Tango

I am working on our travel plans for the next year and was rather startled at the price tags.

I started wondering, while we could afford these trips, should we really be spending this much on travel (which we love)...and is there some sort of formula to use to figure out a budget based on income.

What do you do?

A_Traveller

I don't think there is a set formula. As has been said many times on this forum in response to similar posts it all depends on your priorities.

Many of us consider travel to be an important part of our lives and therefore we live rather simply, don't spend much on "things", don't eat out much, don't drive expensive or new cars and set aside a big portion of our paycheck for travel.

Of course it is also helpful if you are a "trust fund baby" (just kidding).

trg

I book hotels, cars and special events ahead of time and know the exact costs. I then allow about $100/day for food, souvenirs and incidentals. Somedays it is more, someday less - just a good average for us.
As far as affordibility, that is up to the individual. We tend to take more frequent shorter trips of 3-5 days than than a few longer ones. Gives us something to look forward to and spreads the costs out more.

ilovetulips

Have a baby and become a stay at home mom. If that doesn't put the brakes on your budget, not sure what will! Seriously though, it is such a personal decision. My husband and I wanted to visit Europe before we had a little one so we saved our money and purchased things a little at a time. One month airfare tickets another month hotel rooms, etc. It was an expensive trip around $6000 when it was all said and done including gifts for family and friends, but it was worth and we probably won't take another trip like that until our son is much older.

That being said, many of our other trips were much less expensive and even though some people may gasp, we didn't even take a vacation every year because of time or money.
Bottom line, only you know what you are comfortable spending on vacation and there is no right or wrong. If you have the means, keep traveling!

suze

Depends how bad I want to go somewhere. I don't think there is a set formula to use, because people's travel desires are not consistent with their income. Some people would go into debt for a trip to Europe. Some wouldn't spend $50 more than they had saved.

maria_so

Tango,

I'm sure it's different strokes for different folks but for us, we actually set up a travel account with our bank that we have our joint account in. Each month (or paycheck) a certain amount comes out automatically to the travel fund. There is always a base amount that is taken out but depending on where we want to go that year, we increase the amount (or set it back to base). So for example, visiting my DH's family in the UK always puts a huge dent so we up the monthly for that year, etc. We've found this to be a really good thing for us because we get used to not having/seeing that money and by the time the trip/trips come, most of it is already covered and all we have to worry about is shopping money. We pay all the credit cards in full monthly too so we don't feel bad about not paying the card when we had money set aside, etc.

On top of that, like another poster said, I plan the trip way ahead of time to get the best deals and check often to see if I can get it lower somewhere else (outside of flights, that is).

I'm interested to see what others do. Great question!

flep

I agree traveling is definitely expensive and no matter what budget u set u inevitiably spend more than u bargained for. I say be realistic about what u can spend but in the same respect treat yourself. Traveling is a wonderful experience and that is priceless. In other word put it on a credit card and worry about it later. haha. life is short enjoy it.

like_2travel

Tango,

We try to prepay as much of the trip as we can. Shop for and buy the airfare well ahead of time. Save the rest. We love to travel and make it a priority - that being said, I drive a minivan instead of a luxury car. I've taken some expensive trips and some budget trips. For me its also fun to plan the travel, and the budget. I put each trip budget on a spreadsheet.

When the kids were young, we took them to the National Parks, we'd save by having a picnic once a day. It also freed us from the constraint of waiting in long lines for limited concessions.

When we were first starting out, we went camping. It cost very little and we went to a lot of interesting places.

For those on a budget, look for museums with free admission, free concerts and festivals. Most major cities have them. Example - the Kennedy Center in DC has a free concerts.

We rent a house when we go to the beach - and have the option to cook or dine out as we desire.

For Europe, airfare was a major expense. I used sidestep.com to compare fares and check back frequently. In Paris we rented an apartment instead of a hotel.

I always bring money to splurge on something random and fun: nice meals, jewelry, or renting a convertible if I'm going to California or Florida.

I wouldn't go into debt, tho.

I'd rather travel than drive a BMW even though I can do both.

nytraveler

Your question is so general it's impossible to give an answer.

What stage of life are you at?

What are your other financial needs and goals?

How much truly disposable income do you have?

How much does travel matter to you versus other expenditures?

Some people have 3 kids, want a large house and 2 late model SUVs while they're saving for college funds. If that's your focus, maybe travel takes a back seat for a while. Or, you do basic low cost travel.

Other people don't mind living in an apartment and drive an 8 year old car in order to have money to travel.

And, what startled you about the price tags? There are more and less expensive ways to do almost every trip (within a reasonable range).

For some people it;s worth taking a second part-time job in order to have money to do a lot more travel.

So - everyone's answer is different.

The only thing I can tell you is - when people are 80 they don't say I wish I had stayed home and bought a big new car instead. But, they may say I wish I had seen Paris.

nytraveler

And sorry - we don;t budget for travel. It's a part of our life that we as often as we can get the time. But we're at a time in our lives when we've worked hard for almost 30 years - and have the disposable income to travel as we please.

Rich

The words "Travel" . . "Planning" and "Budger" never show up in the same sentence in my vocabulary.

dawnnoelm

I love your last line
NYtraveler..

"The only thing I can tell you is - when people are 80 they don't say I wish I had stayed home and bought a big new car instead. But, they may say I wish I had seen Paris"

I think it is so true.

I watch the budget when we travel/planning. Look for deals. We generally stay in apartments when we travel as a family, for a variety of reasons, it is more comfortable for a longer stay, eating in is more comfortable for us as well. I get weary on eating every meal out on vacation and just want a bowl of cereal some mornings...

Tango

in answer to NY Traveler...

I guess we are kind of in a weird spot. We are in our 40s and have one 5-year old child. We have no debt except for our house...and that's why it is weird to me.

Before, when we didn't have a lot of money it was easy to figure out a budget, but now that we have more money (not so much time though!) it's actually harder. I was looking at cruises and to stay in the best room for 3 was $7000. Do we just do it...or stay in the bargain room? And, do we now pick the $250, $350 or $450 hotel room?

We are saving for college and don't think it will be a problem. I drive a $22K car and don't want a Lexus or fancier digs.

Maybe some others have been in my position. I am not complaining...definitely not. Just curious how other do it.

I really appreciate all the answers!

sludick

I like maria_so's scheme of having the money put into a travel account, although that's not what we do. First, we plan way in advance -- I usually have one trip in the planning/paying stage a year out, another in the concept stage two years out. That way I can be on the lookout for deals. We do own timeshare, and like to spend perhaps a week at a timeshare exchange, then have another week's vacation tacked on that requires us to drive a bit. Since I travel for business frequently, we usually have free airplane tickets and some hotel rooms. I also use Priceline quite a bit for hotels. Overall, the goal is to have as much as possible paid for ahead of time, leaving only food, gas, incidentals, and perhaps the rental car for the vacation itself.

Here are a couple of examples: This fall we're going to spend a week in Sedona (timeshare), then a week at Yellowstone (timeshare). Free airline tickets. At this point everything is paid for except those items I mentioned. In May we're going on an Alaskan cruise. Got really good fares on Frontier going to Alaska, free ticket coming home out of Seattle. Have rooms in Vancouver and Anchorage via frequent traveler points, Priceline another 2 nights. Car in Anchorage free thanks to frequent business travel points. We have everything paid for at this point except a night at a bed and breakfast. That includes the cruise, 2 train trips, air travel, and several excursions. This one was expensive -- I'd say we've paid out around $4000 to date.

However, as others have said, travel is a priority for us. We don't go out to the movies, concerts, etc. We do drive BMWs, but they are not new and are completely paid for. Kids are grown, but we still have to feed 6 hungry cats (plus catsitter fees when we travel).

I'll be interested to hear from others as to their strategy.

toedtoes

I do similar to Maria_so. I have a set amount of money automatically deposited into a special account. I started out putting just enough to cover my "major bills" (car insurance, property tax, home insurance, etc.) back when I didn't have extra income and wanted to be sure to have enough to pay those.

Then, when I started getting raises, I would put an additional $10-$50 dollars into the account each month. I used this for emergency purchases (car breakdowns, etc.). As I went, my input started outperforming my output. I have a "minimum balance" that I mentally place on the account. Anything over that balance is my budget for my trip that year. Some years, I have $2,000 and some years I have more.

Grcxx3

what's a budget????? The word is definitely NOT part of my vocabulary!!!

Sue_xx_yy

A travel budget requires market research. Research into the cost variation between places and between standards of quality.

But I don't think this is what you are asking.

I think you want a definition of 'disposable income' for someone in your specific life circumstances. This is a pretty complex question. Perhaps what you could do is sit down with a financial advisor who can help you predict how your basic costs will rise as your kid gets older. Or how to build in a cushion for unexpected misfortunes like being unemployed for a period of time. Serious house repairs or renovations that might be forthcoming, and so on.

I understand your desire for certainty, the need for a formula. However, since there's no way of really knowing for sure, what 'disposable' income really is, you must be prepared to accept a certain amount of risk. Obviously, the more you spend, the higher your risk. It's a little like the stock market: you are after as much return for as little risk as possible. Paying attention to return without considering risk is stupid, but being a slave to your fears isn't the way to go, either.

The one thing I know for sure is that the 'law of marginal utility' usually applies to travel as elsewhere. In other words, for you to take the cruise or the trip AT ALL, likely accounts for as much as 65 to 70 per cent of your overall satisfaction. Upgrading your accomodation from what you consider 'steerage' to what you consider 'moderate' might account for the next 25 per cent. (I say, 'what you consider' because quality is a subjective thing. One person's steerage is another person's luxury, and so on. Don't fall for company advertising that insists their pricing constitutes some kind of objective guide.)

Anyway, that leaves you with the remaining 5 to 10 per cent of increase in satisfaction that comes from upgrading from your version of 'moderate' to your version of 'luxury'. In other words, you can pay a considerable increase in money, but not really get that much more 'bang' for it.

NorthwestMale

The original question wasn't specific enough to keep us from babbling needlessly in response, so I probably will...

A first angle of mine is to poll all of the airports in states surrounding my general destination... and I combine airfares and rental car costs to find the lowest combined price for those two essentials.

(sometimes airfare is more expensive to get off a plane in Cincinnati than it is to stay on that same plane and get off in Louisville, for example)

Another thing I do is use Priceline.com for hotels whenever possible. I don't know that it saves me actual "money" but I do know for certain that it lets me stay in much nicer hotels than where I would have otherwise stayed.
WWW.biddingfortravel.com helps a lot with regard to Priceline.

I am guessing when I say that "Travel" is probably a worthwhile investment for a family as it somehow 'refreshes' the energy level of most involved (***even when that means being the 14yo girl in the backseat who holds the map upside down while dad yells at her to navigate) {it's just different than having dad yell at her for not understanding her homework}

Travel budgeting is probably a good lesson too, and it is something you can share with children and involve them in as well. Same for travel choices and decision-making.

So keep traveling!

NorthwestMale

Tango,

I just read your second post in this thread and learned more:

Darn, the child isn't old enough to really help in the decision-making...


And given the offered specifics you shared, I think I would use Priceline.com and tryyyyyyy to get the $250-$450 hotel room for $100-200... while saving the rest of that money for travel opportunities where you simply HAVE to pay the $7000 for the cruise.

Sometimes there are enough people offering the travel service you want, AND there are enough others wanting the same service, that you can comparison shop for the very best rates. At other times your interests and needs are so unique that you are faced with heavier costs and fewer options.

Just have fun... and the earlier you buy a map of your destination, the more entertainment you'll have during the 72 hours or 11 months prior to your departure!!

Tango

Sue_xx_yy - you get what I was asking! I wish there was a formula that no matter how much or how little money you have, you could know how much to spend on a trip without feeling uncomfortable. And you're right there probably is no exact formula.