In 2009, Meg Schmitz went on what’s still the best vacation of her life. She and her husband spent 14 days in China, where they visited Shanghai. They also traveled to Mongolia and saw the Dalai Lama’s old summer home in Tibet, among other things. That itinerary involved a number of flights, since the sites Schmitz wanted to see were so spread out. The trip was a pricey one, with about 90 percent of Schmitz’s budget going toward transportation and accommodations.
As memorable as that trip was for the 55-year-old Schmitz, a Chicago native, she’s taken plenty of other great vacations, including a recent getaway to South Africa, and will take many more in the future. This year, she’s already been to Austin, Raleigh, Durham, Nashville, New York City and Portland, Ore. While she likes to travel comfortably, she also tries to spend wisely, looking for discounts on deal sites and for deals through her credit card company.
Still, no matter the trip, most of her money goes toward flights and lodging. “At my age, we put a lot more of our budgeting dollars toward [transportation] and hotels,” she said. “Then we do the other things, the culture and the food, by the seat of our pants.”
The data says that Schmitz travels like the rest of us. According to ValuePenguin, a website that tracks consumer spending, a typical U.S. family spends about 44 percent of its travel funds on transportation and about 26 percent on hotels.
Those two expenses will always take the biggest bite out of a vacation budget. “There’s not much you can do about these fixed expenses,” said Jeff Cutter, founder and president of Falmouth, Mass.-based Cutter Financial Group, adding that he, too, finds that people spend between 65 and 70 percent of their travel dollars on hotels and transportation collectively.
The Rising Cost Of Travel
Numbers can vary wildly, of course, but ValuePenguin found that a person will spend, on average, $144 a day during a four-night trip within the United States. That jumps to $271 dollars per day for a 12-day international trip. If the average domestic four-day trip costs $581, then $224 of that goes to transportation, $150 to lodging, $155 to food and alcohol, and $52 to entertainment.
While some of those figures may seem low, Divya Sangam, a spokesperson for ValuePenguin, says that these numbers are based on a single person. In addition, the average takes into account people who don’t spend money on vacation at all and people who take trips and don’t pay for lodging because they stay at others’ homes.
If you calculate the figures based on the size of the average American household, which was 2.54 people in 2017, says Sangam, then the price of a four-day domestic trip is closer to $1,475.
In any case, the numbers have gone up over the years. “Costs have risen in the past decade,” ValuePenguin’s site reports. “The cost of a domestic vacation,” – defined as a four-day trip within the U.S. – “was less than $500 back in 2005 (or $1,270 for a family).” The total average cost of international travel has also increased, from $2,000 per person for a 12-day trip in 2005 to $3,251 today. (That’s an average number, which could include someone paying $200 for a hop across the border to Canada – or $2,000 for a flight to Australia.)
While ValuePenguin doesn’t break out what component of travel has risen the most in price over those years, other stats indicate that everything from gas to flights to food has grown more expensive. According to Statista, a gallon of gas cost $2.27 in 2005 – whereas the average gas price, according to AAA, is $2.84 per gallon today. Airline fares increased by 13.5 percent between 2005 and 2018, while U.S. food prices have jumped by 32.48 percent, according to the Official Data Foundation.
When it comes to trip-related spending, the biggest cost variables are food and alcohol. Cutter recommends budgeting about $250 a day for food and drink, but you can plan on spending less if you’re going to a country with lower costs or a better exchange rate. Alcohol, in particular, can get pricey.
In many cases, alcohol isn’t factored into the budget, since it’s hard to know just how much you’ll end up spending on drinks. In any case, such spending varies significantly from person to person.
Schmitz spends about $200 a day on food and beverages when she’s traveling. “Lunch is with wine, and dinner is with wine,” she said.
Spending On Sightseeing
While eating out can provide entertainment on its own, most travelers do spend at least some money experiencing the local culture. Schmitz loves to visit art galleries and museums – and she often visits free museums associated with universities. “Any city with a university and an endowment has an art collection,” she noted.
Others will pay up to play golf, attend sporting events or see a play. ValuePenguin says that, on average, people spend about $640 a year on “participant sports,” including golf, fishing and biking, while on vacation. They’ll also spend an average of $541 on movies and other events that require admission. In total, people spend about 9 percent of their vacation dollars on entertainment.
“Different destinations can require a wide range of entertainment fees,” according to ValuePenguin’s vacation study. “Some beaches are absolutely free for families who want to sit, sun and swim all day long, making them great summer vacation spots. Museum tickets can cost from zero to upwards of twenty-five dollars.”
It’s Better To Budget
Many people take trips without budgeting. But having a plan will make your excursion that much more enjoyable, Cutter advises, since allocating it in advance means you may not feel guilty about the money you’re spending or run the risk of overspending too much. And he has a practical planning tip: add 20 percent to your budget. On all the trips he’s taken, he’s spent exactly his budget plus that additional 20 percent. Same with his clients, he said.
It’s also important to do your homework. It is possible to find good deals without sacrificing quality, according to Schmitz. She uses programs such as the restaurant booking app Open Table to find inexpensive five-star restaurants, or hotel aggregation apps that sometimes offer rooms at a discount. There are also Airbnb and Home Away, which can offer cheaper places for rent.
She also makes use of hotel concierges.
“Talk to them,” she said. “They can help you with your travel and tell you where to go – that’s what they’re there for.”
When it comes to actually paying for vacations, Cutter recommends setting cash aside throughout the year, and credit cards can cover smaller expected costs, too.
If you’re taking a trip that costs thousands of dollars and you don’t have the funds up front, a personal loan may help. You can borrow a sum of money from a loan provider, set a repayment period (such as from three to seven years), and then pay the loan back at a fixed and relatively low interest rate, depending on your credit history, with fixed monthly payments.
In addition, a personal loan can be a good alternative to a travel card. It can make more sense to convert cash from the loan into local currency and use it to pay for things and be off the hook for international fees. And because personal loans have a fixed rate and a set payoff date, you’ll know what you owe every month and when you can finish paying off that loan. This can help with budgeting.
As long as you can cover the loan, this option is a good one for those who want to take an overseas trip, a family vacation or a substantial trip through the U.S.
In addition, using loans to help consolidate other debt can ease the sting of vacation spending. If you accumulate higher-interest debt from your trip, consider using a personal loan to consolidate that debt – along with any other outstanding debts – under a lower-rate loan when you return. By putting all of your higher-interest debt in one place, you’ll be able to pay it off faster and at a lower rate than if you paid down each credit card balance individually.
Schmitz’s next adventure? She’s going to Orange County, Calif. in a few weeks and then back to North Carolina, which, she says, is one of her favorite places to visit.
“We go down at least once a year and go to Beaufort and look at the whales,” she said. “That one’s coming up.”
Read the full article on Forbes.com.