Is There a Recommended Vacation Percentage?

by | Mar. 29, 2010


Dear Dave,

Should you skip vacations when you're getting out of debt? Also, once you're debt-free, is there a rule as to what percentage of your income you should use on vacations?


Dear Carl,

I think you should put vacations on hold while you're trying to get out of debt. My family and I didn't go on vacation for nearly 10 years while we were getting out of debt. Why? Because we had work to do! We had bills to pay and kids to feed. That's just the way it goes sometimes.

I'm not sure that there's a specific percentage involved on vacation spending. It definitely shouldn't damage your financial foundation, or put you back into debt once you've worked your way out. You don't touch your emergency fund to go on vacation, and you don't stop funding your retirement or saving money so the kids can go to college. You just save up, and pay cash!

In most cases, this kind of plan will almost force your vacation spending to be a reasonable percentage of your income.


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