People who go on vacation are less stressed than those that don’t, according to the Brain & Behavior Research Foundation.
Since the pandemic began, Americans have added close to $4 trillion to their savings.
If you’re lucky enough to have saved more cash than usual over the past couple of years, now is the time to think about using it on a great vacation abroad.
But just how much can you expect your next vacation to cost?
The Federal Reserve Bank of Kansas City reports that personal savings increased from 7.2% in December 2019 to 33.7% in April 2020.
By April 2021, people had an average of 32.2% of their salary leftover, which could be put into savings.
Americans also added to their savings throughout the pandemic due to having to cancel their travel plans.
In 2020, 48% of people scrapped their summer vacation plans, states Value Penguin.
This means they were able to reclaim any deposit they’d already put down, as well as save the money they were going to spend on their trip.
spending on vacation
The average cost of a 12-night international vacation is $3,251.
As a general rule, you should put aside 15% of your gross income for vacations and other fun activities.
This means if you earn the average American salary of $53,490, you’d save just over $8,000 of your earnings.
Splash out on two vacations in a year and you’d still have around $1,500 in your savings account.
Leftover money from your vacations can be used to pay off some of the more practical things in your life. If you’ve got a home loan, make a lump sum payment.
This will shorten the length of your loan and reduce the amount you pay in interest.
Another option is to pay off a high-interest debt, such as a credit card.
But before you spend all your remaining vacation fund on these things, make sure you've got enough set aside for any sudden vacation expenses you hadn't thought of, such as hotel city taxes, excess baggage fees, and tipping costs.
budgeting for future vacations
Vacation costs have gone up considerably over the past year.
CBS News says that this summer airfares increased by as much as 10% per week.
Supply and demand also means essential parts of your vacation have gone up, such as hotel bookings and rental car costs.
HuffPost reports that people are wanting and are booking bigger vacations to more lavish destinations.
They’re also spending twice as much as they did before.
You can stay within budget by reconsidering your destination.
Choose when you travel wisely too.
Vacations are typically cheaper outside of school breaks and the holidays.
Fall and winter usually give the best prices, especially when booking airfare.
So many people have been able to save more cash than normal recently.
Use this money on a vacation and you'll benefit from less stress and a well-deserved break away!