According to a recent survey, the average American spends around $1,200 on their summer vacation. But how much do they actually save up for this annual getaway? Let’s take a closer look.
How Much Should You Save?
Your savings goal for vacation largely depends on where you plan to go and what you want to do while you’re there. If you’re planning an all-inclusive resort stay in the Caribbean, your expenses will be significantly higher than if you’re driving a few hours away for a camping trip.
However, as a general rule of thumb, it’s recommended that you aim to save at least 10% of your annual income for vacation. So if you make $50,000 per year, that means saving $5,000 for your yearly trip.
How Much Do People Actually Save?
Unfortunately, most Americans aren’t hitting that 10% savings goal. According to a survey by Bankrate.com:
- Only 39% of Americans are able to afford an unexpected expense of $1,000 or more
- 28% have no emergency savings at all
- Only 16% save more than 15% of their income for retirement
So where does vacation savings fit into this picture? The same survey found that only 24% of Americans are saving specifically for their vacations.
Tips for Saving Up
If you’re part of the majority who struggles to save up for vacations, don’t worry – there are steps you can take to make it easier:
- Create a budget: Determine how much money you need to save and create a plan to reach that goal.
- Avoid unnecessary expenses: Cut back on non-essential spending to free up more money for your vacation fund.
- Automate your savings: Set up automatic transfers from your checking to your savings account each month.
- Consider a side hustle: Look for ways to earn extra income, such as freelancing or selling items you no longer need.
The Bottom Line
While the average American spends $1,200 on their summer vacation, not everyone is saving enough to make that trip a reality. By setting a savings goal and following these tips, you can make sure you’re able to enjoy your time off without breaking the bank.
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