With Memorial Day weekend marking our unofficial start to the summer season, many of us find ourselves planning to make the most out of our summer by enjoying time at the pool, backyard barbeques, outdoor weddings, and summer vacations. With all this on our mind, your clients might be asking you “What is reasonable amount to spend on vacations this summer?”
According to the latest American Express Spending & Savings Tracker survey, 6 out of 10 Americans included in the survey are making plans to include at least one vacation this summer, and plan to spend an average of about $1,200 per person. 3 out of 4 people are planning for an average of two vacations that will last a week or longer.
How people intend to pay for their vacation is also part of the survey indicating 7 out of 10 plan to pay using cash or savings, and less than 2 out of 10 plan to pay with a credit card and pay off the balance overtime.
If you look at the median household income of Americans, which is about $50,000, and household size of about 2.5 people, spending on summer vacation takes up 6% of yearly earnings. An affluent population (defined as having household income of $100,000 or higher) was also included as a separate segment from the general population, and the survey results indicate the affluent group plan to spend closer to $2,000 per person on summer vacation. Using the same 2.5 people for the household size, summer vacation spending amounts to 5% of yearly earnings.
This might not help you as a financial planner answer the question, how much a client should spend on vacation, but it certainly provides a good inside view of how much the typical American is planning to spend. Armed with this information, you can help your clients determine if this amount of spending is reasonable given their financial situation.
View the full results of the American Express May Spending & Savings Tracker:
Summer Travelers Seek Vacations With Substance
American Express May Spending & Savings Tracker
May 9, 2012