Thursday, February 12, 2015

How much should you spend on Vacation?

There is no hard and fast rule on how much money you should spend on vacation in my book; the only rule concerning vacations is that you should take them as often as you need them.

I use my vacation category for day-trips, workshops and short stay-cations, all of which help me to rest and rejuvenate my energy. A vacation doesn't always have to entail travel to a far away place, the whole point of it is to allow yourself time to be grounded and unwind.

In this regard, the importance of vacation cannot be understated, and therefore funding a vacation category even when you are in debt should come under your necessities. See my point above that it need not be a trip to Paris to constitute a vacation.

Some financial gurus are against this, seeing vacations as a 'treat' that you can easily defer until you have gotten yourself out of debt. This mentality worries me, because it makes it seem as if you were terribly naughty to get yourself into debt and now must undertake a period of penance before you are allowed to 'enjoy' life again.

While I acknowledge that taking frequent trips is why some people are in so much consumer debt, and that there needs to be a measure of self-control added to that equation to halt the creation of more debt; it is detrimental to the mind and body, not to specifically set aside some of your time and your energy (both physical and monetary) to giving yourself space to recharge.

If you are carrying a lot of debt, I would recommend keeping your vacation to 5% of your Net Salary where possible and doing short weekend getaways or day trips.

If you are not carrying any debt then you can fund your vacation category at 10-15% as a good starting average.

If however travel is an extremely important part of your life, you may raise this percentage much higher to allow for more frequent trips. On the other hand if you are quite happy with short day trips or spending family time camping, you may be able to reduce this percentage.

When I apply the 10-15% rule to my net salary, it works out to between 2600 and 4044. This is more than enough money to both take a staycation or two and a modest trip overseas to visit family or close friends. If I want to do a trip to Paris however, it would require saving a bit more on top of this, or making it my only trip that year.

For some their work involves a lot of travel and so they seldom find that relaxing. Simply unwinding at home is an invaluable experience for them.

I have often heard the adage if you need a vacation form your work, you're in the wrong field. While this has some merit, even when I am doing work that I love, I need time away from it to honour the natural ebb and flow of my motivation and creativity.

If you are self-employed you often work harder for yourself than most wage-earners, and so I dare say that setting up a period of downtime for yourself is crucial to maintaining a high level of overall mental health. Set up you vacation well in advance, taking into account any tasks you need to delegate in order to make sure that your business does not suffer from your absence. You may need to save more for vacation as you may not be earning your full wage while you are on the break, and it is important to factor in any loss of revenue into your plans.

This need to account for the loss of revenue is also necessary if  you do not have a paid vacation and will need to cover your expenses as well as foot the bill for whatever trip you have planned.

In all scenarios careful planning can assist you in having a fabulous trip within the budget that you have set out.

When making  vacation budget it may be helpful to look back on your past trips and break down the various costs under headings such as airfare, accommodation, food, activities and general spending. Once you have these figures this will allow you to produce a reasonable savings goal for your next trip.

Whatever you decide will be your next getaway, start planning today and you will be able to reap the benefits without any financial fallout.

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