Spending money on vacation is easy to do. It's one of the weirdest money phenomenons I’ve noticed. People spend way outside their normal limits while on vacation. It’s as if we enter a casino where money has no value because everything is clay chips.
Vacation money is crazy money. With millions of people itching to travel after the pandemic is over, revenge spending is all the rage! But you can stay financially disciplined while still having a great time.
During the first week of our two week European business trip, we stayed at reasonably priced 4-star hotels. We figured, let’s focus on hotels in the best locations since we’d only be visiting each country for 2-3 days.
For dinner, we budgeted 50 € ($60) or less for two. This amount was reasonable as boiled beef and potatoes didn't cost too much, nor did pizza, pastas, and salads. A buffet breakfast was always included in our hotel stay so we never spent very much on lunch if anything at all.
Like with everything, we spent well within our means because we’re frugal that way. After all, it’s very hard to achieve FIRE without aggressively controlling your spending.
When we arrived at our hotel in Paris from Budapest it was about 7:15pm. We were given a tour of all the facilities. This is where our money discipline began to unravel. Spending money on vacation within a budget can be challenging even for the most frugal of us. The thrill of new experiences abounds.
Living It Up Like A Boss And Spend Money On Vacation
To welcome us, our hotel left a bottle of champagne on our coffee table. Wonderful! We drank the entire bottle. We were having so much fun that we didn't realize it was already 10:45pm when our stomachs started gurgling. But it was too late to go out for some food.
Instead of holding out until the morning by going to bed hungry, we ordered 38 € spaghetti bolognese through room service. We figured, it was worth spending a 18 € premium to have food delivered so late in the evening. The rationalization of spending lots of money had begun! To the hotel’s credit, the bolognese was exquisite. We left a 5 € tip.
Where's The Free Buffet?
The next morning we moseyed down to the hotel lobby for what we thought would be another delicious buffet breakfast since we had had one every morning the week prior in Czech, Austria, and Hungary. To our surprise, breakfast was not included.
Before we could pretend we weren't hungry to save some money, we were ushered to a breakfast table by an eager hotel staffer who suggested fresh mango and multi-berry juice. Sure, why not. I love fresh juice! When we got the breakfast menu, there were no prices, a sure sign that we’d be in for some pain.
Since we ate late and didn’t know any of the prices, we decided to eat light to hedge ourselves. We could always eat more later. This was an establishment where it is embarrassing to ask for the price of anything. As they say, “If you have to ask, you can’t afford it!” We didn’t want to look like paupers.
It turned out that only sharing a french toast was a wise move because our breakfast bill came to 41 € ($50) with the two juices! At least the French toast was damn good in Paris, just like how Peiking duck is damn good in Beijing. You see, things really are much more expensive in places like Paris than San Francisco, the cheapest international city in the world where all foreigners should buy real estate.
Having spent 46 € including tip on breakfast, we figured we might need to increase our dinner budget from 50 € to 100 – 150 € per meal. Paris is more expensive than the Habsburg Empire countries, and we wanted to eat well, so we absolutely did.
Spending Money At The French Open
Before arriving in Paris, I e-mailed the hotel concierge about French Open tennis tickets. They wrote back:
580 € Category I (best seats)
460 € Category II
390 € Category III
I was shocked because I remembered eight years ago getting tickets at the stadium entrance from scalpers for 50 €. Thus, instead of buying the tickets through the concierge, we decided to try our luck getting some scalped tickets.
We walked around the entire Roland Garros complex and there wasn’t a scalper to be found! It seems like all the scalpers have moved their business online as it’s more efficient, safer from the police, and probably more profitable. Have you too figured out how to build your brand online? If not, it's time to get going.
Disappointed, we decided to make the most of our outing by eating some wonderful patisseries at the Molitor/Auteil area before taking a train ride to the Eiffel Tower. From there, we walked to the Invalides and then back to our hotel.
The concierge greeted us and asked if we had any luck. I told him “no” and requested two, 390 € Category III tickets to the French Open for tomorrow. He apologized and said the tickets were now 420 € each. Drat. We had rolled the dice and lost.
Waiting For The Right Moment
I had been delaying my purchase because of uncertain weather conditions. If there was rain, we'd have to wait. And if the day got rained out, we were told we wouldn't get our money back because we were buying the tickets on the secondary market.
I'm glad we waited because the French Open was actually delayed for 2-4 hours the first two days we were there, and got completely rained out for the first time in 16 years on May 30 when we left to go watch the Warriors win game 7 of the Western Conference Finals at home!
Paying 8X the face value of tickets is absurd, but I rationalized it as a “foreign visitor's tax” and a necessary premium for buying at the last minute.
If I came all the way to Paris for the French Open and didn't attend, I would feel like a complete idiot even though I knew that back home, I'd never pay more than face value for tickets! In the end, spending close to $1,000 for a couple tickets was worth it.
Why Do We Spend So Much More On Vacation?
I’ve thought long and hard about why frugal me spent so far over budget while on vacation and here are the reasons I’ve come up with. Spending money on vacation was so easy to do. Yet I have so much trouble spending at home.
5 Reasons Spending Money On Vacation Is So Easy To Do
Take a read through these reasons why I think spending money on vacation is so easy to do. Let me know what I'm missing.
1) When will we ever come back?
Given I’m on a mission to see a new country every year, the chances of me going back to France within the next five years are small. The last time I was in Paris was when I visited my mom for a week in 2008.
Since we never know when we’re going back, we might as well live it up right? We may never return! The attitude is kind of like knowing you’ve only got so many years left to live. Time to spend to the max because we can't take our fortune with us.
2) Business expense.
I don’t travel for leisure. I travel for business. If I happen to experience some pleasure while on business, so be it. There’s no law that says you can’t have fun while working.
Given most of my travel expenses are deductible, I often rationalize that the cost is free because my business entity is paying. The reality is, I own my business, so there absolutely is a cost. I’m just getting about a 30% discount because that's my effective tax rate.
3) Proving others wrong.
Given I put myself out there online, I’m often subjected to judgement by others who think I’m too frugal or too cheap for my own good. Every time I get judged, I get a little annoyed because how I spend my money is a personal decision.
Telling me I’m too focused on money when I write a Personal Finance blog is stupid. Are you going to tell a travel writer she's too focused on travel? Telling me I don’t stop to smell the roses enough is ridiculous since roses are all I’ve been smelling since I engineered my layoff at the age of 34!
Or telling me that I’m cheap because I drive a Honda Fit is insulting to Rhino because he’s the best car a driver could have in the city. I sometimes catch myself spending money on vacation more than normal to “show them” I can blow money and not give a damn with the best of them.
4) Sunk Cost, Proper balance.
I’m a big fan of discovering financial harmony through ratios. For example, I’ve got a fiscal responsibility ratio (FS-FR) that is measured by taking the value of your house divided by the value of your car. The higher the number, the more fiscally responsible you are. You don't want to be the guy renting a one bedroom and driving a Porsche at age 35.
Given my suite cost over five figures for seven nights, it’s silly to keep food and entertainment spending at normal levels. I already did that while I was in Czech, Austria, and Hungary so it was time to open up the wallet in France. When you've already sunk $10,000 into a vacation, what's another $500 right?
5) Telling ourselves “We're worth it.”
Perhaps the biggest reason why it’s easy spending money on vacation is because we tell ourselves we deserve it. Justifying our spending because we’re worth it is how many people get into massive consumer debt.
Credit card companies make huge money off the “I’m worth it” crowd, and a whole fintech lending niche has emerged to also capitalize on excessive spending.
I told myself that spending ~$1,000 for two French Open tickets was OK because I was able to get to a 5.0 USTA ranking so late in life. Less than 3% of players are rated 5.0 or better. Most played college tennis and started with a 5.0 rating and then as they aged trended downward, not up. Ain't I worth it? Finally, I told myself that I'm working every day in Paris, so why not live it up a little.
Spending Money On Vacation With Control
Controlling vacation spending is different from controlling day-to-day spending. The average American worker has 16 paid vacation days a year but only takes four days off according to the US Travel Association. Whereas in France, they get 31 paid vacation days a year, and they probably take most of them.
Therefore, there are really only 1 – 5 weeks in a year during which the average person can blow up their finances and get into major credit card debt! While this time period is relatively short, you can still do a lot of damage spending money on vacation.
Here are some no-brainer tips to control your vacation spending.
1) Write out a budget in Excel.
Start with an overall budget and then break it out with each line item expense. For example, my total travel budget for two was ~$5,000 a week. From there, I broke down everything in an Excel spreadsheet for flights, hotels, food, entertainment, and transportation.
I made my budget fit what was available and not the other way around. You may still go over budget, but at least you have a general idea of how much you can spend. I know a $5,000 a week budget equals $250/night for hotel, $150/day for food, and $200/day for entertainment if I take economy class.
Now, I just review my cash flow online to look at the big picture.
2) Take out enough cash to pay for all food and entertainment.
Presumably you will pay for your flights and hotels with your credit card. For everything else, take out the amount of cash needed to cover your budget and lock your credit cards away. To further control your spending, prepare separate envelopes of cash.
Any money left over from each envelope may be placed in the next day’s envelope. Not only will you save on 2 – 3% foreign credit card transaction fees, you’ll also save yourself a trip to the ATM, which also charges a fee if you aren’t a premier banking member.
3) Look for local alternatives.
Hotels and tourist hot spots charge premiums because they can. If you want to save max money, then your goal is to be as local as possible by reading all the guide books and online reviews available.
If you have a friend who lives where you are vacationing, definitely reach out for food and entertainment advice. Consider renting an apartment through Airbnb instead of a hotel. Or, if you can stay with a local, even better.
I never eat at Fisherman’s Wharf in San Francisco because the prices are 30% higher and the food quality is 30% lower than comparable restaurants. I know all the secret gems in our neighborhood. Our goal as travelers is to find out where those gems are.
4) Analyze your previous credit card bill before departure.
Hopefully none of you have revolving credit card debt. Credit card interest rates are higher on average than what Warren Buffet has returned a year in his illustrious career.
I’ve found it’s very helpful to not only be aware of your previous credit card bills, but the exact line items that made up the bill. The more you are aware of your spending habits, the easier it is to control. You don’t want to be saddled with long term debt thanks to temporary joy.
5) Multiply everything by 1.7X.
For day-to-day spending control, it’s good to multiply the potential spend by 1.5X to get the amount of gross income required to afford the item, service, or experience.
Given there are often foreign exchange and transaction fees when spending money abroad, multiple everything by 1.7X after you’ve completed the exchange rate calculation.
The goal is to make you aware of how much you need to earn so you don’t go overboard. Heck, multiply everything by 2X to make the math easier!
Ideally, you bring a credit card with no foreign transaction fees when spending money on vacation. You can save a lot avoiding unnecessary fees.
You Only Have So Many Vacation Days To Enjoy
Despite highlighting how easy it is to overspend on vacation, I’ve never once regretted the money I spent. Have you? The only thing I adjust is the amount of vacation time spent traveling because traveling can get tiring sometimes.
The experiences we gain from vacation or business travel are priceless. The key is to make sure our experiences don’t fade too quickly by creating picture albums or writing posts about our experiences. Having a blog is my perfect solution. When I'm old, I'll be able to still reminisce the good times.
I used to dread those 10+ hour international flights, but now, I see the time as a great opportunity to write a couple posts in between a movie and a nap. If you can turn vacation travel into business travel, you’ve got yourself a winner!
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84 thoughts on “Spending Money On Vacation Is Easy: Vacation Money Is Crazy Money”
If you’re working full-time, the most expensive part of traveling is taking time off of work to do so. E.g., if you make 100k per year pre-tax, get about 75k after tax, and work 1840 hrs (52wks – 2wks holiday – 4wks vacay = 46wks), that comes out to a little over $40/hr, or $320/8hr workday. If you’re already spending so much just to have the time to be there, what’s a few hundred extra dollars?
any thoughts about living it up in las vegas for a short vacation?
it aint the same in vegas on a super fruval budget. staying at the motel 6 off the strip vs on the strip at Wynn or Belagio…
what are your thoughts on gambling in general? i know the house has the edge, but nothing can compare to a streak at the craps or blackjack table.
where do you stay and what do you like to do in Vegas?
Wow that french toast though. It’s basically just bread with egg right? How does one get away with charging basically $50 for that, even WITH the juice
Man, it’s been so long since I’ve been on vacation. Will keep all of this in mind going forward. I’m hoping to go to Japan this, or next year. Hoping dividends can cover a good portion of it. :)
I can relate a lot to this article. I am flying to France next week to watch my national team play in the EURO 2016 soccer finals. And I’m going through the same rationalizations as you about my spending while there. My budget is way lower than yours but still quite higher than my daily expenses. I’ve gotten used to make myself relax when it comes to spending while on vacation. I consider it a present to myself for all the sacrifices.
One thing I do to calculate my spending while on vacation is to deduct the amount of money I’d spend at home(food, gas, going out). I’ll be traveling Europe for 3 weeks. At the end the real expense for me is the flight ticket. During this trip I’ll be using AirBnB during my stay in France for half of time, then I’ll be staying with relatives and friends back in Albania.
As far as credit cards and cash, I plan to bring some cash with me, but I’m not worried about transaction fees. I was in London last thanksgiving and I used my Capital One, and it was great. No fees, and great conversion rate. I think the only other CC that doesn’t charge fees while abroad is Discover.
If you’re still in Paris next week, let’s grab a coffee! ;)
I just noticed that you’re back to SF. Maybe, next time! :D
Love your blog! My husband and I are definitely guilty of “who knows when we’ll come back here!” attitude. We went to Melbourne for the Australian open in January and stayed at the Crown Towers, where most of the top players stayed as well. It was nice seeing Nishikori and Dmitrov at breakfast each morning, so the $12,000 cost of 1 week stay in Australia (also went to Sydney), in my opinion, was easy to justify. We also did a Maldives/Dubai trip couple of years ago in one week that cost $30,000 (we stayed at a beautiful water bungalow with plunge pool in Maldives and Burj al Arab in Dubai, which made up for most of the cost). We fly economy! We still save about 75% of our net income and live way below our means when we’re at home, so “we are worth it!” :) My motto has always been work hard, play harder!
Oh wow! The Aussie Open is the only major I haven’t been to. Have you been to the others, and if so, how does the Aussie Open compare? I just love the French Open. I just don’t love the cost. The US Open you can just get a ticket for $50-80$ right in the front no problem.
Maldives….. on my list next time I go to Asia for some diving.
The Australian Open was amazing- and fish and chips was about $7 for a huge portion at the venue, compared to what probably would cost $20-25 anywhere else. You must schedule a work trip there in January! :D. I went to college in NYC and played tennis (div. III). Our home court was the National Tennis Center so it was awesome! I used to go to the US open each summer when I lived in NY, a lot of times for free as I taught tennis for NYC Parks and Recreation in the summers. Never been to the French Open and Wimbledon, but definitely on my bucket list.
Very cool! I’m thinking of doing our annual new year business kick off in Melbourne in January for sure! Then maybe the Maldives.
Very cool you got free tickets to the Open. I’m excited that you have never been to the French and Wimbledon. The venues are terrific. But in the French Open is more entertaining because the rallies last longer.
Great pics! Glad you had an awesome trip. Vacation is one thing I tend to splurge on. If I’m going to spend money, I like to spend it on experiences more than material things. I think the joy and reward last longer.
The pic of that french toast is making me hungry!
I loved this article and a several times overspent on Vacation. The easiest way I have found to save money when traveling with a group or family is renting a house/condo. When you rent houses you have the flexibility to control food and alcohol costs. You can save a fortune by having a glass of wine or cocktail before dinner. I also found if you want to eat at a nice restaurant lunch is 30 to 40% cheaper with the same excellent service and food. Also you tend to drink significantly less at lunch then dinner, and alcohol at expensive restaurant can be 50+% of your bill.
A couple of article ideas for your travel blog would be to compare VRBO vs. Airbnb. I have used both and find each side has pluses and minuses, but never spent the time to research each site. Another article would be to give tips on renting from these sites. My mother and father love to rent houses for travel, and here are some of her recommendations. 1. If the first picture is a pool don’t rent. 2. Look at the artwork on the wall if there aren’t any or look cheap don’t rent. 3. Read all the recommendations, but take the negatives with a grain of salt. 4. If the first picture is of the beach be very cautious. 5. Really focus on the kitchen if they maintain the place it will have all of the amenities you need to cook. Would love other suggestions! Keep writing I always find something I can use in my life with every blog!!
Sounds good Robert. Thanks for the new article suggestions. I’ve been meaning to write about Airbnb for a while, especially since Airbnb is based right here in San Francisco. I may very well do that for a couple of my bedrooms in my existing house to see what it’s all about and to see if I can meet any cool people and learn some cool strategies to make extra income on the side. For some reason, I’ve been reticent and letting strangers into my house more then into my car.
But maybe I can be very picky in who I can let in. Renting out my house for two weeks while I was in Europe would’ve been great, but then what if they wrecked the house!
Wow, how one can only take 4 days off from their job is insane. I get 20 days and that’s right…I use all 20! Sometimes I even go negative and owe vacation days ;) Funny thing though, I still often do my own personal work (i.e. blogging, investing, a side hustle) on my days off because it doesn’t feel quite the same as working in a corporate office. I’m sure you get what I mean since you’re blogging on vacation. Great pics by the way!
I did a 6 month vacation in Europe when I got out of one job, before I wanted to hop to the next one. I saved up for a long time and constantly planned everything I wanted to do. Paris was the one place I had any regrets going to. I like the museums and the tourist spots. But I had a hell of a time trying to find places to eat that weren’t American chain restaurants. It was annoying. But the bakeries everywhere where very quaint and fattening. :)
Falling into the vacation money crunch is common. My wife and I find ourselves back and forth between the “we’ll only be here once” and “but let’s not blow the entire budget on one dinner!” I like your give and take with meals though, we do this quite often as well. If we can find a hotel that includes breakfast, perfect. Then we’ll have more to spend for dinner (if we choose, not that we have to spend more). This post really hits home for so many as the summer vacation season is upon us. Great read!
Wow, just wow at those prices. Thank you for the pricing detail. I wondered about actual costs. Now I know that if I did a full European tour, the costs would financially break me.
It’s truly out of reach for the time being. One day maybe.
I think the number one reason people spend more on vacation is convenience. The entire point of a vacation is to relax and for most W-2 employees, they are only visiting for a few days. Finding the best deal on the spot is the opposite of relaxing as you spend energy looking for and weighing your options. You can maybe get away with that if you’re traveling by yourself but two or more people and it goes sour quickly.
The way I combat this is planning everything upfront including where you’re going to eat. At the very least you know what to expect when you get there and all the decisions have already been made.
When I travel alone, I am more spartan and happy to walk very long distances. When I travel with my girlfriend, the memory is more important than the money saved. We have not been extravagant, and have each other for entertainment. We also pre-pay as much as we can and pay attention to menus when making reservations. I email us a list of other restaurants in case she just does not want the best flounder in the world etc. I prepare us really well. Then we sail smoothly through. And I get to see her smile in a new part of the world.
Sounds like a great trip. I still remember watching the US Open while training in New York for my first job.
We are the same way about spending money on vacation. We went to Las Vegas last year – stayed in an 1800 sq foot room at the Four Seasons, took the kids to dinner at Le Cirque, and watched O from a luxury box. It was seriously ridiculous.
Another way I look at it. Similar to the Tim Ferriss slow carb diet, take one day per week to eat whatever you want. It keeps the cravings from overtaking you.
The same with spending. Most of our vacations are funded using airline points and staying at our family’s place in Florida. It’s great and nearly free.
We budget for a trip like the Las Vegas one once every year. And it is something we all look forward to. We use it as motivation to keep the rest of our spending in control the rest of the year.
Wow, how much did a 1,800sqft suite at the Four Seasons cost? that is big balling slacker!
I am far from a baller!
If I remember, the suite was $900 per night, but we never pay full price. We are pretty good at negotiating discounts and had booked something much, much less expensive and got this suite instead.
Also, at the time, our company was spending lots of money there as we hosted an annual conference at the hotel.
Actually, that’s one of the great things about Las Vegas. It is quite a bit less expensive than many other bigger cities. And they’re always willing to make a deal with you.
It is amazing to see budgets fall by the wayside. I took a trip to D.C. last year and I had planned $1,000. But then this came up, and that came up, and this festival is going on and $1,000 turned into $1,200. I rationalized it because I figured, we’re already here and the experiences will be awesome.
Then I got home and started logging the budget and realized my 20% overage. I had great fun and for $200 extra, it was probably worth it. But the bean counter in me cringed.
Overspending on vacation is easily done and certainly something we have done in the past. These days we are more likely to have a good idea what the whole vacation will cost us, not just flights and hotels, but food, entertainment etc. this is then the expected budget for the vacation.
We tend to plan some meals in advance, use Yelp and Google to find non-touristy places, and only spend on hotel food when there isn’t any other choice. But on top of that we’ll plan and budget for a ‘big’ special meal too
Hmmm . . . . I was in Paris not that long ago. We ate at bakeries for breakfast and always ordered those great pre-fix specials for dinner and didn’t pay close to what you ended up paying for food. We stayed away from the Champs D’Elysee and other upscale tourist areas and ate off the main drags.
On the other hand, I just came back from Big Island Hawaii – Kona Coast – and the restaurant prices I found were more than in France. We tried to economize by buying groceries but they were extremely expensive!
Grocery costs in Hawaii are the highest b/c everything is imported.
Clearly, you did not have dinner at La Fouquet’s! :) Did you eat at Laduree for dessert? Amazing.
Getting a little grey under the hat there Sam, you sure your not 40 yet? ;-)
Hah! As I zoom in, my hair does look grey doesn’t it? I assure you, there’s not one gray hair on this 39 year old head. It’s the luxurious shine after taking an Evian shower with enriched minerals!
Now if the readers start stressing me out… well. But I have found since leaving work in 2012 my stress level has gone way down.
I feel you on this one. We are taking a spur of the moment trip to Hawaii next month so everything is being paid for out-of-pocket. So far we have the flights and hotel covered. I have budgeted $150 per day for food and etc. The mark-up would be north of $250. Let’s hope it doesn’t come to that! Either way, I plan on enjoying myself.
I usually only travel for business (other than spending time with DH’s family, but they live in a rural area where the only place to buy anything is Walmart). Since I don’t own the business and since the money goes away at the end of each year if I don’t spend it, it doesn’t affect me much. There are limits to how much I can spend per meal, but I don’t generally hit them.
It’s so much easier to spend on vacation especially when you’re staying at a fancy hotel. I suppose that’s when status comes in handy. At Marriott you get free complimentary breakfast once you reach gold status. At $30+ per person for breakfast, that can quickly add up. When I am on personal vacation, I usually stay pretty frugal and pick the cheaper places for food and such. But you’re right, when on business travel, expenses wouldn’t be on the top of my mind.
#6- You get a break from stealth wealth!
Yeah! Good point! Need a release valve to live it up sometimes right?
80 – 90% of the world is really cheap to travel in. If you stay in those countries, you don’t need to worry too much about spending or budgeting. Outside of western Europe, Australia, North America, Japan, some Caribbean islands, and the odd luxury island like Maldives, the rest of the world is surprisingly affordable.
Not too many people would want to travel to the other 80-90% of the world though.
lol at the free bread picture caption…..sure it’s free. But I agree, we should be financially responsible and on vacation live a little! It’s also important to pick and choose when to splurge. If we splurge all the time on vacation (i.e. fancy bfast lunch and dinner every day), then we won’t savor it as much. Another way to control spending is to research restaurants and attractions before your vacation to get the best value and also help to spend time wisely.
$1000 for a couple of Tickets!!! That’s insane Sam!
4.0 USTA player here in Las Vegas and pretty much every year my friends and I attend BNP Paribas at Indian Wells where my tickets are like $60 each.
I’ve never been to any of the major tournaments, and I do love tennis, but in my mind… what’s the difference really? You see the same players, and at Indian Wells, I hear you get closer to the pros than any other tournaments.
It would be hard for me to justify spending that kind of money, but I guess if you hit critical mass, and on vacation, its’ OK?
Post Great BTW.
Come on Ace! I’m a 5.0 rated player. I’m worth it, even though I’m 0-5 this year and hope to be bumped back down to 4.5! :)
You live near the greatest non major tournament. I was at Indian Wells this year and it rocked. Up close and personal, tickets were reasonable ($495 for finals day vs round 2 at FO), and no crazy long lines!
I’ve done the US Open 4X, Wimbledon (tickets were $650 each), and French Open twice. The US Open is great b/c you can actually just show up and buy tickets at the counter. Huge lines, but affordable at $50-$100 for the first week.
Worth going. As a tennis player, you owe it to yourself to go around the world, enjoy the sites and sounds, and watch the best tennis around. Maybe if you reach a 80% winning record in 4.0, treat yourself. Or if you get bumped to 4.5!
I make a habit of allowing myself one or two splurge restaurants for each expensive European city like Paris or Rome. Otherwise I check listings for budget-friendly places. Yes, they exist. Or I’ll go to a neighborhood grocery, buy a baguette and some cheese and fruit, and congratulate myself for eating cheaply and well.
Great article Sam! I find it very easy to splurge money while on vacation as I want to enjoy the country to the max. When I went to Cuba in 09 I took the opportunity to see the island and what is had to offer. We had a tour around the place and it is amazing what the actual living conditions are in the country. Their city is absolutely beautiful and reminded me of Italy with the cobblestone in the 20th century.
I have found that budgeting everything on excel is a great start but whenever I established a budget for travel I usually multiply my final number by 1.33 as I expect to spend more money than I plan. Travelling is worth the money as it builds experiences, and like you said, you don’t take your money with you when you are gone.
Oh man, tell me about Cuba! How did you go then? Cuba is on my go to list for one week for sure!
I am not a US Citizen. I actually went there to represent my country for a swimming event that is hosted throughout the Caribbean. Will be interesting to see how that country evolves now that they welcome FDI.
Lucky for me, my next vacation is my honeymoon in September and it will all be paid for by the honeyfund we set up. Greatest idea on earth, its basically just a cash registry for honeymoon purposes and we were able to get more then enough money to have a lavish vacation.
Im excited about it although dont get me wrong, on normal vacations, I try not to go buck crazy with the spending. :)
Great job setting up a honeymoon fund! That would not be wise going into debt for the wedding or honeymoon. Where are you going?
I’ve set up a mid-life crisis fund for a mid-life crisis car whoo hoo!
Love the idea of a mid life crisis fund. I should start setting one of those up. For the Honeymoon we are going to costa rica for a week. I have been there once before and it was paradise so I really want my wife to experience that as well.
Cant wait! Plus its cheap there! ;)
Ah, gotcha! Hey, can I suggest one important thing? Please bring a lot of mosquito repellent and stuff. The zika virus is prevalent there and can affect couples who want children.
I’m interested in how the travel deductions work:
“I don’t travel for leisure. I travel for business. If I happen to experience some pleasure while on business, so be it.”
What business do you travel for — the blog? Is it enough to write a blog post about it? Seems like a great deal and a great vacation! Congrats!
Mary, I’m in the online media business. In order to write about European travel, you gotta go to Europe!
Check out this post: https://www.financialsamurai.com/the-best-way-to-travel-for-free-and-lower-your-taxable-income/
Wow, it seems like you really lived large in Paris! I’m surprised how expensive food is, but I guess that’s the tourist tax.
I spend more on vacation too! It’s hard not to!
You provide some really good tips for controlling vacation spending. I like the idea of creating a budget in Excel.
Bringing cash is a good idea, though I wouldn’t travel with too much cash on me at any one given time because of the risks involved.
Generally, I am able to keep a tight grip on my spending. But for many reasons, the wheels come off a bit when I am on vacation.
Recently, Mrs. Superhero and I spent 5 days in St. Louis. It was a short drive from Chicago, and we were looking for an opportunity to get away for a bit and recharge. My wife knows that does not happen if we visit a locale with too much to do (NYC, SF, Miami), so St. Louis was perfect in that regard.
In St. Louis, we stayed in a nice hotel on the West End of the city, visited several local breweries, and gorged ourselves on the best BBQ we’ve ever had at Pappy’s.
Despite my creation of a quick Excel budget, we ended up going over budget for some of the reasons you succumbed to room service, Sam: convenience, desire for new experiences, and a carefree attitude. However, I learned that it is good to let loose a bit, from time to time and within reason.
I am enjoying living vicariously through your posts on your current adventures. Man, I need a vacation ASAP!
Never been to St. Louis. Sounds nice. I think you’ll enjoy another post I wrote with a 2 min video highlighting the room we stayed in in Paris. But, I don’t want to post too much travel stuff in succession. Stay tuned!
It’s definitely easy to overspend on vacation for all the reasons you mentioned. However, I really believe once you’re at your destination, it makes sense to spend a little more money to really enjoy it. For example if you’ve spent thousands of dollars on a trip to Paris, you shouldn’t stress over the $20 to go to the top of the Eiffel Tower. It’s overpriced, but that type of activity is kind of the point of the trip.
On our 25 day European mega-vacation the biggest money saving trick was bringing my parents so we basically split the cost of everything. We were also able to save a lot of money by planning ahead and using AirBnB. Renting a car and driving everywhere instead of buying train or plane tickets for four people saved time and money as well.
25 days is a mega trip! I’m excited for you! Tell us how you get to go for so long? Baller blogging?
My wife and I are planning a trip to Dublin, Ireland for our anniversary. We live in the Bahamas and are tired of the beach and sunny days (NOT!). She has always wanted to go and I figured surprising her with the trip. I like the fact that you mentioned AIRBNB, there is also VRBO if you haven’t checked that out. Its awesome here in the Bahamas especially since the hotels here are expensive. Plus if you never been to the outer islands you are missing out. Thanks for all the tips.
Yeah, I should definitely highlight VRBO too. Thanks for letting me stay at your place in the Bahamas!
Wow, I’m thinking I might detour around Paris to save a few thousand euro next time we visit Europe! ;)
Those nice hotels get you with the crazy food prices in their restaurant downstairs (or room service). I think I would let my stomach eat it’s own lining before paying $50 for a bowl of spaghetti. Just couldn’t part with the money!
Haha, yeah, we were definitely thinking of just going to bed that first night starving. Sleeping is a great trip to get rid of hunger and sadness for sure! But alas, we just got to Paris baby!
I think many (me included) probably look at a vacation, somewhat subconsciously, as a reprieve from everything – life, work, even our budgets! This is when the justification kicks in – “it’s cool – I’m on vacation”
I often notice this same justification game when people make purchases that aren’t part of their everyday spending. Why do so many people talk themselves into spending up when buying clothes, TVs, cars, houses?
Nice vacation. The food seems ridiculously expensive. We haven’t been to Paris since 2003 so I guess inflation had done its job. We definitely spend more while we’re on vacation. We are usually still a bit frugal, but we don’t watch the spending as much as when we’re at home.
Should have spent more money when we were in Europe in 2003. :)
Paris has rocketed in cost since 2003. It didn’t feel that expensive in 2008 either.
Should have bought property then, there!
Although we’re traveling the world, we’re not really on vacation. That said, we still find it hard to control spending at times because some areas are just much more expensive. We just got to Switzerland this morning and have already experienced sticker shock.
Sam, have you seen anyone drinking tap water in a restaurant in Europe? We often tried to get served tap water when we first got here and now we’ve just given in and buy a fancy bottle of water at each meal. It was painful to pay for water at first but we’ve already become used to it. We never would have paid for water at a restaurant back home.
We’re able to save a lot of money on housing and food when we stay in month long rentals with well-equipped kitchens. The short stays are more costly because of the extra trains and planes, non-discounted accommodations, and greater frequency of eating out. We’ve also found that traveling slower is much more enjoyable (for us) and short stays here and there can be exhausting.
We’ve definitely been using the “when will we ever come back?” excuse a lot, but it’s valid and we’re still not really splurging on anything.
Btw, great choices for dinner. I love onion soup, Caesar salad, and beer.
Glad you had a nice trip Sam. Go Warriors!
Go Warriors! Life savings to win it all! :)
Switzerland is ridiculous expensive! I was in Zurich and Lucerne in 2014 and I felt like a beggar eating just bread and tap water.
I was always served Evian bottled water for 8 € or thereabouts when I was traveling. But a bistro did give us free tap our last night amazingly.
I would have eaten more than just the soup, salad (it was for TWO), but then I’d go broke.
Nice post, there is also that feeling of, you aren’t sure when you may get an opportunity to visit a vacation spot again, so why not live it up. I will be going on vacation at the end of this month, and my approach will be to budget ahead of time and try to package some of the costs or activities I know I will want to do whilst there. I will let you know how it goes.
Sounds like you guys had a blast! And why the fouquet not, indeed. Ha! :)
The hard part for me about controlling vacation spending is that there’s no automatic routine to keep finances in check. At home, I have my regular schedule, so I’m not out shopping at 2 pm or eating out all the time. On vacation, it’s a whole different ballgame.
I do the vacation Excel spreadsheet like you do, and usually I stay in the cheapest hotel I think I can stand, because that ends up saving a ton of money, especially if you’re staying for several days. During our last trip to Cancun, the boyfriend and I stayed for about a week, which included four nights at a low-cost hotel in a great location in Playa del Carmen (and with a super stiff and crappy mattress) and then two or three nights in a much nicer Marriott on hotel row in Cancun. The money we saved on the first four days helped us afford the nicer hotel at the end, which was good because our backs were so stiff by day 4 that we needed a nice, cushy bed. We also cheaped out by getting the buffet breakfast option at the Marriott and skipping lunch each day we were there, by walking to the nearest Wal-Mart to get snacks and other provisions for the trip instead of raiding the mini-bar, and by using Yelp to find cheap places to eat that the locals liked, versus sticking solely to the tourist spots with mediocre food and high prices. It was a great trip!
Hah! You caught my favorite line in the post. :)
Use the CASH tip and leave the credit card back in the room.
Want to stay Financially Disciplined?
If you open your eyes, you’ve got everything you need right here for a vacation.
What’s the point of being financially independent then? With this logic, you could follow it all the way to a Howard Hughes like scenario – nothing is worth spending, right? Air is free!!
Sam addressed this pretty well in the article. The key is to know what you value, and budget for it prior to spending it. You’ve only got one life.
Our last few vacations have been to beach resorts – I love the ocean and snorkeling. We usually stay all inclusive – it’s easy and if you find a place with good food it’s worth it.
Choosing a place to eat in foreign countries is always tough if you don’t know the area! Last time I was in Europe the day we didn’t have any locals with we wandered around for an hour trying to find a good spot and ultimately settled for a place that had an English menu
All inclusive is a good idea. Totally helps limit spending. Hmmmm… ocean and snorkeling. Can’t wait. Off to our semi-annual business offsite in Honolulu in July. Got to do some team building and strategize for 2H.
My wife and I are currently traveling through Europe and going to Paris tomorrow and Roland Garros on Friday. Would you still be around Thursday / Friday for a beer?
I see financial independence as a way to be gain more freedom, so we do try to be reasonable on the money we spend while on vacation but if we want to treat ourselves, we don’t hesitate either. Eventually we spend on what matters to us and we cut on the rest. Hope you enjoy the game!
Oh wow, awesome! How much were your tickets and how did you get them?! They were all sold out when I went and there were no scalpers.
I just got back to SF b/c I gotta find a tenant or sell my condo!
I like tennis but not enough to pay the price for the men semi-finals, so we have tickets to see the women doubles semi final and the Legends Trophy matches on the side courts. Tickets were 20E online on the official website.
Good luck finding your new tenant in SF!
This is something I’ll have to keep in mind in the future when travelling. Right now I’m shifting all my extra money towards savings and debt, but someday I’d like to travel and NOT go back into debt. :)
Staycations are fun! Pretend you are a tourist in your own town.
When I’m feeling unmotivated or low on spending desire, I love playing cheap tourist in San Francisco by going on hikes.
From your picture I see u are young. I am 69. This is what I have learned. Once I reached a higher income,I paid more taxes. So I decided to work harder and make more money. I did and paid more taxes. My highest expense is taxes. My suggestion is hire a financial advisor (not a stock broker) and start to talk taxes now. You haven’t lived til the IRS writes u a letter that you owe $84,000 and they want it in ten days. You will make plenty of money in your life. The trick is keeping it from the IRS.
lol, you sound like you have a lot of war stories with the IRS. If Sam doesn’t mind, I would really like to hear about it.
It is amazing how spending can skyrocket when you are outside of your environment. I find that it is much easier to rationalize things that I would never consider rationalizing when I’m at home, especially when it comes to food and experiences. I have admittedly paid a lot of additional “tourist tax” by paying a premium to get ordinary things just because I was in some place different.
Hope you are enjoying the Open! My wife and my goal is to attend the US Open someday but the French would be an amazing experience as well!
It was a blast! I’m back in the salt mines of San Francisco now, and oddly feel stressed b/c I’ve got so much to do, even though I still had the same things to do thousands of miles away!
Gotta get some tenants or a buyer for my place is the number one thing for this month.
“We’re worth it,” or, “We deserve this,” is a common theme for us when we are on vacation. We’re there to have fun right?
To help offset the same problem of overspending that we face when on vacation, I follow along with the cash advice you mentioned. I find it much harder to spend physical cash than it is to swipe a credit card.
I also like to plan ahead a bit, since it can be easier to find great places online nowadays. It also helps prevent impulse purchases for food or drinks (our biggest vacation items).
Looking for local alternatives is spot on. I found a few too many occasions when we ask staff at the hotels, they might recommend the same local spot. When we’re out and about and ask locals, we often hear many of the same comments you mentioned towards SF’s Fisherman’s Wharf where the food is overpriced the quality is less than neighboring places.
More preparation is key! You learn pretty quick after getting suckered into spending huge amounts where the nearest grocery store is :)
Great article, Sam. I find it’s easier to spend a lot more on vacation once you hit critical mass, financially. Like the $8K 4 day trip to the Maldives or the recent $10K trip taken to Bali with the family followed by another $2K trip to Phuket, it’s easy to splurge. I’d say make sure you get the most out of the experience but keep it in balance with the rest of your life.
I love writing up the trip as it helps to keep the experience stored in memory and is very fun to relive the exciting details of the trip. Hope the rest of the trip is great and good on you for making more than $50k/ month. You’ll have to share what all went into the $127K of expenses for the month in the comments, I guess there are some fixed costs being included there!
Oops, didn’t mean to convey the Cash Flow chart as my income/expenses chart for the past 30 days. Just an example that’s consistent with the theme of this post on how we can aggressively blow our cash flow if not disciplined.
What did you think of the Maldives? A friend’s husband imports a lot of furniture from Malaysia there and invited us to go stay for a week. Was the diving amazing? I’ve had very mixed reviews of Bali – people loved it or hated it. What do you think? And how does it compare to Phuket?
I LOOOOOVED our stay at Taaras Resort on Pulau Redang in Malaysia. It has the most magnificent beach and cove around. Warm turquoise waters and the diving was so fun and so easy.
The Maldives were wonderful. It depends on the island and resort you stay at but some are great. We stayed at a Thai owned resort where you had to take a seaplane after overnighting in Male. All meals were included and it was a bit over $1K per night for two people. We didn’t SCUBA dive then (too bad) but the snorkeling and free diving was absolutely incredible. The only problems I had was that since it was unlimited wonderful food and drink I ate too much and drank too much so I was bloated and hung over the first two days. Well then I toned it down a lot and really enjoyed the rest of the trip.
Bali- I really like staying in Ubud. We rented a $500 per night compound / villas just outside Ubud via Airbnb and it was just wonderful. We stayed there 5 nights and then moved to Semanyak for 2 nights, in another set of villas a bit far from the beach. Ubud was far better then Semanyak in my opinion. Kuta and Nusa Dua are worth visiting but the chain 5 star hotels are less attractive than a very nice personalized villa.
Phuket is overpriced but ok for a 2 day trip.
Come through SE Asia again on the way to Bali and stop by to see us.