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How much should I spend a year on travel?
With summer travel starting up, it’s the perfect time to consider how much to budget for upcoming trips.
While there isn’t a rule for how much to spend on travel each year, there are ways to figure out a target that works for you.
Start with the 50/30/20 budget. With this approach, 50% of monthly your take-home pay goes toward needs, 30% goes toward wants and 20% goes toward savings and debt payments beyond the minimums.
Travel spending comes out of the 30% designated for wants.
Say your take-home pay is $5,000 per month. Applying the 50/30/20 method would leave $1,5000 a month for wants. That may include spending on entertainment, restaurant meals, personal care splurges and, of course, travel.
You might decide it makes sense to put about one-quarter of your wants allocation toward travel. That would amount to $4,500 a year.
You can stretch your travel budget further by maximizing credit card rewards, using points to pay for airline tickets and comparison shopping for hotel and airfare deals.