I want to shout it from the rooftops: I just got back from vacation! Even as someone who loves to travel, taking a vacation feels like a major accomplishment. And as someone whose money script is a little (ok, a lot) more on the vigilant side, successfully saving for vacation feels even more important.

I cannot emphasize how important it is to your finances to take a vacation. I know it seems counterintuitive. But research shows that it’s true.

The benefits of being in a new environment—experiencing different restaurants, stores, and scenery, even if it’s not so far away—has a profound effect on your mental well being, productivity, and creativity. All of which will benefit your financial well-being.

In fact, a research study from the U.S. Travel Association and Project: Time Off showed that employees who took more than 10 of their vacation days had a 65.4% chance of receiving a raise or a bonus. 

Given those odds, why then is it so hard to take time off? And how can we plan for travel and downtime while feeling secure?

The reasons we say “no” to PTO are embedded in our (North American) culture. One of the biggest reasons is: fear. Fear of making our bosses angry, fear of losing out on promotions, fear of there being just too much work for us to leave. In fact, a 2018 report by West Monroe Partners found that just over 50% of employees were uncomfortable asking for time-off during the holidays. The time we are most definitely supposed to be off! 

Think of it this way: If you get 10 paid vacation days a year and only take five, you’ve essentially done the remaining five days of work for free. 

We know that fear can stand in our way of taking a vacation, so how do we conquer it? Well, the only way around is through … planning!

The Power of Planning Ahead 

Planning out your yearly travel, financially and otherwise, is a crucial part of having a vacation that actually feels like a vacation. Picture yourself on a sandy beach thinking about how much money it costs to be there. Doesn’t sound very relaxing, does it?

First, ask yourself how you like to travel. By car? By plane? Coach? First-class? Spending on fancier hotels/Airbnbs or camping? Lots of dining out or picnicking?  

When you envision what your ideal vacation looks like, you can plan for a dollar amount. Then aim to save that amount each month into an account. Having a separate account just for travel can help make it easier. And, of course, don’t forget to automate.

This will allow a balance to build up and then be available as you make concrete plans to travel.

I want to stress that planning ahead makes travel a realistic goal. The cost of travel is a top deterrent for planners and non-planners alike. However, planners are more likely to go on a trip they planned, have a better time on it, and be happier as a result.

The Practicalities of Saving for Vacation and Time Off

While the experiential benefits of vacation are apparent, saving for time off is just plain practical.

For example, imagine spending $10k a year on travel. That means you need to save $800 to $850 a month to meet that goal. 

What you don’t want is to feel stretched or stressed out when you’re on vacation. Fearing that you’ll have a big credit card bill waiting at home would kill off any vacation-going motivation.

When you save for travel year-round, you have the security of knowing you have the cash flow to support a trip. This way, you don’t feel like you’re draining funds when you actually do get on a plane.

If you end up not using the money that month, you can choose to do something else with it. Although, I would still advocate for spending it on your precious downtime! If you skip a few months, you have even more cash to put toward a big trip.

And don’t forget, spending on experiences is a terrific way to build happiness (Read: Happy Money: The Science of Happier Spending)

Now, this formula applies to the standard full-time employee. But what if you’re an entrepreneur who sets their own schedule? If this is the case, plan for a certain number of weeks off each year (and stick to it!). Then figure out how much you need to earn to make up for it—while still feeling comfortable.

Are money scripts getting in the way of travel?

Like I talked about in my last post, money scripts have a direct impact on your life. This includes travel. 

I know part of my own money script history was feeling guilty about spending money on travel. Somewhere along the way, I ended up believing that I shouldn’t spend money on myself. 

What are your scripts and money beliefs telling you about travel? Do you have any money stuff that comes up when considering taking time off to rest and travel? Are you feeling overworked and like you can’t afford to take some time off to recharge? Or do you feel like spending money on a great experience and some rest is wasteful?

Whatever the reason, travel and time off is an important way to boost your financial health. Your ideal trip won’t look the same as your colleagues’. And that’s ok. If you spend time planning ahead, you’ll get the most out of your own vision of rest and relaxation while giving you and your bank account peace of mind.

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