Everyone has different reasons to save money each year. Many of us do it to achieve financial independence and/or reach retirement comfortably. As some of you may already know, I’m trying to buy myself and my family as many Freedom Years as possible.
Although I passionately believe in reaching financial independence, I also recognize that life can end at any moment. This is why it’s equally important to balance some of that saving with prudent spending on the things in life that make you happy. The key is to find that right balance, where your spending is not cannibalizing your freedom years, while making precious memories along the way.
Traveling is our Happy Place
Our biggest extravagance in any given year generally involves traveling. We use up most of our available vacation time to travel. We love traveling for the same reasons most people do:
- Getting to explore new places
- Meeting new people
- Experiencing different cultures
- Expanding our food palate
- Relaxing and breaking the routine
Since my wife and I met 20 years ago, we’ve resolved to travel someplace together at least once a year. It’s one of the things we have in common, and one of the things we plan on incorporating into our daughter’s life.
Most of our vacations over those years have been for one week at a time, with at most two vacations per year. Every 5 years we take a “big vacation” and spend two weeks back-to-back traveling. Work and the lack of available vacation time are the primary constraints behind spending more time away. Of course the cost of such trips is also a limitation.
The one-week trips have roughly cost us about $500 per day for everything ( 2 Adults). Since our normal spend rate in a given year is roughly $145 per Day, those trips come out to over 3X our normal daily rate. Below is a summary of a couple of our bigger trips.
2 weeks in Europe for $6,400
The longest travel vacation we’ve taken was in 2007 to celebrate our 5 year anniversary. We spent 15 nights in Europe visiting 5 cities/regions in 3 countries (France/Italy/Greece). It was an amazing experience that confirmed our love for travel, especially in that beautiful region of the world.
We budgeted ~$6,400 all-in for the trip at the time. We planned it all out ourselves, avoiding any tours in the process. You can see a detailed breakdown of our budget below.
Our general Itinerary was:
- 2 Nights in Paris, France
- 3 Nights in Florence, Italy
- 1 Night in Tuscany, Italy
- 3 Nights in Rome Italy
- 6 Nights in Santorini, Greece
Our largest expense for the trip was lodging, and we ended up spending about as much as our budget. The total cost for the trip came in at roughly $425 per Day for the 15 day period. We used some vouchers we had for the plane trip, so in reality the trip cost is a bit under represented.
This trip was quite an extravagance, coming in at a factor of almost 2.9X our normal daily rate.
It was definitely worth it though, because we got to experience some amazing things, check out some pics at the end of the post.
2 Weeks in Spain for $6,400
The next longest vacation we took was in 2012 to celebrate our 10 year anniversary. We spent 12 nights in Spain visiting 6 cities in the Andalucia region. It was another fantastic trip which revolved primarily around food.
We again budgeted ~$6,400 all-in for the trip, and planned it all out ourselves. You can see a detailed breakdown of that particular budget below.
Our general Itinerary was:
- 3 Nights in Sevilla, Spain
- 1 Night in Cordoba, Spain
- 2 Nights in Granada, Spain
- 2 Nights in Malaga, Spain
- 2 Nights in Ronda, Spain
- 2 Nights in Jerez, Spain
Our largest expense for that trip was transportation, and we ended up spending about as much as our budget. The total cost for the trip came in at roughly $530 per Day for the 12 day period.
This trip was even more extravagant than the previous one, coming in at a factor of almost 3.7X our normal daily rate.
It was definitely worth it though, because we got to eat some of the best food we’ve ever had in a gorgeous region, check out some pics at the bottom.
2 MONTHS in Barcelona for $15,000
We are currently planning our next “big vacation”, and this one is destined to put all the past ones to shame. In all fairness, this isn’t quite a full time vacation. I will be working remotely in Barcelona, Spain during the 2 Months, taking about half that time in actual vacation time with a couple of long side trips and plenty of long weekends mixed in. My wife will take a 2 month leave of absence from her job, and our daughter will be joining us for the first time.
If I used past trips as a guide for our budget, theoretically this trip should cost close to $30,000 ($500 x 60 Days). Ouch! There’s no way I could justify that kind of spending!
Thankfully, the longer you spend at a destination, the lower your daily rate. It also helps that we are able to do a short term rental at an apartment during our stay, and that the current EUR/USD exchange rate is very favorable (a 30% improvement relative to our first European trip). We used TripAdvisor to get a fantastic deal, and to research all the destination details.
Below is an estimate of our trip this Summer. Transportation and lodging costs are all pretty much nailed down. The rest is estimated for now.
Our general Itinerary is expected to be as follows:
- 61 Nights in Barcelona, Spain / This will be our home base during the trip
- 3 Nights in Modena, Italy / Side Trip
- 2 Nights in Cinque Terres, Italy / Side Trip
- 2 Nights in Bologna, Italy / Side Trip
- 5 Nights in Provence, France / Side Trip
Since we saved a ton of money on flights, our largest expense for this trip will be lodging, followed by food. We will need to trim back our food expenses relative to past trips, which should be easy since we will be cooking at home at least half the time. With one big exception, our $600 dinner extravaganza! The total cost for the trip is expected to be roughly $245 per Day for the 60 day period.
Although the total cost of this trip is the highest we have ever paid for a vacation in a given year, it comes in at a low 1.7X our normal daily rate. A comparative bargain relative to past trips!
The other great thing about this trip is that it doesn’t impact our historical yearly expense budget of $53,000 whatsoever, since we’re using our mortgage “savings” to fund it. Crushing the student loan curse early in our journey also helped quite a bit.
We’ve been planning for this kind of trip for the past 5 years, and intend on repeating it every year over the next few summers, with varying destinations. This goal is what prompted me to aggressively pay down my mortgage. That enables us to maintain the same level of expenses, and savings, while still achieving our dream of living abroad in the summers.
We had originally wanted to live abroad full time, but this seemed to be the best compromise for our family. We can take advantage of the 2 month summer period when my daughter is out of school, while still maintaining a strong connection with work and family during the rest of the year. There’s no doubt that quite a bit of logistics will be needed to pull this off smoothly (like making sure our home is secure while away), but the benefits will surely outweigh the inconveniences.
I look forward to writing some posts updating everyone on how the reality of this trip compares to the current romanticized version. In the meantime, enjoy some of these pictures from our past European trips:
Readers, would you spend $15,000 on a vacation? What is your average yearly budget for travel? Ever calculated your daily spend on vacation compared to normal life? Share your thoughts and comments below (no such thing as a late comment)!