If you weren’t already planning on going somewhere, don’t buy a ticket or vacation package just because it’s a great deal.Shop budget airlines through websites like and be flexible with your dates for the best deals.Here are some more tips for making your money go further while you travel: If you have a separate account just for travel, then you always know how much you can afford to spend- whatever is in the account. After a year, you will have $4,200 set aside for whatever trip you have your heart set on. Set up an automatic transfer from your checking account to a unique savings account just for travel. How much do you want to spend on travel in a year? If it’s $4,200, divide that by 12 to get $350 a month. When you plan ahead, you can save toward your vacation and pay cash. Once you pay the interest on your purchase, the fare isn’t such a good deal after all. (5) If you eagerly pull out your credit card every time there is a fare sale, you will end up in debt and with regrets. Over half of Americans (55%) fail to include travel in their annual budget even though they do it regularly. Once you’re funding your long-term goals, you can start planning your vacations. I usually recommend that my clients save at least 15% of their income toward retirement in order to provide for a secure future. As we saw above, a two-week vacation at age 30 could be worth over $50,000 at age 65. Make sure you’re setting enough aside for retirement and other big goals, like purchasing a house or funding a college education. First, you need to make sure that your current wanderlust isn’t bankrupting your future. You can be financially responsible and still travel. And spending all your money on travel instead of planning for the future costs a whole lot more down the road. Not planning ahead and paying for travel with debt is even more expensive. How many international trips would they be able to take with that money then? What if that money had been invested for retirement? If invested in the stock market earning 8% interest, that one vacation would be worth $56,553 at age 65. In the end, the trip costs $2,150 in cash and $1,675 in credit card payments ($575 in interest) for a grand total of $3,825. They put $1,100 on a credit card at 16% interest and pay the minimum $25 monthly payment. Let’s say a 30-year-old goes on the average 12-night international trip that costs $3,250. That’s because there is an opportunity cost involved. (4) Whether you think that sounds like a little or a lot, that vacation is actually costing them much more than it appears. The LearnVest survey found that 74% of Americans have gone into debt to pay for a vacation, with the debt averaging $1,108. The cost of travel probably should stop some of us, though. (3) Travel definitely isn’t cheap, but that doesn’t seem to be stopping many people from doing it. About 44% of travel funds are spent on getting to, from, and around your vacation destination. The major expense associated with travel and vacations is transportation. The average domestic trip costs about $144 per day while international trips come to about $271 per day. (1) It isn’t any wonder since the Consumer Expenditure Survey found that those nearing retirement spent four times as much on travel as young people under 25. AARP Research found that last year, Baby Boomers were planning on taking a total of four to five trips for a total cost of about $6,400. In fact, a quarter of people spend 15% or more of their income on travel. The average American spends about 10% of their income on travel, according to the 2017 LearnVest Money Habits and Confessions Survey.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |