You're probably underestimating your vacation budget

We’re coming to the end of summer and I hope many of you were able to travel before fall arrives.

In my practice, we focus a lot on detailed cash flow, but there are always a number of cash flow items I find clients severely underestimate. Usually they underestimate insurance costs, saving for short-term reserves like home maintenance, vehicles, and as-needed services. Almost without fail, another area that is often severely underestimated is the vacation budget.

Before I get into that, I’m a big believer that you need vacations not just to relax, but also to recharge. There’s ample evidence that vacation and break time not only recharges you, but boosts creativity, inspires new ideas, and increases morale and appreciation for your “normal life.” If it were up to me, vacations would be a fixed expense, not variable.

Here's an common — although slightly embellished — scenario that exemplifies the conversation when I ask clients about their vacation budget, whether they’re retired, empty nesters, or a full family:

Pretend Client: “Yeah, we try to take three to four weeks of vacation a year — one trip in Wisconsin and one somewhere around the country like Disney World, Napa, or Yellowstone Park, and then a few half weeks here and there.”

Me: “Wonderful! What do you think you spend on that?”

Pretend Client: “Oh, about $5,000 to $10,000 a year total.”

Me (thinking in my head): “Hmmm … no way.”

Me (in real life): “Hmmm … that sounds light. Take me through that.”

We have the discussion and we quickly find that they were generally accounting for just the following: air fare or gasoline, hotel, meals, and entertainment like tickets or experiences. That’s about it, which makes sense, but often misses half the costs.

Here’s a suggested budget for your trips per person or per subject with various ranges:

  • Car rental: $30–$100 per day, plus gas, and possibly insurance if you are not covered by your own auto or credit card insurance. I personally use Hertz Gold plus AAA Wisconsin. That alone regularly saves me at least 10%, plus I don’t have to wait for a car. I also double-check rates on cars every two weeks until we leave. I consistently cut my original booking rate down by at least 30%. For example, say I booked a trip now for winter and my one-week rate was $600. By November, I might find the same car for $350.
  • Car (personal): It’s not just gas; it’s also the cost of staying at an additional hotel on the way to your destination, if necessary, and wear and tear. AAA and other websites offer insight on this. It is not uncommon to find that after wear and tear and an extra hotel stay, using your own car may not be that huge of a savings.
  • Fuel: $50–$150 per week once you actually arrive at your destination, depending on where you are going. We do national park trips often and we’re easily putting 500–1,000 miles on the car over a span of one to two weeks.
  • Parking/cab/Uber: You have to get to the airport somehow. If you cab or Uber it, you’re still looking at $20–$75. If you park, assume $8–$25 per day, depending on the airport.
  • Air fare: This is all over the place, but my general experience flying out of Madison, Milwaukee, or Chicago is a range of $250–$600 per person to go anywhere in the U.S. This does not include upgraded seats. This also doesn’t include baggage fees, which could be upward of $60 per person.
  • Hotel/vacation rental: Again, rates are all over the place. I generally see $750–$5,000 per week depending on where and when.
  • Trip insurance: Sometimes this makes sense, especially in the case of cruises. However, trip insurance can run you upward of 5%–10% of the trip costs. Clark Howard has the best advice on trip insurance.
  • Food (groceries): Some folks buy groceries on trips. If we travel and rent a house, we stock up on groceries as if we were home. Our typical one-week grocery bill is about $50–$75 per person.
  • Food (dining): In addition to groceries, it’s not uncommon to eat out at least a few times, if not every single day. Typically that can run $10–$100 per person, per meal.
  • Entertainment: Again, all over the place. Here are some examples — tickets to Disney World, $50–$100 per person, per day; fishing guides, $300–$750 per day; and rounds of golf $50–$450. There are also park passes, fishing licenses, etc.
  • Babysitters: Sometimes when we travel, my wife and I do date nights. Babysitters on vacations are sometimes free and sometimes about the same rate as you’d pay here. Budget $50–$100 per date night.
  • Pets: Do you have pets? Unless you have someone who takes care of them for you, you have to board them or get a house sitter. Budget $30–$100 per day.
  • Stuff: This includes souvenirs, as well as things you just need to buy in advance like sunscreen, beach toys, or whatever. Assume 3%–5% of the total trip costs.
  • Miscellaneous: Any other things that pop up that you may or may not have planned for. Again, assume 3% of the trip costs.



Finally, below is my working table that you’re free use to keep track of your own vacation expenses:

Expense Amount Notes
Air fare    


There you have it. It’s not unusual to see that $5,000–$10,000 get eaten up quickly, often with just one trip, so I hope this list is helpful for the next time you plan your own escape.

MICHAEL DUBIS is a fee-only CERTIFIED FINANCIAL PLANNER™ and president of Michael A. Dubis Financial Planning, LLC. He previously served as lecturer at the University of Wisconsin Business School James A. Graaskamp Center for Real Estate. Mike can be reached at


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