Everyone has different reasons to save money each year.
Many of us do it to achieve financial independence and/or retire comfortably. As some of you may already know, I'm trying to buy myself and my family as many Freedom Years as possible.
Although I passionately believe in reaching financial independence, I also recognize that life can end at any moment. This is why it's equally important to balance some of that saving with prudent spending on the things in life that make you happy. The key is to find that right balance, where your spending is not cannibalizing your freedom years while making precious memories along the way.
Traveling is our Happy Place
Our biggest extravagance in any given year generally involves traveling. We use up most of our available vacation time to travel. We also now spend about 40% of our budget on travel. We love going for the same reasons most people do:
- Getting to explore new places
- Meeting new people
- Experiencing different cultures
- Expanding our food palate
- Relaxing and breaking the routine
Since my wife and I met 20 years ago, we've resolved to travel someplace together at least once a year. It's one of the things we have in common, and one of the things we plan on incorporating into our daughter's life.
Most of our vacations over those years have been for one week at a time, with at most two vacations per year. Every five years we used to take a “big vacation” and spend two weeks back-to-back traveling. Work and the lack of available vacation time were the primary constraints behind spending more time away. Of course, the cost of such trips was also a limitation.
More recently, we've changed our approach to travel, and now take 7-10 weeks to satisfy our adventure itch.
The one-week trips have roughly cost us about $500 per day for everything ( 2 Adults). Since our normal spend rate in a given year is approximately $100 per day, those trips come out to over 4-5X our regular daily rate. Below is a summary of a few of our bigger trips.
Two weeks in Europe for $6,400
The first extended travel vacation we took was in 2007 to celebrate our fifth anniversary. We spent 15 nights in Europe visiting five cities/regions in 3 countries (France/Italy/Greece). It was a fantastic experience that confirmed our love for travel, especially in that beautiful region of the world.
We budgeted ~$6,400 all-in for the trip at the time. We planned it all out ourselves, avoiding any tours in the process. You can see a detailed breakdown of our budget below.
Our general Itinerary was:
- 2 Nights in Paris, France
- 3 Nights in Florence, Italy
- 1 Night in Tuscany, Italy
- 3 Nights in Rome Italy
- 6 Nights in Santorini, Greece
Our most considerable expense for the trip was lodging, and we ended up spending about as much as our budget. The total cost for the trip came in at roughly $425 per day for the 15 days. We used some vouchers we had for the plane trip, so in reality, the trip cost is a bit under-represented.
This trip was quite an extravagance, coming in at a factor of almost 4X our average daily rate.
It was worth it though because we got to experience some amazing things, check out some pics at the end of the post.
2 Weeks in Spain for $6,400
The next extended vacation we took was in 2012 to celebrate our tenth anniversary. We spent 12 nights in Spain visiting six cities in the Andalucia region. It was another fantastic trip which revolved primarily around food.
We again budgeted ~$6,400 all-in for the trip and planned it all out ourselves. You can see a detailed breakdown of that particular budget below.
Our general Itinerary was:
- 3 Nights in Sevilla, Spain
- 1 Night in Cordoba, Spain
- 2 Nights in Granada, Spain
- 2 Nights in Malaga, Spain
- 2 Nights in Ronda, Spain
- 2 Nights in Jerez, Spain
Our most significant expense for that trip was transportation, and we ended up spending about as much as our budget. The total cost for the trip came in at roughly $530 per day for the 12 days.
This trip was even more extravagant than the previous one, coming in at a factor of almost 5X our regular daily rate.
It was worth it though because we got to eat some of the best food we've ever had in a gorgeous region, check out some pics at the bottom.
2 Months in Barcelona for $15,000
In 2017 we decided to take our travel to a whole other level. We embarked on our first slow travel experience, and it put all other past trips to shame. We spent two months in Barcelona, Spain while taking a couple of week-long side trips in the region.
In all fairness, it wasn't quite a full-time vacation. I was able to work remotely in Barcelona, Spain during the majority of that time, but still managed to take at least four weeks of actual vacation time. Of course, each weekend felt like a mini-vacation as well. Mrs. Max was able to take a two-month leave of absence from her job, and little Max joined us for her first big adventure.
If I used past trips as a guide for our budget, theoretically this trip should have cost close to $30,000 ($500 x 60 Days). Ouch! There's no way I could have justified that kind of spending!
Thankfully, the longer you spend at a destination, the lower your daily rate. It also helps that we were able to do a short term rental at an apartment during our stay and that the EUR/USD exchange rate was reasonably favorable (a 30% improvement relative to our first European trip). We used TripAdvisor to get a fantastic deal and to research all the destination details.
Below is approximately what we ended up spending on this trip.
Our general itinerary was as follows:
- 61 Nights in Barcelona, Spain / This was our home base during the trip
- 3 Nights in Modena, Italy / Side Trip
- 2 Nights in Cinque Terres, Italy / Side Trip
- 2 Nights in Bologna, Italy / Side Trip
- 5 Nights in Provence, France / Side Trip
Since we saved a ton of money on flights, our most significant expense for this trip was lodging, followed by food. Thankfully, we were able to do some home cooking and grocery shopping, which saved us some money on food expenses. We still managed to have some fantastic dinners, although our attempt at a $600 dinner extravaganza bombed!
The total cost for the trip came in at roughly $245 per day for the 60 days.
Although this was the highest we have ever paid for a vacation in a given year, it comes in at a low 2.5X our average daily rate. A comparative bargain relative to past trips!
The other great thing about this trip and future ones are that they won't impact our expense budget of ~$50,000 for the year. We used our mortgage “savings” to fund them. Crushing the student loan curse early in our journey also helped quite a bit.
1 Month in Southeast Asia for $14,000
Although we would have loved to experience another slow travel vacation this summer, other travel commitments forced us to change our plans for the year.
We had to split our vacation time across three planned events. One week was spent celebrating Mrs. Max's 40 year birthday in central Mexico at Guanajuato and San Miguel de Allende. Both beautiful cities to visit! Another week is planned for later this year for my brother's wedding.
This meant we had to compress our summer trip down to about five weeks compared to last year. First world problem, I know!
As a result, we decided to forego a slow travel experience and go with a more spirited option.
We'll be spending around 35 days in Southeast Asia. We're planning on visiting seven cities, and three countries during that time:
- 9 Nights in Singapore, Singapore
- 3 Nights in Bangkok, Thailand
- 4 Nights in Chiang Mai, Thailand
- 7 Nights in Koh Samui, Thailand
- 4 Nights in Ubud, Bali – Indonesia
- 4 Nights in Seminyak, Bali – Indonesia
- 4 Nights in Nusa Dua, Bali – Indonesia
I'm hoping to take three full weeks of vacation, with the remaining time working remotely.
The total budget for the trip is $14,000. Here's the breakdown:
That works out to $400 per day, which is quite a bit higher than our slow travel experience.
This is a splurge trip. We're paying twice as much as we usually would on lodging, primarily since we're staying in hotels throughout the stay. Many of which are pretty nice. Transportation is also costing us quite a bit to get to/from different locations.
We could have spent the entire time in one city, but since this was our first trip to Asia as a family, we wanted to get the most out of that time. As a result, our schedule is quite hectic. However we have several beach days planned, so we're hoping it will also be relaxing.
We almost tripled our standard vacation budget, starting in 2017. With the budget now set at $20,000 per year, we'll have plenty of options each year on the type of adventure we decide to embark on.
It took us five years to get prepared for this type of budget scenario, and even longer to get financially fit to pull it off. We intend on creating these kinds of experiences over the next few summers, with different destinations. This goal is what prompted us to pay down our mortgage aggressively. That enables us to maintain the same level of expenses and savings while still achieving our dream of traveling abroad in the summers.
We had initially wanted to live abroad full time, but Slow Travel seemed to be the best compromise for our family. We can take advantage of the two month summer period when little Max is out of school, while still maintaining a strong connection with work and family during the rest of the year.
These kinds of trips take quite a bit of logistics and planning to pull off, but they've been more than worth the effort. Regardless of what happens at work, or what the future may hold, the memories and experiences we get to share as a family will always be our own.
In my opinion, there's nothing better money can buy!
Here's some pictures of past trips, check out my Instagram account if you want to see more recent ones:
Readers, would you spend $15,000 on vacation? What is your average yearly budget for travel? Ever calculated your daily spend on vacation compared to healthy life? Share your thoughts and comments below (no such thing as a late comment)! – Max