Some indications about my income and expenditure patterns may be in order.

I save more than 50% of my salary and I earn about 5 times the minimum wage in my country. I am in my early forties.

I am not married and I don't intend to. My parents are self-sufficient financially.

I do not own a house and I don't intend to buy one either. Ditto for medical insurance. I currently live in accommodation provided by my organization.

I have zero debt and have always been like that.

I have recently developed a fancy for travel and seeing places. But then, our desires are unlimited, and money isn't. So I want to set aside a travel budget and kinda "indulge" within the budget. I can do small trips for a few years, accumulate some money and do a big trip (like foreign trip) every few years. I can increase my travel budget according to inflation or my salary increase. I am a budget traveller for the most, but once in a while, I let go and indulge.

I want to know if there is a "thumb rule" ( I am a huge fan of thumb rules) about what percentage of one's disposable income or spendable income should one set aside for travel ? Or, in general, for similar recreational activities or fun-loving activities or luxuries, in case travel is not your forte ?

For instance, I set aside 3% of my salary for charity. I have seen thumb rules for how much insurance one must have, some N times your salary etc. Apart for "whatever works for you", are there any factors I should take into consideration while setting my travel budget ? And is there a thumb rule ?

  • 7
    Disposable or discretionary income is just that. Discretionary. Spend as much as you want to on travel. Just pay the things you have to, then do whatever you want. There is no point in having money if it never gets spent, after all. However, your discretion may be to just save as much as possible, and if that makes you happy, then great! Personally, I don't think there are any rules for discretionary income, just rules for how much of your money is left over to be discretionary.
    – Dan
    Dec 3, 2015 at 23:09

5 Answers 5


Ask yourself, where do you want to go and what do you want to do?

It may be worthwhile to set out some goals, alternatives or a so-called "bucket list". This would provide more structure to your budget than a flat rate prescription.

Are your contenders the kind of thing where you might save up several years and have a big trip once or twice a decade or even once in your life (Antarctica cruise!) or more planning out annual vacations? Would you seek trips to connect to another hobby (art museums, battlefields and historical sites, wine regions, performances of any kind - opera, sports, Broadway musicals), or do you simply want to get away to the beach for a few weeks a year? Do you want 4 star hotel amenities?

The answers to these will help you figure out what and how to budget.

Bon voyage!


It's called disposable income for a reason. It's what's left after obligations, whatever bills you have, and saving. Saving half one's income is pretty much at one end of the spectrum, very few can afford this. The combination of high savings and low actual spending will enable you to retire very early if you wish.

Saving 'only' 15% might actually be out of your comfort zone, maybe 25% will keep you happy. What remains is yours to spend on what you wish, whatever makes you happy. There was a time I joked "I spent most of my money on women and beer. The rest, I wasted." Now, I don't mind travel, but it's not my passion. If traveling the world is yours, do it. Enjoy every minute of it.


I don't know of any rule of thumb for travel.

In general, what you spend on entertainment should be what you have left after paying for the more mundane things in life -- housing, food, electricity, and so on -- and setting aside reasonable amounts for retirement and emergencies.

Entertainment varies widely as a percentage of one's income. Someone making minimum wage and trying to support a sick wife and three kids probably has pretty much zero left over for entertainment. Someone who makes a million a year and has no debts might spend 50% or more of his income on entertainment.

Yes, I've heard rules of thumb for charity, housing, and retirement that are probably at least useful ballparks. But for entertainment? No, I think that's just what's left over.

  • Yes, I haven't heard thumb rule for entertainment too. I thought, having one, would help in building a bit of discipline, so that, more money could be set aside for more productive avenues like charity or savings. Travel/entertainment can become an "indulgence" thing, although it has a learning and revival value to it.
    – Whirl Mind
    Dec 6, 2015 at 8:25

As much as you want, and are otherwise comfortable with. No matter where you go or what you do, I doubt you would miss the money more than the experience. Money is just money and you can always get some more, but you can't get more time. That's my rule of thumb.


In addition top the great answers above (esp Joe Taxpayer: "if traveling is your passion, do it!) let me add my two cents:

I recommend always having TWO vacations planned. It's a wonderful way to go through life:

  1. You always have something to look forward to, even after the first vacation is over.
  2. You don't have to worry about that sad point half-way through your current vacation ("oh, it's almost over!") because you already know when the next one will be!
  3. After a vacation is over, you can have some fun planning the next-next one!
  4. "Always have two vacations" is a nice mental picture to have when saving money.

It doesn't really matter how long until the next vacation, or how expensive it will be. Just that it's planned and out there makes for extra happiness and good money management.

(Can you tell I'm in the same mindset? I love vacations.)

  • Did you mean, two vacations per year ?
    – Whirl Mind
    Dec 6, 2015 at 8:26
  • 1
    Not exactly. The time frame isn't that important. Just have two planned at any given time e.g. "I'm going to Florida this summer, and on a ski trip in the winter. Or, "Vegas in a couple months, then next year I'm going to Italy!" Weekend getaways count, too. In any case you may have more than two per year, or fewer. A lot of the joy is in the planning and anticipation!
    – Rocky
    Dec 6, 2015 at 21:00
  • Oh ok, a different approach. Should try that.
    – Whirl Mind
    Dec 7, 2015 at 8:20

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