Had a curious email come in asking about my vacation spending and if it was worth it.
Don’t forget that I am also not factoring in all of my LOST income, which if you assume I would work about 6-9 months in a year, it is approximately a gross salary of $120,000 – $180,000.
So really, it’s “spending $140,000 to $200,000” on a year-long vacation 😛
Many people might say: ‘Well DUH! Spending $20,000 on a vacation is always worth it if you have the money to spare‘, but I think there are many people who’d feel differently and would rather save the money for the future or for something else, perhaps their wedding, a new car, or a down payment on a home.
All awesome ways to spend money.
Written completely from my perspective, I need to give you a little background first for those readers who haven’t been following for a while:
- I’m in my late twenties
- I amassed a net worth of around ~$180,000 in 2011
- I worked January and February making about $40,000 total*
- …therefore $20,000 net is a little more than half of my gross earnings for the year**
- In 2011, I decided to take the rest of the year off to travel
- I’ve been 1.5 months to Asia, 2 months in Portugal and Spain, 2 months to France, England, Austria, Belgium & Sweden and 2 months around the U.S.
*Yes, I make a lot of money per month, but that’s gross not net and I don’t work the whole year as my contracts vary in length.
**Taxes haven’t been factored in the amount above. $20,000 in a gross salary is not $20,000 net. More like $15,000 net.
I AM DEBT-FREE
The very first thing I should mention is that I’m debt-free.
I don’t owe anyone anything. No mortgage, no bank loans, no credit card balances, and certainly no lines of credit.
By mid-2008, I already kicked $60,000 of student debt in the arse, clearing it in 18 months because I became obsessed with budgeting.
I SPEND WHERE IT COUNTS FOR MY LIFESTYLE
Where you spend your money is where your priorities lie, and watching my budget has really displayed that over the years.
Check out your top 3-5 spending budget categories in a year.
Mine are usually:
- Rent
- Food
- Donations
- Electronics
- Travel
So spending $20,000 on a vacation? No problem.
Why? Because for one thing, I owned a car that cost me $2000 (paid in cash), car fees around $200 a year and car insurance at $300 a year.
(I donated the car earlier in the summer of 2011.)
I didn’t spend a whole lot of money on a car because I don’t really drive it and I am not interested in showing off or being in the right kind of vehicle as long as I’m safe and it works.
For another, I don’t go crazy shopping or buying junk I don’t need any longer. I’ve learned how to tone it down, become more of a minimalist and save my money to spend on what I actually care about. This is all partly due to my project of cataloguing everything I own in my wardrobe on my iPod Touch for easy access when I am out, and to curb my spending.
Suddenly, even though my income has shot up since 2006 (I went from making $5000 gross a month to $20,000 a month when I work), my spending has actually decreased significantly (lifestyle DEflation) because of my careful budgeting and analysis.
With all of this extra cash, I’ve banked it and used it where I’ve seen fit — on vacations 😛
I NORMALLY SPEND $20,000 – $30,000 IN A YEAR
My regular living expenses range from $20,000 – $30,000 a year depending on where I travel and how long I travel for.
I really don’t need a ton of money to live on, but I am certainly well above the threshold of people who live in the extremes of frugality.
Since I’m taking the rest of the year off to travel and my vacation budget for that is about $20,000, I’d say it sounds just about right. I’m substituting paying for my living expenses with traveling the world on a budget instead.
I should note that in between my travels, I come back to Canada for 2-3 weeks to rest, unpack, unload gifts and re-pack for my next trip.
So when I travel, I’m in a hotel room or in a rented apartment (depending on how long I am in the country for) and I don’t pay any rent or utilities — it’s included in the hotel’s nightly rate.
Granted, it can range from $25 (rented apartment) to $125 a night, but the bottom line is I don’t need shelter.
I DON’T TAKE LUXURIOUS VACATIONS
A vacation to you might be sitting on a beach in a 5-star resort sipping martinis.
That is not my cup of tea. My vacation is more of the walk-for-12-hours-a-day, cook-in-the-hotel-room, take-a-billion-photos kind of style.
These vacations are exhausting! I need a mini vacation after these kinds of strenuous, intense trips, but they are not uber expensive.
For 1.5 months in Asia, I spent around $7807.38, which included gifts as well, but I don’t go on vacation to shop.
Most of my trips for a month or so operate on a budget of $5000 in total. If I go for a week to a city in the U.S. or Canada, it’s $1000. That’s the kind of budget I work with.
We don’t pay for tour guides, even in countries where we don’t know a single word of the language (*cough* China *cough*).
I HAVE MY WHOLE LIFE TO WORK
As for it being “worth it” when I am spending my prime working years lolling around and traveling, I know it sounds ludicrous NOT to make a ton of money now, save it all and travel when I am retired.
But really….I’m in my late twenties. I have another 20 – 30 years of work left in me, and I make a pretty good salary. Combined with decent gross income and fairly low general living expenses, I can work for two months to pay for a year.
I also don’t want to travel to finally see the world when I’m a senior. Who knows what kind of condition I might be in by then?
I see them on trips and they are not walking or doing as much as I can at the age I’m at. I think traveling intensely is perfect for the 20-to-30-something-year-old, and when you’re a senior, more relaxing and less strenuous vacations are in order.
When I’m a senior, I want to go back to the places I love, not see new countries, get lost and become extremely frustrated by not knowing the language or being in utter culture limbo.
IN CONCLUSION: HECK YEAH IT WAS WORTH IT
So in conclusion — yes dear reader, it was absolutely worth it. I have no regrets in spending that money on a “wasteful” year (my words, not his or hers) by not working and basically becoming a world traveler.
This is a once-in-a-lifetime thing, because once kids come along I can’t just up and go like I used to.
I’m being realistic about that, and I am also aware that not many people my age get the chance let alone the opportunity to do something like this.
Take your vacations…they are always worth it and a great way to rejuvenate!
I very much agree with your- I have my whole life to work.
Hell yes. If I could travel for a year on 20k (without having to work, much, while abroad), I’d do it. But it’s not really doable with the places I want to go. still working on the grand plan!
Hey, if you can afford to take a few months off and travel and you don’t have a mortgage or anything to tie you down, then I’d definitely say do it!
Yeah, I think it is worth it too. You might not be able to take these kind of vacation in the future so I think it was great that you were able to take the opportunity. 😉
I am genuinely interested what type of work/consultation you do to net 180,000/year in your twenties.
hear hear! haha I want a $20,000 vacation = someday… soon hopefully 😉
Of course it was worth it, and it’s great that you’re financially stable enough to be able to do that!
You’ve accomplished so much in conquering debt, now, of course, you deserve to conquer the world! Those amazing places are worth it! Certainly more as a traveler like you do, than a tourist.
You are the 1% 🙂
I completely agree with travelling when younger vs. older. Especially if there are no kids in the picture (like us). My partner and I want to see everything we can before retirement, and then settle in a city, probably Vancouver, where everything we need and want (health care, restaurants, whatever) is easily accessible.
Any travel is definitely worth it! I don’t think we’ve gone somewhere where we actually regretted going & spending $$.
AMEN SISTAH!!
Sounds worth it to me!