Most of you know I hate budgets. But they serve a purpose, and today we are going to look at how much you can spend on travel.
Because everyone needs to take a vacation at least once a year. Travel gives you perspective. It shows you how people think and operate in other places. And without it, your world gets pretty small.
Take Megan, for example—the girl who used to cut my hair here in Myrtle Beach. She did a great job, but she never cracked a smile—no sense of humor. At some point, Megan told me she had never been on an airplane. And not because she drove all over the country. She was 26 years old, born and raised in Myrtle Beach, and she had only left once to visit Florida. Once!
Some people hate to travel—they complain about TSA, lost bags, cancelled flights. But the more you travel, the better you get at managing those inconveniences. Bad things happen, but you learn to roll with it. And I’ve had some pretty bad experiences…
At one point, I was flying to Atlanta to catch a connection. I looked out of the window and saw lightning hit my plane. All of the plane’s electricity blacked out for a moment, then the pilot came on and said everything was fine.
Five minutes later, the co-pilot exits the cockpit and heads for my row, because I’m right next to the wing. She looks out the window, I look out the window, and we see fuel spraying out of the wing.
Next thing you know, we’re making an emergency landing about an hour outside of Atlanta. There were fire trucks everywhere, and all I could think was: This is going to ruin my day. But I got off the plane, got my bags, got onto the bus waiting on the tarmac, and headed to the Atlanta airport… where I made my connecting flight.
Like I said, you learn to roll with it.
You can spend up to 2% of your income on travel. That’s for personal travel—it doesn’t include work stuff. So, if you make $100k, you can take a $2,000 vacation every year. That might not sound like much. It won’t get you to Turks & Caicos. It won’t even get you a week at Sandals. But you can have a perfectly acceptable family vacation for two grand.
Look, checking into a fancy hotel room is one my favorite things in the world. But I also love camping. It’s great—you’re eating ribs, roasting marshmallows, jumping in the lake. And it’s super cheap. A campsite is usually $20 a night or less.
The point is, you can travel on a budget, especially when you’re young, and have a fantastic time. And as your income increases, you can stay in nicer hotels. Just make sure to increase your standards slowly. It is very difficult to reverse course and check into a Holiday Inn once you’ve stayed at the Four Seasons.
Personal finance is mostly about getting the big things right—the house, the car, the student loans. Well, travel is one of the big things, too. There are families who makes $80k a year and drop $8,000 on a trip to Hawaii. That is 10% of their income. And that is how they wind up in credit card debt.
If you make $50k a year, you should probably just go camping, and that is fine. I still camp sometimes. Just don’t be like Megan, who never left town.
And don’t put off travel until you retire, either. Retirement is a pretty small window. After 5–10 years, you’re going to be pretty old, and it might not be as much fun. So, save your money and take a vacation. It’s the best thing you can do.
Jared Dillian