A couple I have known for several years now find that the sweet spot for their annual holidaying budget is $30,000.
They often joke about people’s reactions when they find out: “OUTRAGEOUS!” … “HOW MUCH?” … “THAT’S SUCH A WASTE!” … “#%(#%(#%!” …
However, to them it’s normal; “We think it’s outrageous that people get distracted by things that aren’t REALLY important to them”.
My friends both work long hours; however, they are at an age (41 and 44) where hitting the town on a Friday or Saturday night to unwind is not there thing; “It used to be, but now we lead a fairly healthy lifestyle: Instead of late nights, our weekends are filled with early mornings, and contrary to our peers, we are quite modest with our spending in other areas too”.
It’s not just about holidays, it’s about priorities…
They haven’t found it easy though: “There is this expectation when you are earning ‘good money’ to have nice things, to drive nice cars and dine at the right places, and we feel that pressure”.
Recently, they looked at upgrading one of their cars to a Toyota Prado: “It was about $75,000 for the model we wanted, but $275 a week in repayments just didn’t sit right with us. We couldn’t bring ourselves to do it”.
When it comes to going out, they are also realising significant savings: “We would easily spend $300 a week in the past. Dinner would cost us $50 – 80 each and entertainment would be anywhere from $45 – $150 each as we live in Brisbane. However, we haven’t cut out the fun altogether we still enjoy a night out here and there, but it’s just not a priority for us anymore”.
“Besides, having money budgeted for holidays means that we enjoy more weekends away as well as extensive overseas travel”.
Stress-free spending means saving…
My friends have a healthy household income, and they also invest quite a bit into Superannuation and investments in their personal names (including shares and property).
Also, in the last few years, they have saved more than almost any of my other friends, but they have also spent more on holidays than anybody I know: “if we were going to spend lavishly and without regret, it is important for us to know we are moving forward financially”.
Although $30,000 is outrageous to some, context must be taken into consideration
For example, look at their spending by percentage: For easy calculations, assuming their combined household income is $300,000/year, their holiday budget would sit at roughly 10% of their income.
For many couples who earn a combined income of $160,000/year, you can be certain they’re spending more than $16,000/year ($308/week) on dining out and car repayments, and that means they probably have to scrimp on holidays to make up the difference.
My friends have a plan, and they have decided to spend their money their way.
“We realised we had a choice; to live up to the expectations of others, or to set our own, and when it comes to holidays, that’s exactly what we did!”