Holidays are one of the most anticipated moments of the year, but they are often planned with a short-term vision , without taking into account the financial impact it will have on finances during the rest of the year.
Financial Trainer José Luis Díaz warned in Men’s Health about a common problem: many people enjoy their vacations on credit, assuming loans that then take months and even years to pay off. This creates a financial burden that destabilizes the annual budget and can turn today’s rest into a source of anxiety from September.
To avoid this situation, Díaz emphasizes the importance of integrating holidays into annual financial planning. “Planning a specific vacation budget is fundamental in good personal financial management,” said the expert.
Vacations as a Fixed Expense
Rest and disconnection are essential to maintain physical and mental well-being throughout the year, and vacations are the best opportunity to achieve this. Therefore, Díaz proposes to banish the idea of holidays as a luxury or a whim and begin to consider them as an annual fixed expense necessary for our well-being, on par with mortgage payments, utility bills, or groceries.
The finance expert maintains that the mistake lies in considering holidays as an occasional expense or a reward earned after the trip. By transforming it into a fixed expense, the cost can be distributed throughout the year, reducing the need to borrow and allowing “enjoyment without guilt because you already have the allocated funds”.
This mental shift facilitates anticipation of spending and brings financial tranquility. According to Díaz, “my recommendation is that you dedicate between 5-10% of your annual income to vacation funds, depending on your priorities and financial situation.” In concrete terms, “if you earn 30,000 euros a year, allocating 1,500-3,000 euros for vacations is reasonable.”
The financial experts of Singular Bank also advocate for this 10% savings percentage, adding an alternative proposal to calculate vacation savings.
After subtracting all fixed or variable expenses from the monthly salary, the amount available for savings becomes clear. It’s not recommended to allocate more than 60% of monthly savings capacity to vacations.
In other words, if after discounting all expenses of that month (mortgage, utility bills, groceries, etc.), you have 300 euros left, you should allocate 180 euros for your vacation. The remaining 120 euros should be kept as savings or for unforeseen events.
Dedicate a Percentage of the Annual Salary
The issue is clear: the lack of foresight in planning vacations makes more people borrow each year to “enjoy” their time off. According to data from the Bank of Spain, the first quarter of 2025 saw a 14% increase in the application for consumer loans, revealing the need for Spaniards to resort to loans to finance vacations.
Additionally, this need for extra financing can lead to errors such as financing vacations with credit cards. Given that interest rates on these credit systems can reach up to 18%, this type of indebtedness to finance a few weeks of rest becomes too costly and detrimental to future financial health.
Viewing vacations as a fixed expense allows you to plan savings by setting aside a certain amount of money monthly just like you reserve it for the mortgage. The expert recommends not defining a fixed monthly amount but rather a percentage of your income. This way, if your income fluctuates, your savings will as well, aligning your economic reality with your vacation budget.
With proper planning, your finances will dictate the realistic budget for the holidays you can afford, preventing the “I deserve it” mentality from pushing you into unnecessary financial strain.
Financial advisor Javier Linares concurs with this strategy but avoids giving a specific percentage since each personal situation differs. He suggests creating a budget with all monthly income and expenses, allowing you to determine the percentage of savings that can be set aside for holidays. “It is necessary to know your expenses and income to save effectively,” says Linares.
Create Automatic Savings Habits: “Pay Yourself First”
James Clear, author of the bestseller ‘Atomic Habits’, asserts that depending on willpower alone is a misguided approach to financial success.
This is why Díaz recommends eliminating internal negotiation through a proven method: automate savings. “As soon as you receive your paycheck, automatically transfer 5-10% to a separate account that is not easily accessible,” he advises.
This way, savings become a routine within your financial life, making it easier to adhere to the “pay yourself first” philosophy, ensuring that this savings percentage is no longer part of your general spending money.
Alfred Giralt, a financial advisor, emphasizes that this strategy prioritizes savings and helps direct income towards specific financial goals. “While adopting the ‘pay yourself first’ mentality can be challenging, the benefits to financial security and stress reduction are significant and lasting,” Giralt comments.
By following this strategy, financial stress reduces significantly. “Saving should become as integral to your financial life as breathing; it shouldn’t be something you do ‘if there’s money left over,’ but rather something you commit to for a peaceful and liberated financial existence,” Díaz describes. The key to this approach is to create savings systems that function independently of constant reminders or negotiations.
Planning and saving comprise only two aspects of this process; controlling expenses during vacations is equally vital. Again, Díaz urges individuals to abstain from justifying overspending with the mantra “I deserve it” while enjoying their holidays and to adhere strictly to their initial budget to maintain financial stability after the trip.
Díaz recommends using technology tools that simplify budgeting without creating stress. Monitoring expenses during vacations helps ensure enjoyment without financial anxiety, allowing you to return home without debt-related worries. Maintaining discipline before, during, and after the trip is key for vacations to serve as genuine mental and economic relief.
The emphasis on planning and saving empowers individuals to take control over their finances, ensuring holidays can be enjoyed without the weight of financial strain hanging over their heads.