How Much Should I spend on Travel?

Chicago skyline

Travel can be anything you want it to be.  From a staycation, a day trip, to an overnight, to full immersion there is not one best choice.  Travel can be very expensive, but it can also be a bargain depending on how you structure it.  There are so many benefits to traveling that it is worth building a budget and stretching the value of it as far as possible.

Different types of travel starting with the most Affordable

  1. Day Trips – You have to determine your driving stamina, but in general you should keep this to 1.5 hours a direction, under 1 hour if possible.
  2. Home exchange – This can save a ton of money, but there are risks allowing people you do not know to live in your home.  I am sure they are similar to the risk many people face running an airbnb.
  3. Camping – There are some incredible campsites at state parks and other organizations.  There is a special feeling being disconnected from society.  This is also very affordable.  You can simply pitch a tent, sleep in the back of a pickup / SUV, or an RV.  The site fees are pretty similar, but the purchase price of and RV and poor gas mileage makes it one of the costlier choices.
  4. Hotels – If you search specials on hotwire / priceline, or go off season you can stay at some very comfortable hotels for a reasonable amount of money.  Thanks to tripadvisor you can get a good idea of just what you are booking to limit surprises.
  5. 2nd home – Generally the least economically feasible nor prudent choice.

The cheaper the acceptable accommodations are to you, the longer you will be able to travel for and the more you can see.

How to justify the cost of Travel

I think it is first important to distinguish between traveling and vacationing.  I see traveling as an adventure where you will learn something new, and maybe are outside your comfort zone.  Vacation’s usually involve going to a plush resort with minimal physical activity.  I don’t want to knock vacations as they can be very satisfying and beneficial as well. 

It is hard to determine what a responsible amount of money to put towards traveling is.  Is it an arbitrary number such as $1,000 a year, or a percentage of income say 5%?  I don’t think there is a one size fits all.  Just as setting up a monthly budget including housing, utilities, food, and transportation you have to make trade offs.  You make these trade offs based on what is important to you.  Just because there are metrics spouted by experts such as housing should not exceed 35% of your income, you are free to spend much less, or more if it is extra important to you.

We can extrapolate further if we use the 35% figure.  For instance say you wish you could spend 10% of your income traveling but do not believe it is responsible. If you were currently spending 35% of your income renting a 2 bedroom apartment, but could be as or close to as happy in a one bedroom apartment spending 25% of your income.  With the 10% savings in housing costs you can now travel.  It is very possible that the satisfaction and growth you get out of traveling on that 10% would outweigh the added value of that second bedroom.

Common false alternatives to justify travel Cost

Vacation Homes

The idea of owning a vacation home tends to appeal strongly with some people.  There are many benefits to this such as being able to leave all your stuff there between visits, know who was sleeping in the bed before you, and pride of ownership.  If it is a place you really enjoy visiting and want to spend a lot of time there you can get great value.  Some of the concerns are that you will have to do a lot of extra work such as cleaning, which we take for granted when staying at a hotel.  Further, the home needs to be maintained and a lot of vacation time will end being spent working on the house.  You also will have to pay double utilities.  Now people will justify the negatives by planning to rent the home out when they are not there, but by doing that they are losing out on the original two benefits.

Another concern is that someone might purchase a vacation home for the false feeling that they are still on vacation even when they are not there.  I think it is easy to buy a vacation home thinking you will go there every weekend and other extended stays when possible.  A cabin in the mountains or by the lake may make you feel like you are more connected to nature when you are living in a big city.  It may be a false sense that one can purchase the feeling of nature similar to how many feel good about buying exercise equipment.  Yet the equipment won’t make you fit just by having it, and the vacation home won’t make you feel like you’re on vacation when you are not there.

Despite the cons for some this can still be something they greatly enjoy and may actually be money well spent.  I just want to caution that the time and money put into it is an opportunity cost.  The same money could be put into stocks and bonds, and the time put into maintaining the house could be put into side venture work to earn more money.  The investment return on this money could easily pay for hotel stays in any place you want to go in the world.  I believe there is less risk in this approach and more variety available.  Yet again I understand wanting to own the vacation home as mentioned earlier for the emotional happiness that may bring.  This is not much different from people who buy a corvette and drive around in car clubs.  If this is an activity that you really enjoy, then it is not purely a financial decision.  It is absolutely fine to spend your money how you like and if the vacation home makes you happy it is money well spent.  I just don’t want people to fool themselves thinking that it is a wonderful investment as well. It can be a fine investment, but only if you forgo the use.

I brought up the distinction of traveling vs vacationing earlier.  If you are not interested in traveling and prefer to vacation that is absolutely okay and I can see how purchasing the vacation home can fulfill your desires.  However, if you do wish to be a traveler I think a 2nd home would actually be an extra obstacle in your way as you will have less time to go anywhere else if you want to justify having the additional home.


It is common knowledge to most that timeshares are a terrible investment.  There are rare occasions when a timeshare may appreciate with the general real estate market, but these are generally very high end properties in extremely desirable areas.  The main problem with a timeshare is that you are locked into a specific week of use each year.  This can actually make a vacation more stressful, or even worse missing out on something else, since you can’t bear to miss the week you already paid for.  Now I know there are point systems and exchanges, but generally there is an extra cleaning fee or service charge assessed.  Many people do not think of these extra fees.  The major problem is that you have to pay maintenance fees every year and they generally go up every year, while the property tends to decline in condition.

There are many brand new timeshares that look incredible and seem to be a fair price for the amenities you get compared to a hotel. but you cannot only compare the yearly dues.  The upfront purchase of desirable timeshare can be quite high.  The problem is that as the property declines in condition, so generally does the market value of the timeshare ownership.  Some people end up paying to get rid of the timeshare in the end.  This is because the fees become very high and the owners are either not able nor want to visit it anymore.

Interestingly there are situations where you can rent the timeshare for less than the owners pay in dues, and who have made an upfront initial payment.  From here we can see there should always be plenty of supply of timeshare rentals available to you if you desire.  I believe it is much better to rent a timeshare than own one, since as an owner what you really own is the obligation to continue to pay yearly dues.

If you still really want to buy a timeshare please do some research on the “resale marker.” You can often purchase timeshares for more than 50% off the prices offered at the clubs directly. How else can they afford to let people have free weekend stays, dinner, and golf included? If you look at some online auctions you can find many popular timeshares listed for sale at much better prices.

Does an investment in a vacation home or timeshare justify travel cost?

I believe many people buy the timeshare or vacation home with the justification that they can travel / vacation more for less money than hotels.  It is a very understandable line of thinking.  This was one I originally bought into myself.

Now if they are willing to rent out their home, or ignore their upfront timeshare purchase price this can be true.  However, as stated earlier I believe simply taking that same pot of money and investing in stocks and bonds will yield a better return that you can put towards travel. This will allow you to stay in comparable properties, while having the flexibility to go wherever and whenever you like.

Travel trips to consider for varying Budgets

Visiting the 50 States

It is amazing how much diversity there is within our own country.  Cities can be so different and similar at the same time.  There is so much natural beauty to admire whether it be oceans, lakes, mountains, great plains, or the desert.  The varying climates can only be experienced to understand.  Each place is unique in so many ways.  You can visit a few cities at a time, or do as many others have and drive across the entire country all at once.

The magic of National Parks

There is something special about seeing the land the way it was originally created uninterrupted by modern society.  I think the preservation of the National Parks is one of the greatest achievements of the US government and humankind.  Sometimes being there you feel small and insignificant, other times you feel larger than life, while all the mundane day to day worries in your life tend to seep away. 

Depending on where you live some of the parks are more accessible than others.  Those living in the western region have a lot to choose from.  Most of the National Park campsites are top notch, and while difficult to secure a reservation, if you can it is a wonderful trip at a reasonable price.

International Travel

International Travel gives a whole new dynamic to enrichment than anything you can do within your country.  Especially when visiting a country that English is not the primary language. It is a challenge when basic things you take for granted such as grocery shopping, going to dinner, riding the bus, and doing laundry are suddenly a big event.  However, there is great satisfaction in learning how to do these same things all over again in a foreign country.

It is also amazing just how similar some foreign countries are to the US.  In general people still have to hold down a job, pay their bills, and decide what they want to do for leisure.  This is actually the most amazing benefit of international travel in that we all have to accomplish more of less the same daily tasks, but we can see a variety of ways how they are done and the priorities and values people place on them.

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