Close Menu
Creating Freedom Through Financial Independence


How to Travel and Enjoy Time Off Without Killing Your Savings

September 15, 2020

Travelling is something most of us enjoy.  But given the current travel restrictions, most of us won’t be able to go far from home for a while.

This is frustrating for many people.  And depending on where you are in Australia, you may not even be able to take small trips within your own state!

Bottom line:  spending up big on holidays isn’t really an option right now.  So perhaps it’s a good time to step back and think about this category of our personal finances and how it relates to Financial Independence.


Speaking of travel…

This blog post was actually delayed because we’ve been away.  We just got back from a beautiful week visiting some lovely spots in South West WA!

The coastline is gorgeous and the towns have a relaxed, positive vibe.  I especially love areas with huge forests, which then morph into coastal bush and finally, the land meets the ocean.

There were too many nice things to name, with breathtaking caves, walking trails, wildlife, forests, inlets, and of course, the odd brewery and a chocolate factory 😉  Here are some photos from our trip…

Mrs SMA also had some of that beer, I swear!  Okay, that’s enough reminiscing and story telling – let’s get into this article 😀


The Holiday Conundrum

Travel can be a pretty costly exercise.

It’s not hard for a couple to spend $20,000 on luxurious overseas holidays each year.  And some would consider that essential for a good life in the modern era.

But it only takes 25 years for this habit to have cost us $1.1 million in foregone wealth from investing (assuming 6% annual returns).  So, clearly it’s worth thinking about the trade-off!

Which begs the question:  How do we square this desire with the pursuit of early retirement?  Can we travel and enjoy our time off work without killing our savings?

Let’s break this down a little bit and discuss how we might optimise this category of spending.  I’ll also share observations from our own life over the last 10 years.


International travel is relatively new

I think we forget that it was only a few generations ago that people basically never travelled overseas for pleasure.

For most of human existence, we simply explored places that were nearby, yet somehow folks managed to live perfectly happy lives.

This seems unthinkable today, but it’s true.  Flying for the masses has only been a thing for the last 50-70 years.  (I’m talking about rich countries like Australia here, much of the world’s population still can’t afford regular overseas travel.)

As our wealth has grown in society, we’ve been able to afford more and more luxuries.  Increasing amounts of travel being one of them.  This has been helped along by technology and competition, making travel more affordable.

Now, before your outrage spills over into a keyboard-smashing outburst of hateful comments, I’m not saying you have to give up holidays and travel to reach Financial Independence!

You don’t.  But there are some very simple ways to optimise this particular area of our lives.  Let’s look at those now.


How can we optimise our cost of holidays?

— Appreciate Australia.

Spend more time locally, visiting the many beautiful places we have in our own country, which, ironically, people from all over the world come to see!

I think we tend to under-appreciate what’s in our backyard because it seems normal to us.  Amazing beaches, beautiful forests, fascinating wildlife.

You’ll often find that road trips, camping and exploring is just as much fun (if not more) as hotels and tours.  You can even rent lovely short-term accommodation and take your dog.  That’s what we do and we love it!  Our dog is family so I’d hate to leave him behind.


— Take time off for a taste of FI.

You can use your annual leave for more time at home to get a real taste for early retirement.  Whether you take off a few weeks or a few days here and there, it’s an easy way to bring more freedom into your life straight away without higher spending.

We did this while on our FI journey and I highly recommend it.  Having lots more days off throughout the year was amazing.  After all, if freedom is the ultimate goal, why not get a taste of it on a regular basis sooner?

More time off lets you recharge your batteries, take better care of yourself, catch up on things you’ve been meaning to do.  When you go back to work, you’ll be genuinely refreshed.  Sometimes travel itself can be tiring and you don’t feel like you got to properly unwind.


— Rotate between experiences.

Even if you don’t want to drop international travel, you can definitely still have a high savings rate.  Spreading those trips out more will help enormously.

Instead of an overseas holiday every year, do it every 2 or 3 years.  Even better, take turns between doing local trips, having more time off at home, and international travel.

This strategy lowers your spending (and your carbon footprint), while also getting the best of all three things:  having more free time now, enjoying the beautiful country we already live in, and then occasionally visiting other cool places too!


Running the numbers…

On top of the above benefits, there is of course a financial (and freedom) benefit to switching up our holiday strategy.  Let’s consider the difference a few tweaks can make.

Let’s assume a household spends a comfortable $10,000 per year on nice overseas holidays.  That’ll sound too high to some people, and too low for others.  But it’s just an example, so stick with me.

Maybe they decide to put their optimisation hats on since they want to retire early.  Instead of the annual overseas trip, they do the following:  over 3 years they’ll do one overseas trip costing $10,000, one local trip costing $2,000 and use their remaining leave for extra days/weeks off at their leisure.

Instead of spending $10,000 per year on holidays, the annual cost falls to $4,000.  A difference of $6,000 per year.  That’s pretty good.  Invested and assuming 6% returns, these savings compound to $100,000 in just 12 years.

But it gets better.  Thanks to the lower spending, they now need $150,000 less in investments to retire.  Remember, any annual saving has a benefit of 25x.  And considering this might be 10-15% of what they need in total to retire, this really boosts their progress!

And you could hardly argue they’re missing out.  They’ve simply modified their holidays and travel to have greater variation and more quality free time.

Granted, none of this is groundbreaking on my part.  It’s just another example of relatively small efficiencies and the Art of Moderation adding up to make a huge difference in outcomes.


Experience and meaning

Most of us are human.  As such, we like seeing new places and having positive new experiences.  Whether it’s a new restaurant that just opened up, or an exotic island on the other side of the world, these things give us great memories and a thrill from the novelty of it all.

In the 1990s and 2000s, society was hooked on material consumption.  Now, much of our focus seems to be on experience consumption. 

This is arguably healthier and more rewarding.  But it can still be a slippery slope of chasing one experience-high after another, rather than actually building a meaningful life.

Think about it.  Would you rather your life was amazing for a few weeks and moments of the year?  Or would you rather a beautifully enjoyable daily and weekly lifestyle?

I’m not saying you can’t have both.  But rationally, the one we experience more often is worthy of greater attention.  The occasional outings and highlights will form great memories.  But at the end of the day, those are only relatively small snippets of time.

That’s why I focus my energy and attention on where I spend the bulk of my existence:  everyday life.  Any additional positive experiences are a bonus on top of the enjoyment I get from each day.

Travel is yet another perk of affluence that we’ve become accustomed to.  So the secret, as with most things, is do to it in moderation.

Interestingly, we went on a few overseas trips during our FI journey, including to Africa, Bali and twice to Singapore.  These days, we only travel locally so we can take our dog with us!  And I have to say, even though seeing other countries was great, I’m actually happier spending time at home with the dog.


Longer term travel goals…

One seemingly radical option is to save travelling for later on.  I get that patience has almost gone extinct as a character trait, but this option shouldn’t be ruled out completely.

I’m not saying you shouldn’t travel or that you should stay home for the next 50 years.  But there shouldn’t be a mad rush to experience everything now either.

If you died in your sleep tonight, would you be depressed that you didn’t visit 30 countries?

If so, then it’s possible you’re searching for meaning through travel.  There are many things in life that are far more rewarding and long-lasting in our lives.

Don’t get me wrong, travel can be a meaningful experience.  But these events are short-lived and unfortunately, our memories of them do fade.  Then we’re looking towards the next exciting trip.  Doesn’t this sound eerily familiar to our relationship with shopping?

Again, I think our daily lives should be what we derive meaning from, so this area deserves more attention.

If travel is a huge passion of yours, try to go on the lower cost trips while you build up your investments.  Later, once you’ve established yourself financially, you’ll have more time and flexibility over how and when you travel.  Not only that, but you won’t be sacrificing years and years of freedom to do it.

You can take your time, do some ‘slow travel’ and really enjoy the experience.  Alternatively, we can choose to see travel as a lifetime goal instead of an immediate and fixed part of our annual spending.  This way, we’re not forgoing travel, simply changing when we do it.


Final thoughts

Having said all this, if spending up big on travel is super important to you (and it can’t wait), then okay, fair enough.  But consider the different options and how it fits with your longer term plans and goal of financial independence.

As you can see, there are numerous benefits to tweaking our approach to holidays and time off work.  Like me, you might actually find greater joy in carving out more time to enjoy everyday life.

However you choose to do it, you can definitely still enjoy some travel without killing your savings!


22 Replies to “How to Travel and Enjoy Time Off Without Killing Your Savings”

  1. Hey Dave,
    Love that you identify “experience consumption” – really resonates. We often think because it’s an experience it’s not real consumption. Great to re-think with your numbers, expanding the cost of travel to more than what we spend.

    1. Thanks Jo! Yes absolutely, ‘experiences’ seem to sneak past as if they’re not also a form of consumption…

  2. Hi Dave- another great post as always.
    One thing that FI people should look into are alternative styles of accommodation such as Home Exchanges. We have done a few both locally and internationally and they have been amazing- much better than hotels or Air BnBs. You get to link up with a local family, and typically you are not smack in the middle of tourist town so you get a better experience.
    Lots of different options, and I generally find people are more caring when you are sharing your place than something like Air BnB.
    Lots of retirees seem to use it as they obviously have more time available, but great option for families, especially with older kids that might need more than one hotel room.

    1. Cheers Trent, and excellent point! Home-stays/swaps and similar arrangements really deserves its own article! Honestly, I don’t know much in this area, but it’s something I’d definitely do in the future.

  3. There’s so much to see in Australia. Don’t worry about going abroad, enjoy what we have and boost our economy by spending your money locally, go camping sit on the beach or in the bush and enjoy our beautiful country. You might be surprised how good it is.

    1. Very true – each time I visit somewhere nice in Australia, I’m always amazed that we feel the need to go anywhere else. I get that there are different things to see in other countries, but personally the more local things we see and appreciate, my desire for international travel reduces.

  4. Australians have a great travel culture so I think it’s important for all us FIREgoers to figure out how to optimise travel. We’ve been working in the travel industry for 6 years and the best way we’ve learnt to save money is to ‘slow travel’. Instead of going to 10 countries in 10 days, do one city a week! You save in transport costs, air bnbs/hotels give discounts for longer stays, and you get to do plenty of cheap/free activities like walking tours and just relaxing and enjoying the culture! We’re true believers that you don’t need to sacrifice travel to hit FI, but I agree with you Dave that moderation is key, nobody needs business class and 5 star, just saying.

    1. Yep, slow travel is definitely the way to go I think, for a richer experience more than anything. 10 countries in 10 days almost sounds like a box-ticking achievement to say that one has been more places than the next person. I’d imagine the whole trip would feel rushed and pretty tiring!

      1. Hi Dave,
        You have raised valid points in another good post, especially the price of ‘experience consumption’.

        People who travel must ask the question ‘Why are they travelling?’ It seems most people these days are travelling (hunting) overseas for the right ‘insta’ post as a way of one up-manship over their so call ‘friends’ (audience). This is a HUGE price to pay for vanity sake, especially when costs of travelling are factored in taking the so called glorified insta post.

        I totally agree with you in regards to the travel go ‘slow mode’. I did this a few years ago, by spending a week in one city/locale you can enjoy the experience of living like a local. I feel this is the way to savoir good travel experience. Better yet travel local before jumping overseas.

        I thoroughly enjoy your blogs. Well done mate.

        1. Cheers mate, I’m glad you like the content.

          Also great to hear another vote for slow travel and local trips 🙂

  5. I am fortunate that my job has some travel. I have been able to organise on many occasion a few extra days either side of the work trip. Typically flights have been the same cost but I have just paid for the extra nights accommodation and meals. I have even paid for my partner to fly to and then spoken to the hotel that work has booked and asked how much extra for her to be added. Some places said dont worry and others have charged and extra $20 to $50 per night.
    I have found this as great way to have a holiday with a have a portion of the costs covered. This is worth considering if you have to travel as part of your job.

    1. Great suggestions there Nat, thanks for sharing. Sounds like a great way to create some mini holidays around a work trip!

  6. I started drooling when I saw the photo of you sipping craft beers… Another great read Dave. Best wishes from Lockdown Melbourne. At least our playgrounds re-opened today. It’s the nearest thing to travelling for me at the moment…
    I read an apt quote recently, might have been from you Dave or another FI Blogger; “You can do anything but not everything.” Wise words that bear reflecting on.

  7. This is one I think about a fair bit. For me, travel is something I absolutely love. While domestic travel in Australia is wonderful, I find international travel to be absolutely worth the expense. I think there is a worthwhile point though in travelling smarter, rather than harder. For instance, rather than taking taxis and tours, learning the local public transport, rather than having to eat at that michellin starred restaurant for your #instaworthy meal, enjoying the local options, and rather than staying in swanky hotels, looking at more basic stays. This goes in hand with always doing your research to avoid getting ripped off by the local scams and tourist traps.
    I do love the point about travelling to the cheaper destinations while you’re young, and then leaving the more expensive spots when you’re older and your money has spent more time compounding, which means a smaller opportunity cost to your trip. Southeast Asia is cheap as chips, Western Europe not so much.
    And finally, one thing worth noting as well is not to underestimate your own local area as a substitute for travel. Most Aussies live in our capital cities. These cities are super diverse, both from a human standpoint and a geographical standpoint. I live in Sydney. This means I can enjoy incredible neighbourhoods such as Cabramatta or Harris Park for amazing food and culture, and the next day enjoy gorgeous national parks without even having to leave the city. Hell, even jumping on a commuter train to Newcastle is a wonderful day or weekend of “travel” without too much expense.
    I’ll stop rambling now. Good article.

    1. You’re not rambling at all – fantastic comment with lots of great points! There are so many ways to approach it and to figure out the right balance of trade-offs for our own situation. Thanks for your thoughts 🙂

  8. Another way to spend less money on holidays where the plane tickets make up a lot of the cost is to do the trips less frequently but spend more time on the actual holiday. So over a three year period, instead of taking 3 holidays of 2 weeks, take 2 holidays of 3 weeks. You’re still spending as much time there, but it’s one less set of flights that you have to pay for. And given that the holidays with expensive flights are normally somewhere far away and jet lag is a factor, instead of spending half your holiday being sleep deprived it’s only a third of it! 😉

    1. Haha yes, that’s an excellent tip – hadn’t thought of that one! Sometimes you end up more tired after your holiday than before you went on it lol.

  9. With Borders closed etc I’ve seen good deals in WA for trips to the North West of WA, Staycations in Perth, or deals for WA’s South West

  10. Hey Dave, thanks for sharing. like what you said about how people seek meaning through travels which made it eerily similar to shopping. Reminds me of the hedonic treadmill.
    I was originally from Singapore and travelling out of the country for at least one big trip per year is a ritual. It’s a conversation that dominate the dinner table. Now that I’m living in Melbourne, I am happy to hang out in my suburbs or to Victoria when restrictions ease and soak it in slowly like you said. No longer running after the next big trip and taking instagram worthy photos. A mindset shift with age maybe 😉

  11. I think a better split of holiday types instead of national/international is more along the lines of cheap/fancy… Depending where you go, there are a lot of ways to travel overseas for a lot less than relatively expensive Australia travel.

    Anecdotal example, I managed to get return tickets to Argentina last year for about $270 between waiting for a good Air NZ deal and using free AMEX sign up points, and being able to fit my plans around the sale dates. Once you are in a cheap country, ‘cost of living’ is much better than here, and particularly if you aim at say private rooms in hostels instead of hotels. Not for everyone but works for me!

    Great blog mate.

    1. That’s an interesting idea Steve, I like it! I suppose going the cheap/fancy approach, the numbers take care of themselves regardless of where you go. Solid tip man, thanks for sharing.

Leave a Reply

Your email address will not be published. Required fields are marked *

See All
  • Strong Money Survey Results

    I share the findings from surveying my audience.  See how wealthy the average Strong Money reader is, how much income they earn, and find out the most common money worries.

  • The Power Of Deliberate Spending

    Why deliberate spending is my favourite money management style.  What it really means and how you can use it as your situation and priorities change over time.

Download the Free Guide

10 Steps to Financial Independence