of paying cash, or when to drive or take the train, for that matter.
People agonize over which washing machine to buy and will do a huge amount of research before buying a flat-screen TV. Many of the same people don't exercise nearly the same effort in making travel plans, even though the bottom line can be much higher. My approach is to move beyond the travel "wish list" stage to a budgeting and timing plan that's every bit as thorough as anything else that's important in life.
Planning is pretty fun, too.
Great info! Repped you for this
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