Episode #107: Guilt-free travel: How to plan, save, and spend on amazing vacations

Jack and Christina were a perfect example of how not to travel—racking up credit card debt, booking late on a whim, and without emotional buy-in from one partner. In this deep dive episode, I go A to Z on how to plan, save, book, and enjoy vacation experiences the Rich Life way.

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Show Transcript

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[00:00:00] Ramit: Have you ever wondered how to plan a dream vacation, how much it costs, what types of activities you can do, what types of upgrades you get? I want to talk about it today on today’s episode because so many of you have asked about travel. And a lot of the couples that I speak to on this show decide that part of their rich life is spending money on traveling. So I got a bunch of questions from you on social media. 

[00:01:19] Today, I’m going to cover, how do I come up with the ideas for where to travel? How do I think about hotels? How many activities do I pack in? What are some of the most magical experiences that I’ve had? And also, yes, we will talk about money. Let’s get into it.

[00:01:38] First question, when do you start planning, and how do you plan for a trip? 

[00:01:43] Okay. For the big ones, these would be things like a honeymoon, or in our case, we do a big annual trip every year. I would plan about 12 to 15 months ahead. What does that mean? It means the time block that we want to go, I am going to make sure that we can go, that we block it off in the calendar, that any meetings are rescheduled. And it also means that I’m thinking about things like weather. I’m thinking about things like, do we need to be somewhere else at a certain point?

[00:02:17] I don’t want to leave this stuff up to chance because a rich life is never an accident. It’s never like you trip and fall and suddenly take a magical three-week trip. No. It takes a lot of planning. So I plan ahead. Furthermore, some of this stuff gets booked up. Some stuff already gets booked up over a year ahead. Places like certain safaris, they’re already booked up, so I want to be thinking ahead. I don’t always book everything 18 months out, but I’m looking, I’m planning, I’m talking to my wife. If we’re getting other people involved, we’re starting to say, hey, these are the dates we’re thinking of. Are you able to make it? Etc.

[00:02:53] All right. How do I pick the places to go? Well, this is one area of life that I would actually consider myself pretty intuitive. And for me, this is unusual. In most parts of life, I’m pretty linear. I like to write things down. I compare it. But for me, traveling is a lot about what do I feel like? Um, do I feel like a beach retreat, a busy city adventure? Do we feel like being outdoors? These are the kinds of questions. It’s a lot of feeling.

[00:03:22] Of course, I check with my wife or if we’re traveling with friends, we might ask, but it’s really about what are we feeling. Often we’ll do something that’s very contrasty. For example, we were in Japan, very calm. And then we went to India, the opposite of calm. And we love that contradiction. 

[00:03:44] Sometimes we’ll do super luxurious, and then we’ll do very gritty. We love that combination as well. So that’s how I start, uh, thinking about it. And from a geographic perspective, I know nothing about geography, so I write down all these different places, and then I plot them on a map, and I’m like, oh, that’s over there? I had no idea. So that also, uh, helps narrow down where we decide to go.

[00:04:09] Next question. Do you use a travel agent? 

[00:04:12] Yes, always. I know this seems like something people used to use in the ’80s. Uh, nowadays, they’re called travel agents or travel advisors, and I use a travel advisor in two different ways. Sometimes it’s big blue sky. I’ll call them up. I’ll say, we’re thinking of taking a six-week trip.  This is the, uh, style we want to do. We want adventure. We want to end on calm, etc. Maybe we’re bringing family of different ages. Here’s some ideas I have in mind. Can you come back to us with some options? And they will help us sketch it out.

[00:04:46] This is the type of full-featured firm that we used for our honeymoon, which was in multiple different countries and continents over six weeks. That needed a lot of logistical support. On the other hand, sometimes I know exactly where we want to go. We want to go to this place on these dates, and we want to stay at this hotel. Can you arrange it for us? So we have a different travel advisor that we’ll use in a much more surgical fashion. 

[00:05:10] Why do I use a travel advisor? First, they handle a lot of the logistics, like booking hotels, things like that. Second, you get perks. So they’ll upgrade you. Your room will automatically get upgraded. On a recent vacation I took, uh, our travel advisor managed to get us triple upgraded, which was amazing. The room would’ve been way more expensive if we had paid for it out of pocket. We only paid for the base rate. You’ll also get things like, uh, free breakfast, which is handy when you’re traveling. Sometimes free airport transfer, etc. So yeah, we use a travel advisor, and I’m a big fan of them.

[00:05:48] How do you ball out on a budget? 

[00:05:50] Um, well, I don’t know about the budget part. For that, I would recommend checking out my friend Chris Hutchin’s podcast, All the Hacks. He does an awesome job talking about traveling, miles, etc. Chris is awesome. He knows all about that. But I will tell you how to spend a lot of money to create a dream trip.

[00:06:10] And I’ve done this in a few different ways. Some of it was our honeymoon. Some of it was recently. I had my 40th birthday, and my dream was to bring a bunch of friends and family to a resort. I planned everything. I said, “All you have to do is just show up.” And everything was taken care of. I covered it all. That was my dream. To bring my loved ones together and spend a bunch of time just hanging out, doing a cooking class, etc.

[00:06:36] I got a question from somebody in our money coaching group. If you’re interested in that, you can join at iwt.com/moneycoaching. And they said, “I want to spend a little bit more. I want to take this dream trip. What should I do?” And I think the extent to which they had thought about it was something like, I want to upgrade our flights. Okay, that’s great. You can arrive there being refreshed, etc. But it felt like they were thinking a bit small. 

[00:07:04] So I wanted to encourage them, and I said, can I tell you what I would do if I had your amount to spend? They were like, yeah. So I said, “Okay, this is what I would do.” These are trips that I’ve taken before. I would arrange to have a car waiting at the airport. No looking for a taxi. Somebody’s there with a sign. They take our bags. We’re in air conditioning. They’ve got little hand towels. You’re just comfortable.

[00:07:24] They’re going, wow, this is totally different than how I normally get to the hotel. Of course, the hotel would be an amazing hotel depending on what you like, and maybe you upgraded it using a travel advisor, etc. When we arrive at the hotel, uh, let’s say we’re traveling with family, I would know that one of my family members really loves massages, and I would already arrange for a massage to be waiting for them.

[00:07:50] So as soon as they got there, I would say, mom, or dad, or whoever it may be, you know what, they’re going to take your bags. Why don’t you go to the room, get cleaned up? We’ve got a masseuse waiting. Whenever you’re ready, they’ll be waiting for you at the door, and they’ll take you there. That’s how you start to spend money to create amazing meaning.

[00:08:09] Okay. A few more things that I would do on a trip like this with loved ones, etc. I would schedule a food tour for the next day. So we’re in this beautiful resort. Cool. That’s great. We can eat there too, but I want to get out in the city. I want to see the local places. So we would’ve scheduled a food tour. They’ll take us to the market. We’ll find all this stuff we normally would never eat ourselves. Ah, it would be amazing. 

[00:08:30] What else? Um, the next day, we would do a cooking class at the hotel. The chef would come out, they teach us a few things, but mostly they do the work for you, so it’s pretty easy, and then you get to enjoy the food and some drinks. Awesome. Uh, I would plan one day of doing nothing at all. Absolutely nothing. If people want to go out into the city or they want to go out on a boat, they can do it, but it would just be downtime. Being able to engineer leisure time is one of the best luxuries you can possibly do, especially when it is with your loved ones.

[00:09:05] One other thing I would do, I would arrange a special dinner one night. It would be outside, beautifully lit, candles and everything. And, uh, I would let people know ahead of time, we’re going to go around the table and we’re going to say one thing that we, uh, have really appreciated about this trip. That’s it. 

[00:09:22] And with the chefs or the culinary team, I would coordinate with them and I would say, hey, my mom grew up in this area. Can we cook a special dish, uh, from that area? Uh, my dad loves this. Can we make sure that we have this type of dessert? A lot of these places love those types of requests. They want to make something special. 

[00:09:42] So you’re there; you’ve got the candles; you’ve got the beach; everyone’s going around saying something they appreciate; people are crying; and then the dishes come out, and you say, mom, I wanted to say, um, we love you so much, and we appreciate you. We know you grew up here, and this dish is really, uh, a reminder of where you came from, which made all of us possible. Okay. That is how I would create an amazing experience. And if you think about it, all the purposes of accumulating money, and saving it, and investing it, to me, this is one of the highest and best uses of your money in living a rich life.

[00:10:20] How do you discover off-the-beaten-path experiences? 

[00:10:24] Okay, so first of all, let me just say there’s nothing wrong with on-the-beaten-path experiences. I think a lot of us have this idea that, I want to live like the locals, and then I’m just like, ah, in your own hometown, how often do you sit and just converse with tourists? Not that often. I’m in New York. I live in LA. It’s not like a bunch of tourists just come up to us whenever we’re out and just start talking, and we spend four hours with them. So there’s nothing wrong with on-the-beaten-path experiences. A lot of times, they’re actually pretty cool. 

[00:10:55] But with that said, I will tell you how I do some of the unusual experiences that, uh, we do when we travel. One is I just keep a bookmark per country. So anything that looks interesting in Italy, for example, I have it bookmarked under Italy. So next time we go to Italy, I have, um, let’s see, a special stationery maker. I have a behind the scenes tour of a shoemaker. I have all these things that I want to do in Italy, and they’re all in different parts of Italy. All right, so that’s number one. I just start keeping a list.

[00:11:26] Number two, I read the travel sites in the magazines, so everything from Travel + Leisure to Robb Report to FlyerTalk, all of them. And I’m just constantly– for me, it’s fun, and I’m reading it, and then I’m bookmarking anything that looks interesting. Third, if I know people from those countries, I will ask them, what is an unforgettable experience that we should make sure that we do? And a lot of times, if I have friends who have traveled and have similar travel styles, I’ll ask them, and they’ll share a lot of stuff too. 

[00:11:54] Finally, this is where– I want to encourage you to get really creative. Airbnb experiences actually has amazing places you can check out in different countries. But I’ll post something about how we went to, um, in Kyoto, we went to a stationery maker who’s been doing it for generations, and I got like a million people, where did you find this? And I’m like, part of the fun is actually getting creative. And it’s really thinking, if I could see anything, what would it be? And then figuring out how to do it. 

[00:12:28] It makes travel so much less passive and so much more interesting. So if you love fashion, could you do a behind the scenes fashion tour, uh, in Milan, or might you hire a student at one of their fashion schools to take you shopping? That’ll be cool. Again, whatever it is for you. I like the idea of getting creative and making it personal for what you want to experience.

[00:12:55] What is your philosophy on hotels? People in our family say, let’s get a cheap one since we’re only sleeping there. 

[00:13:02] Well, I love hotels. For me, they’re part of my rich life. I will say that my philosophy is we typically save a little bit of money on city hotels, but we splurge on beach resorts. City, you typically are out a little bit more, and they’re usually not as good as beach resorts. But I personally love hotels for reasons that I wasn’t aware of when I was younger.

[00:13:29] For me, I love hospitality. I love customer service. Hotels are the Olympics of customer service and hospitality. The design, it has to be instantly welcoming. The staff is highly trained. The services they offer are always thinking ahead of what you need. In fact, even some of the stuff in the room can be quite detailed, and I just love the idea of being taken care of.

[00:13:52] So for me, those are some of the reasons I love beautiful, nice hotels. And when I look back, I think that they really inspire me. So when I come back, I go, wow, that was beautiful. The customer service was amazing. It inspires me in a personal level and certainly for my business as well.

[00:14:11]  How do you balance making dinner reservations and setting plans versus open times or playing it by ear? 

[00:14:18] When we first started traveling, we planned things way, way, way too much, and we had a little bit of a disagreement. And finally, we were like, okay, we got to not pack it in as much. Our purpose here is not to pack in as much as possible. It is to have an amazing, unforgettable experience. 

[00:14:39] And this really takes some thinking because the way we were raised, when I was a kid, if we went to Disneyland, we got there when it opened, and we stayed until the very end because we were going to pack it all in. We’re going to scrape all the meat off the bone. And I remember a friend of mine told me this thing. He said, if you ever go to a museum, you spend 90 minutes max, and the first 30 minutes are in the cafe. And I was like, what are you talking about? When I was a kid, we never went to a museum, and when we did, we’d be there all day.

[00:15:12] By the end, we were all crying. We wanted to get out. And he said, no, that’s not the point. You can always come back. That was so life-changing for me. It taught me about the abundance of knowing I don’t have to see everything, just what feels good right now, and I can always come back. So our new rule– my wife and I then adapted it from packing up the schedule to saying we want to do one big activity per day.

[00:15:39] Now we do one big planned activity every two days. That’s what we do. And beyond that, we have a list of things. They’re all bookmarked in Google Maps. Most of the time we’re out, we’re doing stuff because we’re feeling good, but sometimes we’re like, you know what? We don’t feel it. Let’s just hang out. Let’s go back to that place we went to yesterday. We loved it so much. Or let’s just hang by the pool. On a two-week trip in terms of dinner, we might do one upscale dinner reservation, probably do two other, I would say mid-level, and then we play it by ear.

[00:16:12] We like eating, but we don’t necessarily love super fancy food. But that took us trying all these different places for us to realize that. It’s about a cadence in terms of planning, but I would also say, even having this conversation by yourself or with a partner lets you hone in on what is important to you. I’m not a huge fan of taking a trip, going to a country, and when you land, trying to figure it all out.

[00:16:40] I know that some people love that. It’s super spontaneous. I think there are some things lost with my approach, but if I’m going there, I want to have a magical experience. And I don’t get a magical experience by just randomly wandering around with nothing planned. I do want to have some stuff in a map, so if I’m wandering by it, I’m like, oh, cool. I got to check this out. I read about this. And there’s room for wandering, but I don’t want to do that for my entire trip.

[00:17:08] How much money should you put away for vacation? 

[00:17:10] Well, this falls under guilt-free spending. So you tell me. If 20 to 35% of your take-home pay is for guilt-free spending, and if traveling is really important to you, maybe you’re spending, I don’t know, 15% of take-home on travel. That’s a lot. And if it’s one trip, that’s a huge trip. If it’s two trips or four trips, you can do the math.

[00:17:36]  In our CSP, travel is wildly overrepresented. Wildly. But that’s because we also don’t have a car payment, and we don’t have an expensive 1% AUM financial advisor that we’re paying, or some really expensive mortgage with all these phantom costs. So we take some of the money that we would ordinarily be putting towards those things, or credit card debt, and we put it towards what’s important to us, which is travel.

[00:18:04] What’s been your favorite stay so far? 

[00:18:07] Well, I’ve had a lot of magical trips. One of the most memorable was definitely our honeymoon. Uh, my wife and I were inspired by some older couples who basically told us they had taken these really long honeymoons, and we were like, who the hell takes a honeymoon that long? And then we were like, wait, what if we do that?

[00:18:27] And so we, uh, created a six-week honeymoon. We started in Italy. We went then to Kenya on safari, then India, and we finished in Thailand. And it took a lot of planning. So we used a full-featured travel advisory firm. We also invited our parents to Italy because we wanted to bring them with us. And we love them. 

[00:18:52] They’re mobile. They’re healthy. They like each other. Italy’s also a nice safe entryway for everybody. So we brought them with us, and that was magical. To be able to take my mother-in-law to the Vatican, and to be able to do a food tour with a chef in the farmer’s market, and then make all this food, it was awesome.

[00:19:11] After we had our time with our parents, they left, we continued on in Italy. We saw some amazing things. We saw some fashion stuff, design stuff. We went on safari, and that was also amazing. We went to three different camps, and we just experienced so much. Of course, we saw amazing animals. We started waking up really early. We stayed at a very warm family-oriented place. We stayed at an ultra-luxury place. We did all kinds of stuff. 

[00:19:37] Then in India, I’ve never really traveled like that. I have family in India, so when I go there, I stay with them. But this time, we didn’t tell anybody we were coming because I knew if we told them, we were going to get wrapped up in seeing all of our family. I said, this is our honeymoon. This is a one time. We’re not telling anybody. And instead, we stayed at the most amazing hotels in the world. 

[00:20:00] In fact, my favorite hotel, Udaivilas is in Udaipur. It’s incredible. We saw Taj Mahal, and I saw it in a different way than I had ever seen it before. Incredible seeing it with my family. Incredible seeing it with my wife for the first time. Seeing Golden Temple, going behind the scenes, doing tours that I’d never done in India, and finishing off in a beautiful, uh, resort in Thailand. So that was a beautiful trip. 

[00:20:26] And I think one of my favorite memories– gosh, I have two favorite memories of that trip, both of them from Thailand. One of them was I was just incredibly happy, and I was doing some journaling, and I realized, yes, I’m on my honeymoon. Of course, that’s why I’m incredibly happy. Yes, we’re eating the best food, and we’re with each other. But I was also happy because I had set a vision many, many years ago, in my 20s, before I even met my wife. I knew that one day I wanted to go on an incredibly amazing honeymoon without regard to cost. 

[00:21:05] I did not want cost to be the first, or second, or even third thing that I had to consider. So I started saving and investing money way back then. And to be able to be in these places without worrying about how much it costs to order a drink, to me, it felt like an incredible accomplishment. And I was really proud of the work that I had done, that my team has done to help so many people with their money, which in turn has helped my team, and has helped me, and helped me create this experience for my wife and me. So that was amazing. 

[00:21:41] And then my second and even more favorite memory was just a day later, my wife and I were reflecting on the trip. What did we love? What would we change? And she said something I’ll never forget. She said, “At the end of a trip like this, normally I would be sad, but I know that we can come back whenever we want.” Think about the abundance of that answer. 

[00:22:02] It’s amazing to have a partner that thinks in the same level of abundance as you do. To be aligned is incredible. And guess what? Almost every single year after that, we did take a huge, amazing trip. The only thing that derailed us was COVID, but we didn’t mind. So we stuck with it. We love travel. It’s become part of our rich life, and it feels incredible to be aligned with my wife Cass.

[00:22:30] Mm. What if I have debt? How do I balance debt payoff with savings for enjoying a vacation? 

[00:22:37] Now, this is a good question. All right. First off, I don’t believe that you should wait to live a rich life until some distant day in the future. I believe you should live a rich life today and a richer life tomorrow. At the same time, you can’t be doing whatever you want and then just rationalizing it by saying, this is my rich life. No. There are some tough decisions to be made, particularly if you have high-interest debt like a credit card debt. 

[00:23:08] Now, I’m going to actually be talking more about money and travel because I’ve noticed some peculiar things that people do when it comes to planning for their vacations. I’m going to talk about it this Saturday on the podcast newsletter. It only comes out once, so if you are not signed up right now, you will never see this piece again. Make sure you are signed up at iwt.com/podcastnewsletter. Sign up right now, and I will send you that article that I wrote on Saturday.

[00:23:38] Thanks for listening. Send me a little note, tell me what you think about this episode, and send me any other questions you’ve got about travel, money, vacations, and the rich life. I’ll talk to you next week.