What percentage of salary should be spent on vacations?

In My Humble Opinion
21

I tend to look at a vacation as being some time you take off of work and intentionally go somewhere else with the express purpose of having fun and/or unwinding. I generally wouldn’t count family visits in that, even if they’re pretty fun (I happen to enjoy my family and my wife’s family).

So if you (Even Sven) went to the Houston/Galveston area to visit NASA, see the Kemah Boardwalk, check out San Jacinto, go visit Galveston and see whatever other tourist attractions the area has to offer, it would be a vacation.

If I go down there, even if I visit Houston and also the Galveston area, it’s more than likely to visit family, and probably wouldn’t be a vacation because I wouldn’t be seeing the tourist attractions.

22

why does it have to be some percentage? if you can afford the costs of a trip, then take it.

then again, I’ve never taken anything resembling a vacation so take what I say with a grain of salt.

23

As a rough estimate, if you have no consumer debt, you should be spending about 60 percent of your annual take home for expenses, about 20 percent for savings and retirement, and the remaining 20 percent on fun stuff, including vacations.

I am not a financial planner, I just read approximately one personal finance book every week.

5 percent on a vacation sounds reasonable to me.

24

You’d probably get better answers asking for a percentage of disposable income. 5% for someone up to their eyeballs in debt and living expenses is insane; 5% for someone who has a quarter mil annually that they just don’t know what to do with, is not.

FWIW, the one and only vacation I’ve had in my adult life cost under $600. About half of that was plane fare. Nowadays my disposable income is in the negative numbers, so I don’t take vacations.

BTW, I have no idea what the market is like generally, but I haven’t had employer paid benefits of any kind in five years. If I don’t work, I don’t make money. So, it might be a stealth brag.

25

Well, for paid vacation times for newspaper routes all you need is to live in Finland (or some other European country - no idea how many other EU countries have paid vacations for their newspaper delivery people but I’d imagine at least all the Nordic countries work the same way). I don’t earn enough to pay for any sort of real vacation with the paid vacation days though. Still, having 5 weeks of paid vacation per year is nice.

26

Heh, here in Holland I don’t really need to set money aside, as we’ll get (roughly) an extra months pay in May for exactly this purpose… seriously it’s called ‘vacation money’. This in addition to being for the time that you are away of course, this speaks for itself…

And yes, it is set in law that every employer needs to pay his/her employees this extra month of pay.

27

I usually travel to cheaper places than where I live so food and transport are often cheaper than at home. I am currently on holiday in Turkey and travelling to Moldova tomorrow. Most of my trips are 3-4 weeks long 2-3 times a year.

28

I think that is a better way to look at it. While there is no set amount you should spend on vacation, I do think you should try to get the best value you can out of most of the ones you do take. My vacations aren’t as long as yours but I take 4 - 6 of them a year. However, most of them are free are very close to it. They are almost always cheaper than staying at home. I went to Hawaii, Colorado, Texas and Las Vegas in the past year. The only plane tickets I paid for were to Texas because I got a steal on them (<$200 round trip). My plane ticket and hotel to Hawaii were free thanks to credit card promotional offers. The same was true for Las Vegas except I won a shit-ton of money and came up with a large profit even after all expenses were paid. I am going to the Virgin Islands in August and that one is paid for too using a combination of different tools I have.

The point is that you can travel cheaply if you you are flexible on dates and where you stay and keep a close eye out for deals. You can easily spend $5K on one trip to Hawaii or just get one for free by signing up for the right offers. I don’t know about you but I prefer free. I have a bunch of free tickets I can use to go about anywhere in the U.S. or Caribbean. I have never been to Disney World but I could take my kids next weekend if I wanted for essentially no money whereas other people save for a year or more to do the same thing.

29

That’s not even a stealth brag. Unless k stands for “kwacha”?

30

Damn, you’re grossing $1.33 million/year. Must be nice.

31

You are going the wrong way about it.
Make a budget, including what you want to save, and subtract that from your after tax income. What remains is what you have to spend on holidays.
It would be wrong to consider holidays an essential item of expenditure, so it shouldn’t be in your budget.
If you really really want to go on a particular holiday that will exceed your excess, you can cut down on other items, like drinking or clothes, to make up the balance.

32

It doesn’t matter honestly how much you make. Just put all your expenses on a credit card, and pay it off over time. If you have trouble making credit card payments, get a few payday and title loans. If that doesn’t work, find a nice local Italian family to help you out.

33

We make fairly decent money, but are in no way ‘rich’…we haven’t been able to afford a vacation in the past several years, frankly, but for me, it’s not a percentage but an absolute value. At this point in my life, I can’t see spending more than around $2500 on a vacation. In 10 years, maybe the equivalent of $4000 today. Unless I start making double what I make now.

34

Vacations are essential for mental health, IMO. During the years we couldn’t afford to stay in nice hotels, we camped. Camping is very cheap and highly underrated, IMO.

35

We go on a couple vacations a year, but we’re also frugal about how we go.

2013 so far:
January-6 day Cancun trip where we spent about $100 to go as my SO’s work paid for most of it.
April-Florida trip spent about $200 for airfare and car rental (my SO was traveling for work down there and we stayed with my parents).
May-Road trip to Green Bay, probably about $75 with half of that going to the hotel room that accepts dogs.
August-Flying back to Istanbul for a wedding which looks like it will cost us about $2k at the very most. (Bunching flight legs with miles and buying the discount leg directly really helps since we can get to JFK for free and then IST for $600). Probably another $600 for the hotel for the week and $200 for some side trips.
November/December-Probably another international trip so my SO makes platinum status on Delta again. (This year he’s gold and I doubt he wants to ever be gold again if he can help it).
We don’t count meals since we eat out at home about 4-5 nights a week and our hotels include breakfast that the costs aren’t much different there.

So, rounding up and adding another short vacation in there, so it’s about $5k a year which is about 3.33% of our income. I should note that I “buy” 6 days of PTO from work and sometimes I use 'em for trips and sometimes I just cash 'em in and have extra spending money.

36

Everyone has certain fixed and certain discretionary costs in their “budget”, even if they don’t make a real budget.

Housing, transportation, food and other utilities are mostly non-discretionary.

Entertainment, including eating meals out, booze, movies, etc. is all discretionary.

Then you have costs where you make a sort of choice, that some people consider discretionary, and others might not. These are things like savings, such as retirement or rainy day funds, or for college or other future life choices, maybe having kids if you’re younger, or planning for your wedding, etc.

After you’ve paid all of the stuff from the first pile, hopefully you have some amount left for the next two. Then it’s a matter of prioritizing the others. If you’re already socking money away for stuff in the last basket (or consciously choosing not to), then you can balance the rest of your discretionary spend. Vacations are important for your psyche, but the amount you spend on them is up to you.

Personally, right now, I am getting to that point where I am balancing out things like making sure we have enough funding for our dotage, paying for our kids’ college, and spending good quality time with our kids and other family while we can. We have a two week trip to Asia in a couple of months, but that’s going to be largely “sponsored” by my MIL, who specifically asked us to come out.

There is some discretionary spend on our part, where I’m throwing some extra money at it to get Mrs Shibb and the Shibblets upgrades for most or all of their flights, a couple of world class restaurants in Bangkok that I hope to visit, and a few nights in nice hotels. We’re also generally expected to bring gifts for all of the family out there, but still will spend less than 4-5K for those extras. It’s not something we do every year, but it’s not really “once in a lifetime”, either, and I won’t pretend that it is. It’s certainly more frequent as we’ve gotten older and can afford it more often. I do keep in mind that money I spend on this is not money available when I’m older, including any compounding of investment ($1000 now might equal much more in 20 years, invested properly).

37

This is an excellent point, but also one that needs to be weighed against things like “when I’m 65, will I be able to get on a camel and ride around the Great Pyramids?” I’ve been fortunate and able to get to see a lot of wonderful places around the world and while there I’ve seen those with one foot in the grave needing to rest outside of a great wonder.

38

That’s how I do it. After 10 years living in my house, I still haven’t completely furnished it, and in part that’s because I’d rather spend the money on nice vacations rather than on furniture for rooms I rarely use.

If nice vacations are a priority, you have to budget for them, which means in most cases something else (like designer clothes, meals out, or a fancy car) has to go.

39

Ironically, some of the cheapest trip options are the most demanding physically, while many of the most expensive vacations require little in the way of physical effort. So the broke 20-somethings can enjoy backpacking in the National Parks or hosteling their way through Europe, and save the guided tours and luxury cruises for when they’re older and less physically fit but have fatter wallets.

40

Absolutely, something to consider, although I think overall our country is now in some trouble because of what I think of as “the grasshopper and the ant” effect. Everyone wants to be the grasshopper.