5 Steps to Arrive at Your Total Travel Spending Plan

It’s the time of year for holiday vacations. Whether you are going home, leaving home, or staying home for a few days, the question might arise, “How much should I be spending on travel, anyway?” When considering limited resources and a world of choices, I turn to money and happiness studies. They show that, first of all, travel and trips are a wiser way to create “remembered happiness” than buying things. Another important finding is that length of travel doesn’t matter as much: an eight-day trip to Hawaii is likely to bring about the same fond memories as a 14-day trip. And if the choice is between Hawaii and someplace more exotic like Fiji, the difference in remembered happiness between those two might only be incremental, particularly if there is no sentimental attachment to one or the other

While there is no hard-and-fast rule for how much we “should” spend on travel, I designed the following steps to help plan for the most memorable travel bang for your buck.

1. Make a list of your desired destinations. Rank them in some manner other than financial. If you need help, try imagining you have 360 days to spend in each place – how would you allocate the days?

2. Make a list of any specific reasons for traveling to each destination. For example, “visiting family” can only be accomplished by traveling home. “Diving the Great Barrier Reef” can only be accomplished in Australia. If there are activities you enjoy that can be done many places, make note of that.

3. For each destination, name some possibilities of who you would like to travel with, bearing in mind that one of the greatest determinants of our happiness is who we spend time with. (Conversely, it can be one of the greatest determinants of our unhappiness, too.) Consider how well your schedules and personalities mesh. Do you prefer meeting new people in tour groups? Traveling with your spouse or partner only? Children and/or grandchildren? Or a small group of friends? These answers might depend on the destination, so make a note of that, too.

4. If applicable to you, make a list of your desired modes of transportation. For some people, the experience of the journey – on a Harley, bicycle, boat, train, or RV, to name a few – is the source of the fun more so than the destinations themselves.

5. Combine the above four items into complete trips – Destination, Reason, People, and Mode of Transportation. Now re-rank them according to which ones you believe will provide the most “remembered happiness.”

Now you have a travel plan, and we haven’t even talked about money. If your top trip is one that you have been dreaming about for a long time, but has seemed financially out of reach, consider whether you can achieve the same thing by altering other aspects that aren’t as important, such as the mode of transport, the people, the reason, or the destination. Is there a way you can go sooner rather than later? The final finding I’ll share from happiness studies support this – our regrets later in life don’t come as much from what we have done, but from what we did not do. Take your #1 trip and make that your first travel priority, then work down the list from there. For more help on spending plans that produce maximum happiness, see Chapter 4 of The Mindful Money Mentality. Happy Traveling!

(Adapted from The Mindful Money Mentality: How to Find Balance in Your Financial Future, pp. 64-66).

Holly Donaldson

Holly P. Donaldson, CFP® writes and consults on the psychology of money. Her fee-only, product-free financial planning practice focuses on increasing financial self-efficacy for those seeking a financial navigator to help them make good decisions. She is the author of The Mindful Money Mentality: How to Find Balance in Your Financial Future (Porchview Publishing, 2013) and publisher of the award-winning monthly e-letter, "The View From the Porch." With a fully virtual practice in Seminole, Florida, she primarily serves clients located in the Tampa, St. Petersburg, and Clearwater areas. Holly will also work with clients who are a good fit located elsewhere in the United States.

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