Don't get us wrong -- everybody deserves, and needs, a vacation. The benefits of time off from life's daily challenges have innumerable health and psychological benefits.
You work hard for your money and deserve to enjoy it.
But the escalating cost of getting away can sap your wallet and savings more than you realize.
According to AAA, roughly 57% of Americans plan to take a vacation of four days or more this summer. Nearly half are budgeting at least $1,000 for their summertime excursions.
While we might scoff at someone who buys a new, cutting-edge computer system or an HDTV multimedia setup once a year, few raise an eyebrow when just as much is spent on a vacation. It is as if "vacation money" isn't real money.
Even the most frugal vacationers may find that their fun in the sun ends up costing more than they expected, especially in the long run. Here are five reasons why:
1. Cutting into savings
Vacations can prove costly, especially if you bring an entire family along.
A recent survey by GfK Custom Research found that the travel behavior of Americans more or less corresponds to that of the average world citizen. Vacationing Americans, though, are willing to spend more money than tourists from any other country.
Despite that, the U.S. still manages to be close to the average of all countries in terms of outlay, the 16-country survey found: About one-third pay up to $1,236 per person, per year, on vacations; 15% spend between $1,235 and $2,472; 18% spend more than $2,472.
Yes, you work hard for your money and value time away from work and spending uninterrupted time with your family. But consider the underlying value proposition of a retirement plan -- compound interest.
If you were to put that $1,200 a year of vacation money into a retirement plan for 30 years (assuming a 5% average rate of return), you would amass more than $84,000 by the time you retired.
Again, this isn't to suggest you should abandon all future vacation plans. But it is enlightening to see how that once-a-year indulgence can add up.
2. Spending money you didn't count on
The costs of vacations and travel can add up quickly (and may be more than you had budgeted for) as you pay extra costs and fees.
If you are flying, there may be baggage fees and an added levy if you pick certain seats or require more legroom. Fees of a few dollars at the time quickly add up: headphones, curbside check-in, in-flight meals and snacks, movie rentals, pillows and blankets, early boarding, airport snacks, reading materials and Internet access. Failing to resist the lure of the SkyMall catalog will add to unplanned expenses.
