Dreaming of Travel Adventures? How to Make Sure Your Budget Keeps Pace

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Setting up and living by a budget ensures you have the opportunity to take advantage of all things fun in life. For me, that means travel. LearnVest’s guidelines say that all miscellaneous spending (in my book: leisure & fun) should account for only 8% of your budget. But, personal finance is ultimately that: personal. It’s okay to rearrange some of the wedges of your personal pie chart, as long as you never exceed your total income.

Use Me as an Example: Rearranging My Budget to Accommodate Travel

Although LV recommends spending 8% of your total income on fun miscellany, I actually spend approximately 12% of my budget on travel, alone. The year I went to Antarctica, travel took up nearly 25% of my total annual spending. The thing is, that’s okay.

Here’s why:

1. To Support Higher Expenses in One Area (Like Travel), Reduce in Others

If you’re a travel junkie, too, make sure to adjust other categories of your spending. For example, I’m not a big shopper—and I’m currently conducting a financial experiment to drastically reduce my rent costs. As the LearnVest financial planner in residence, I’m actually going to give you permission to spend money…but only if you reduce your spending in other areas, accordingly.

2. Assign a Dollar Amount to Your Travel Goals

Are you more about sipping mojitos on the private beach of a luxury resort, or about backpacking through Yosemite? Would you rather take multiple long-weekend trips or save up vacation days for a longer adventure in a faraway land? Crunch numbers on your travel history and other savings goals in order to calculate how much you can afford to spend each year on travel. Then, assign a concrete dollar amount. Divide that by 12 to figure out your monthly travel budget.

3. Adjust Your Overall Budget Accordingly

If you want to prioritize travel spending, maybe you buy a cheaper car or cook at home more often. Use your favorite budgeting tool to play around with different scenarios. Whatever you decide, make sure your total budget doesn’t add up to more than 100% of your income.

4. Follow Your Monthly Travel Budget, Even if You Don’t Have a Trip Planned

Even if you don’t take a trip every month, save for travel regularly in your monthly budget. Consider setting up a separate savings account into which you can contribute your budgeted percentage each month. If you have a specific goal you’re working towards, great. If not, setting aside the cash regularly will give you a head start whenever you choose your next destination (or it will allow you to take spontaneous last-minute trips, which is one of my favorite pleasures in life).

5. Actually Go!

I strongly recommend at least one getaway per year, even if it’s just for a long weekend. Vacations allow us to recharge and escape our normal routine, which is an essential part of overall happiness and prosperity.

Plan ahead by including travel in your overall budget so that you don’t end up missing out—or worse yet, racking up credit card debt—to satisfy the need to get away from it all.

  • carolinewaxler

    Antarctica! How did you budget for that trip?

    • LenoreK

      Yes, a little more on Antarctica, please! I want to know how to even begin planning for a trip like that.

      • http://blog.laurenandelissa.com Lauren Lyons Cole

        Seems like Antarctica might warrant a longer article. Sorry to drop a bomb without more explanation! Antarctica is an amazing destination, and one that I certainly think is worth saving up for. I actually decided to go at the last minute (booked my trip less than 3 weeks before I left) which saved me quite a bit.

        • carolinewaxler

          Yes, please!

  • Adele

    Sigh…. this makes me want to travel.

    • http://blog.laurenandelissa.com Lauren Lyons Cole

      Your comment makes me want you to travel! Can you find room in your budget to take a trip? Even a small one?

  • Berrygrl

    There was recently some study (I feel like it was cited in a weekend article from the NYTimes about possessions and happiness levels) that said spending money on experiences makes you happier than spending on things. Makes sense. BUT I feel like that's odd from a money-management standpoint, as vacations are technically money sinks.

    • http://twitter.com/amkade Allison Kade

      I saw that too… on Lemondrop, maybe? This? http://www.lemondrop.com/2010/04/15/money-can-b

      • Berrygrl

        Actually, I think it was in this article from the Times (but fair warning: it's long and I'm not going to read back through it…it's about a woman and her husband who are in debt and reduce their possessions to 100). http://www.nytimes.com/2010/08/08/business/08co

        • http://blog.laurenandelissa.com Lauren Lyons Cole

          As a financial planner, one of my favorite things is working with many clients who have different goals and interests. For some people (myself included) travel is worth every penny. For others, a nice home or fashionable clothes might do the trick. The important thing to remember is to set money aside for the things that make you happy. Proper financial planning is essential, and I think fun activities should be part of everyone's overall plan–even if it's a small percentage (or even if making time for free activities is the only option).

  • Lizzy

    Great article! My budget doesn't really fall into the typical pie chart proportions, so thanks for the reminder that its okay to divide your total budget up however works best for you.

  • Curious Georgette

    What was the cheapest trip you've ever taken?

    • http://blog.laurenandelissa.com Lauren Lyons Cole

      Cheapest trip? Probably Nicaragua. But you can travel cheaply just about anywhere you want to go!

  • howaboutweschmoop

    I wonder… what's the cheapest price anyone has ever paid to go skydiving? Basic research tells me it's $200/person on average.

    • http://blog.laurenandelissa.com Lauren Lyons Cole

      One thing I know for sure – it is way cheaper to sky dive in the US than in New Zealand. I went sky diving in Texas and I think it was about $150, maybe $180. So, I have a feeling it depends largely on location.

  • Eskimo

    I totally want to go to go back to Antarctica.

    • learnvest

      You've been?

      • learnvest

        What time of year did you go?

  • Southerner

    What was your most favorite trip? I am always open to new ideas. We can dream can't we.

  • Ariana

    Cheapest? Zero–if you know someone with a plane and license to go, you can go with them for free! My grandfather was obsessed with skydiving and went regularly. Stupidly, I’m the only one in the family who hasn’t gone…