Vacations are awesome. Getting away from everyday life to relax, recharge, and have fun is great for reducing stress and improving relationships with family and co-workers.

The average cost of a vacation for a family in the United States can vary widely depending on various factors such as destination, duration, accommodation, activities, and family size.

One of the significant expenses for a family vacation is accommodation. Depending on preferences, families may opt for budget-friendly options like motels or Airbnb rentals, which can range from $50 to $200 per night, or they may splurge on resorts or hotels, where nightly rates can soar to several hundred dollars or more.

Transportation costs also play a significant role in vacation expenses. Families may incur expenses for flights, rental cars, or fuel for road trips. Airfare for a family of four can easily exceed $1,000, while rental car fees can add several hundred dollars to the total cost.

Additionally, families need to budget for meals, entertainment, and attractions, which can vary greatly depending on the destination and the activities chosen.

But how much should you spend on vacations per year? According to GoGo Charters, a one-week vacation for a family of four can cost $7,936 in 2024.1

The sad truth? Most Americans are taking vacations they can’t afford. But with a bit of planning, you can avoid running up debt while taking vacations. Read below for tips on determining how much to spend on vacation.

Determine Your Vacation Budget

Your annual vacation budget will be determined by your unique financial capacity. Many money experts,  including Forbes, recommend following the 50-30-20 budget rule to determine your financial capacity. This budgeting approach allocates 50% of your net income to essential expenses like housing, transportation, and groceries, 30% toward discretionary expenses like vacations, leisure activities, and entertainment, and 20% toward savings and debt repayment.2 This balance can allow you to enjoy life while maintaining financial stability.

However, it’s important to consider major life expenses when setting a budget to ensure you’re allocating enough savings to your larger goals, such as saving for college, buying a home, and planning for retirement. If you’re on track to meet these targets, have an emergency fund for unexpected expenses, and don’t have to borrow money to take a vacation, you’re well on your way to enjoying a trip within your means.

Next, consider all the discretionary expenses valuable to you, and determine how much of your discretionary budget you’d like to spend toward an annual vacation. According to Pacaso, many families spend as much as 5-10% of their net annual income on a vacation—or up to a third of their discretionary budget within the 50-30-20 budget rule.3

Looking at a vacation’s average daily costs per person can help you determine how much you should spend on vacations per year. For a vacation in the United States, you can expect to spend an average of $284 per person each day, according to Budget Your Trip.

Some of the most common vacation expenses they outlined are listed below.4

Average daily cost of local transportation, per person $46
Average daily cost of a hotel room, double-occupancy $259
Average daily cost of food, per person $58
Average daily cost of activities and entertainment, per person $55


Airfare is a major part of many people’s vacation budgets. The Bureau of Transportation Statistics reported the average domestic roundtrip flight in 2023 cost around $370.5 Roundtrip flights to Europe and Asia averaged $1,100 and $1,800, respectively, according to Kiplinger. 6

Once you’ve determined the daily cost of your vacation, factored in roundtrip airfare, and decided on the duration of your trip, you can set your annual vacation budget and start saving!

To find out how much to save for vacation per month, certified financial planner Eric Simonson says it’s best to “budget throughout the year and save a monthly amount to be used on travel.” He provides the example of setting aside $300 per month in order to pay for a $3,600 vacation each year. 7

How to Save for a Vacation

Once you’ve set an annual vacation budget and determined how much to save for vacation per month, you can save in a variety of ways.

One effective tactic is to set specific savings goals. Determine the total amount needed for the vacation, including expenses like transportation, accommodation, meals, and activities. Break down this total into manageable monthly or weekly savings targets. Having a clear goal in mind can motivate you to stick to your savings plan.

Another approach is to reallocate priorities in your budget to put even more money toward your vacation fund. Analyze your spending habits and identify areas where you can cut back to allocate more funds towards your vacation savings. For example, if you usually eat out twice a week, try cutting back to once a week or even twice a month, and deposit the difference. Consider redirecting these savings into a dedicated vacation fund, ensuring that every dollar saved brings you closer to your goal.

You can create a separate savings account just for your vacation and set up automatic transfers into that account from another savings or checking account each month. Or to earn even more interest, you could open a short-term savings certificate that allows continuous deposits, such as WECU’s Stash Certificate. At WECU, members can open numerous savings accounts and savings certificates for a variety of goals. WECU is federally insured by the NCUA.

Automating your savings can be an effective way to save. Set up automatic transfers from your checking account to a separate savings account designated for your vacation fund. By automating your savings, you ensure consistency and reduce the temptation to spend the money elsewhere. Treat your vacation savings as a non-negotiable expense, just like paying bills, and prioritize it accordingly. This “set it and forget it” approach ensures that you consistently contribute to your vacation fund without having to manually transfer money each time.

Another often-overlooked way to save for a vacation is to earn extra income. Whether that means reselling items you no longer use, picking up a few extra shifts at work, or starting a side hustle, increasing your income can fast-track your vacation savings.

Finding a Vacation Destination That Fits Your Budget

Choosing a vacation destination that’s both realistic and affordable involves considering various factors to ensure an enjoyable and stress-free trip. First, assess your budget. Determine how much you can comfortably spend on transportation, accommodation, meals, and activities without straining your finances. Remember to account for unexpected expenses, as well.

Consider destinations that offer good value for money. Look for places where the cost of living is lower or where your currency exchange rate works in your favor. Additionally, consider the time of year you plan to travel. Off-peak seasons often mean lower prices for flights, accommodations, and attractions. Avoiding popular tourist destinations during peak times can save you money and provide a more authentic experience as you’ll encounter fewer crowds.

When choosing a destination, consider the activities you enjoy and seek places that offer them at reasonable prices. If you’re a nature lover, opt for destinations with free or low-cost outdoor attractions, such as national parks or hiking trails. Alternatively, if you prefer cultural experiences, look for cities with affordable museums, galleries, and historic sites. Additionally, consider destinations that offer budget-friendly accommodation options such as hostels, guesthouses, or vacation rentals.

Be flexible and open-minded in your choices. Sometimes, the most memorable vacations happen in unexpected places. By being open to exploring lesser-known destinations, you may discover hidden gems that not only fit your budget but also exceed your expectations in terms of experiences and adventures. With careful planning and research, you can find a vacation destination that offers the perfect balance of affordability and excitement.

Paying for a Vacation Shouldn’t Put you in Debt

According to a 2023 Accrue Savings survey, 20% of people say they’ve gone into debt to pay for a vacation.8 Furthermore, a 2023 Credit Karma report found that 76% of Gen Z respondents were willing to go into debt to fund summer travel and holiday vacations.9 And since according to the Consumer Financial Protection Bureau the average credit card interest rate spiked from 16.9% in 2018 to over 22% in 202310, it seems easier than ever to rack up credit card debt.

A vacation is a want, not a need. When considering how much you should spend on vacations per year, prioritize financial responsibility. Pay for your travels with allocated funds and avoid putting travel expenses on credit cards to prevent high-interest debt. Remember, your vacation should create memories, not lingering debt.

If you haven’t saved up for a vacation, you should try a staycation or find another way to spend little to no extra money. For example, explore low-cost or free activities such as visiting parks, museums, and local attractions, attending community events, and organizing potluck dinners or movie nights with friends and family.

Tips for Affordable Travel

When you’ve been working hard for many months it’s easy to feel like you deserve a vacation. If you’re lucky enough to get paid time off through your employer, that’s true! Unfortunately, most employers’ fringe benefit plans don’t come with all-expense paid trips.

Making travel more affordable requires strategic planning and savvy decision-making. Start by being flexible with your travel dates to take advantage of off-peak seasons and lower prices, and research average prices to ensure you’re choosing a realistic and affordable destination for your budget.

Beyond that, here are some additional tips for affordable travel.

  • Look for budget-friendly accommodation options such as hostels, guesthouses, or vacation rentals instead of luxury hotels. You could even rent out your home while you’re away to earn extra money or explore the option of a housing swap to save on accommodations.
  • Consider alternative transportation methods like buses, trains, or carpooling to save on travel costs.
  • If your accommodation includes a kitchen, consider preparing some of your own meals instead of dining out every day.
  • Research and prioritize free or low-cost activities and attractions at your destination to make the most of your travel budget.

By incorporating these tips into your travel plans and determining how much to save for vacation per month, you can enjoy memorable experiences without breaking the bank.

Local Vacations

It’s easy to rationalize spending money. While vacations to Mexico or Hawaii are lovely, it’s important to remember that relaxation isn’t always better when you’re further away. Your ability to relax or bond with your family is just as likely in Canada or the Washington Coast as it is in a more exotic locale. And since air travel is one of the biggest vacation expenses, staying local can go a long way toward your bottom line.

Avoid Special Occasion Spending

The trap of special occasion spending is most dangerous when you’ve already left on vacation. When we’re on vacation, we allow ourselves to justify extra purchases. Especially when traveling, this can be coupled with the idea, “while we’re here, we might as well experience it to its fullest.”

Avoid Present Bias

Saying yes to spending money on a vacation means saying “no” to other places that money could go. It’s easy for us to put a higher value on what’s right in front of us, rather than considering the value of a longer-term investment.

This is called “present bias.”

Before finalizing your vacation plans, consider if allocating funds elsewhere would be a better long-term financial decision. For example, instead of spending $8,000 on a trip to Europe, consider putting $6,000 in your retirement account and taking a $2,000 trip to Eastern Washington. If that $6,000 retirement contribution earned you an 8.00% Annual Percentage Yield in dividends for 25 years, it would compound into $41,000!

Shop for Travel Deals

Planning ahead and shopping for travel deals can significantly reduce the cost of your vacation while maximizing your travel budget. By researching and booking flights and accommodations in advance, you can take advantage of early bird discounts and promotional offers.

While we don’t advocate funding your vacation with a credit card, utilizing credit card points or rewards to offset travel expenses can pay off. Many credit cards offer travel rewards programs that allow you to earn points or miles for everyday purchases, which can be redeemed for flights, hotel stays, or other travel perks.

Setting up price alerts for flights can also help you snag the best deals. Websites and apps allow you to monitor fluctuations in airfare prices and receive notifications when prices drop, allowing you to book flights at the cheapest times.

Proactive planning and strategic use of rewards can turn your travel dreams into reality without overspending. By considering how much to save for vacation per month towards your annual vacation budget and leveraging travel deals and rewards programs, you can enjoy unforgettable experiences while staying within your financial means.

Avoid the Vacation Hangover by Planning Well

Too often when we come back from vacation, we pull up our bank or credit card statements and kick ourselves for overspending. Avoid the vacation hangover by planning well, resisting the temptation to overspend, and making decisions to stay within a budget.



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