Should I spend 5k annually on travel?

Questions on how we spend our money and our time - consumer goods and services, home and vehicle, leisure and recreational activities
Nearly A Moose
Posts: 1024
Joined: Fri Apr 22, 2016 5:28 pm

Re: Should I spend 5k annually on travel?

Post by Nearly A Moose » Fri Jul 22, 2016 2:34 pm

Yes. I spend more, and my regret is not doing even more, especially before young children. (Not more at the expense of long term savings, but I could have swapped out a few suits and pairs of shoes for a last minute flight to Europe a bit more.)
Pardon typos, I'm probably using my fat thumbs on a tiny phone.

straws46
Posts: 216
Joined: Fri Jul 03, 2015 11:12 am

Re: Should I spend 5k annually on travel?

Post by straws46 » Fri Jul 22, 2016 2:39 pm

Never went overseas until my 65th birthday. Now retired we are making up for lost time averaging ten weeks seeing the world each year. But I don't think we will ever see the pyramids and now Istanbul may be out for safety concerns. See places while you can.

User avatar
Petrocelli
Posts: 2784
Joined: Mon Feb 19, 2007 6:29 pm
Location: Fenway Park, between 2nd and 3rd base

Re: Should I spend 5k annually on travel?

Post by Petrocelli » Fri Jul 22, 2016 2:57 pm

Yes. You should travel.
Petrocelli (not the real Rico, but just a fan)

Scotttheking
Posts: 232
Joined: Wed Apr 09, 2008 7:58 pm

Re: Should I spend 5k annually on travel?

Post by Scotttheking » Fri Jul 22, 2016 3:20 pm

Absolutely.

halfnine
Posts: 996
Joined: Tue Dec 21, 2010 1:48 pm

Re: Should I spend 5k annually on travel?

Post by halfnine » Fri Jul 22, 2016 3:25 pm

Kayyy123 wrote: We are living in a 2 bedroom apartment in San Jose shared with a friend to save some money, but we will not be able to do it once we have kid.
Our plan is to buy a house around East and South Bay within 2 years. Budget will be between $600k to $700k, so 20% of down payment will be around $120k to $140k.
My fear is that we may not be able to afford mortgage payment and daycare expense at the same time when a kid pop up.
We are renting a 800 sq ft two bedroom apartment with 2 preschoolers. Life moves on. Just because you have a kid doesn't mean you need to live in a home. It doesn't mean you need to own a home, either. Of course, where we live it's also fairly common for families to live in small places which does make it a bit easier.

invst65
Posts: 644
Joined: Thu Nov 27, 2014 11:04 am

Re: Should I spend 5k annually on travel?

Post by invst65 » Fri Jul 22, 2016 3:52 pm

5k for a summer vacation and another 1k for a winter vacation have been standard parts of my yearly budget for a long time.

My wife and I make almost exactly the same as you do and I'm 67 (she's 50). If a couple making 168k/year can't treat themselves to a yearly 5k vacation then what is the point in making all that money?

petiejoe
Posts: 46
Joined: Wed Feb 13, 2013 8:18 pm

Re: Should I spend 5k annually on travel?

Post by petiejoe » Fri Jul 22, 2016 4:25 pm

my $.02 is decide for yourself how much money you should spend on travel, build that into your budget, and allow yourself to spend it. I'm pretty formal with my budgeting using mint.com, but you don't even have to be that strict. I struggle with the last step (allowing myself to spend the travel money), but my wife is pretty good at keeping me honest there. I budget to allow myself to spend money, not just to prevent myself from spending money.

carolinaman
Posts: 3936
Joined: Wed Dec 28, 2011 9:56 am
Location: North Carolina

Re: Should I spend 5k annually on travel?

Post by carolinaman » Sat Jul 23, 2016 7:59 am

Kayyy123 wrote:Thank you all for your advises and opinion.

Regarding the $1.6k monthly donation to church, we are donating 10% before tax income with after tax money.
It is an optional thing and our church doesn't require us to do it.
Even though it is a big amount for us and it hurts every month when I send the check, it is our commitment to God and a way to give back to our church community.
Good for you! I like your priorities.

michaeljc70
Posts: 6005
Joined: Thu Oct 15, 2015 3:53 pm

Re: Should I spend 5k annually on travel?

Post by michaeljc70 » Sat Jul 23, 2016 9:39 am

Absolutely. It is only around 3% of your income.

Traveler
Posts: 813
Joined: Fri Aug 30, 2013 9:07 pm

Re: Should I spend 5k annually on travel?

Post by Traveler » Sun Jul 24, 2016 9:36 am

Absolutely! Travel is the largest line item of my spending budget, making up about 20% of it. I'm single and try to do 2-3 int'l trips each year. This year I did Iceland and will do Greece and the Dominican Republic later in the year. I love it.

WhiteMaxima
Posts: 2081
Joined: Thu May 19, 2016 5:04 pm

Re: Should I spend 5k annually on travel?

Post by WhiteMaxima » Wed Aug 02, 2017 3:55 pm

Not only You should, you must.
Last edited by WhiteMaxima on Wed Aug 02, 2017 4:38 pm, edited 1 time in total.

Jags4186
Posts: 4070
Joined: Wed Jun 18, 2014 7:12 pm

Re: Should I spend 5k annually on travel?

Post by Jags4186 » Wed Aug 02, 2017 4:05 pm

We spend $5k a year making about what you make on travel. Absolutely worth every penny. We rent, have low expenses, and no children yet.

I suspect the type of travel and the expense of travel will greatly change once we buy a house and have children. We're going to Europe in about a month...I figure we have one more trip after that in us before the real adulting starts to happen.

lightheir
Posts: 2415
Joined: Mon Oct 03, 2011 11:43 pm

Re: Should I spend 5k annually on travel?

Post by lightheir » Wed Aug 02, 2017 4:07 pm

Do it NOW. I'm myself not a big fan of travel (I have other interests I like spending my money on!) but I guarantee that travel gets a lot more difficult with young kids - even if your parents can watch your kids while you do a getaway with your spouse, you'll likely feel guilt at leaving them. So do it now - it's gonna be a long time before you get a similar guilt-free chance once your kids arrive!

User avatar
ladders11
Posts: 845
Joined: Fri Nov 14, 2008 4:20 pm

Re: Should I spend 5k annually on travel?

Post by ladders11 » Wed Aug 02, 2017 4:25 pm

I also agree with the $5k annual travel expenditure. If you didn't want to spend $5k, you could take a trip closer to home. I would expect that travel is healthy for your marital relationship and life satisfaction, and an annual trip can be critical maintenance that you don't want to risk foregoing.

However, I'm also unsure about your savings goal, wouldn't it take 10 years to reach $50k plus interest? That isn't going to accomplish much in the Bay area home market. Starter homes seem to run $500k in today's dollars.

If you do have kids, and think they will need a certain number of additional bedrooms, a particular school district or some expansive backyard pasture to graze, there is no time like the present to reach an agreement about a home purchase budget and establish what down payment will be needed. If these aren't priorities, no problem.

JBTX
Posts: 5708
Joined: Wed Jul 26, 2017 12:46 pm

Re: Should I spend 5k annually on travel?

Post by JBTX » Wed Aug 02, 2017 4:37 pm

Yes travel. My only significant regrets is not traveling abroad more. When you are married with kids it is much harder.

Of the trips I have made both domestic and abroad i don't regret one penny spent.

sco
Posts: 922
Joined: Thu Sep 24, 2015 2:28 pm

Re: Should I spend 5k annually on travel?

Post by sco » Wed Aug 02, 2017 11:53 pm

Turn the heat down in the winter if you have too, and then travel 1 or two weeks during the worst of it :)


Seriously, I can't think of a trip that we have regretted.. Obviously some were better than others, but no regrets..

User avatar
wander
Posts: 2820
Joined: Sat Oct 04, 2008 9:10 am

Re: Should I spend 5k annually on travel?

Post by wander » Thu Aug 03, 2017 4:10 am

Enjoy it when you still can. Yes, go for it.

afan
Posts: 4461
Joined: Sun Jul 25, 2010 4:01 pm

Re: Should I spend 5k annually on travel?

Post by afan » Thu Aug 03, 2017 5:05 am

NO.

Far too expensive.
Get your priorities in order. Although maxing out tax favored retirement programs is an important part of a financial plan, that does not mean it is all you need to save for retirement. You should be putting away more money in your taxable savings each year than you put in your maxed out retirement plans. You should be putting away education money for your planned kids. You should be saving for a home.

We are in a far stronger financial position than you are and spend nowhere close to as much on travel as you are contemplating.

Sit down and work out a lifetime financial plan. Put in retirement needs, costs of raising and educating kids, buying a house and risks of early death or disability of either or both of you. See how much you need to save after making provisions for these needs. I think the answer will become obvious.

You need to save much more money.
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama

User avatar
bottlecap
Posts: 6245
Joined: Tue Mar 06, 2007 11:21 pm
Location: Tennessee

Re: Should I spend 5k annually on travel?

Post by bottlecap » Thu Aug 03, 2017 6:30 am

If you're maxing the retirement accounts, no one can fault you for it.

$5,000 isn't going to move the needle on a home in the Bay Area anyway.

Have fun,

JT

selters
Posts: 658
Joined: Thu Feb 27, 2014 9:26 am

Re: Should I spend 5k annually on travel?

Post by selters » Thu Aug 03, 2017 7:09 am

Why do people run calculations on what a $20,000 car at age 25-30 costs you in lost stock market returns, but not what $4000 a year on travel for five years at age 25-30 costs in lost stock market returns?

sco
Posts: 922
Joined: Thu Sep 24, 2015 2:28 pm

Re: Should I spend 5k annually on travel?

Post by sco » Thu Aug 03, 2017 10:54 am

selters wrote:Why do people run calculations on what a $20,000 car at age 25-30 costs you in lost stock market returns, but not what $4000 a year on travel for five years at age 25-30 costs in lost stock market returns?
Because they enjoy the travel, and see the car as a unfortunate necessity?

bowest
Posts: 158
Joined: Fri Feb 18, 2011 1:19 pm
Location: New York

Re: Should I spend 5k annually on travel?

Post by bowest » Thu Aug 03, 2017 10:59 am

Yes! Travel widely while you can and are able if you have the resources.

I've never had second thoughts or regrets about travel spending (unlike material goods purchases).

User avatar
ResearchMed
Posts: 9434
Joined: Fri Dec 26, 2008 11:25 pm

Re: Should I spend 5k annually on travel?

Post by ResearchMed » Thu Aug 03, 2017 11:02 am

sco wrote:
selters wrote:Why do people run calculations on what a $20,000 car at age 25-30 costs you in lost stock market returns, but not what $4000 a year on travel for five years at age 25-30 costs in lost stock market returns?
Because they enjoy the travel, and see the car as a unfortunate necessity?
Also because of the recently discussed "experiences" add more to happiness than more/fancier "things".

The memories from trips... they last a lifetime.
And... it's true that one may not be able to travel "anywhere", as one gets older.

We are among those who "waited too long" to get started on the major dream travel.
There are a few destinations that we probably now can never see, but fortunately still many that we have recently enjoyed and have plans to see "soon" (not "sometime in the future, whenever....").

If $5k/year is "too much", then take a trip like that every other year. Or even every third year.
And try to do those that require the most activity/physical fitness sooner, rather than later.
If these are the pricier ones, then again, do one every couple of years.

Be prudent, but don't postpone everything special... There are no guarantees...

RM
This signature is a placebo. You are in the control group.

H-Town
Posts: 2226
Joined: Sun Feb 26, 2017 2:08 pm

Re: Should I spend 5k annually on travel?

Post by H-Town » Thu Aug 03, 2017 11:12 am

Kayyy123 wrote:Hello Bogleheads,

Can you give us some opinion on rather we should spend $5k annually on traveling?
We planned to travel to a new country or a new city every year since 3 years ago when we got married.
We had visited Germany, Czech, Japan, Mexico, China, Maldives, Dubai (UAE)
We plan have kid soon so we are enjoying our freedom before a kid pop up.
Half of the trips were only 2 of us and in other half we brought our parents with us.
Our parents are getting close to 70 and have some joint problems. There are still some places that they want to visit and we want to take them out before they cannot travel anymore.

We are living in Bay Area where the housing price is relatively high comparing with other cities.
We have been thinking if we should save the $5k toward the down payment of a house lately.
Anything feedback is appreciated.
YES!!! Just do it while you have time before a kid comes.

My annual traveling budget has been 10-15k annually. In the future when we have a child, we'll shift this budget to child care expense.

mwnivek
Posts: 6
Joined: Thu May 03, 2012 12:55 am

Re: Should I spend 5k annually on travel?

Post by mwnivek » Thu Aug 03, 2017 11:22 am

FYI this thread is over a year old, but was revived (accidentally?) by WhiteMaxima. The OP has not been active in a year, so is unlikely to see new responses, although others may be interested in this general discussion.

Post Reply