Vacation/travel budget

[Jabbed]

I recently impulse signed up for the Chase Sapphire Reserve and now realize that I'll need to spend ~$12K a year on travel in order to break even with the cash back that I would've gotten on my flat 2% cash back card. I'm a new attending, W-2, $400k sal, $200k loans, no kids yet. How much should I budget for travel/vacation/restaurants while still paying down loans quickly?

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[Birdstrike]

How much should I budget for travel/vacation/restaurants while still paying down loans quickly?

That's a personal decision. I can't tell you how much to budget on travel. Spend some, save some. But I personally, don't let how much I get back in credit card rebates a significant part of my decision. That's letting the tail wag the dog.

 

[Franzd'Epinay]

It's not just about the cash back. Is your math accounting for the $300 travel credit, automatic travel insurance, and TSA pre-check credit? There's even a doordash credit now, which would account for essentially an extra $60 (I think) credit.

When I did the math years ago (before the rate went up another $100), I would break even after something like two round-trip flights (for two).

 

[Jabbed]

It's not just about the cash back. Is your math accounting for the $300 travel credit, automatic travel insurance, and TSA pre-check credit? There's even a doordash credit now, which would account for essentially an extra $60 (I think) credit.

When I did the math years ago (before the rate went up another $100), I would break even after something like two round-trip flights (for two).

Cost: $550 + $75 (authorized user)
Benefit: Travel credit ($300) + Global entry credit ($100/5=$20).
Net: $625-$320=$305

I didn't factor in the medical travel insurance as it is very modest at $2500 coverage. Not sure how to value trip cancelation coverage as I never get it. I don't use door dash.

Assuming 3% back on travel plus 50% with rewards redemption, total cash back is 4.5%. Compared to a 2% cashback card, the break even is $305/(4.5%-2%)=$12.2k.

Was definitely a sweeter deal at $450/year where the break even point was $8.2k.

 

[Jabbed]

That's a personal decision. I can't tell you how much to budget on travel. Spend some, save some. But I personally, don't let how much I get back in credit card rebates a significant part of my decision. That's letting the tail wag the dog.

I agree, but I was curious how much other people in similar situations are budgeting. I've never had much discretionary income before and am looking for loose numbers.

 

[Franzd'Epinay]

Cost: $550 + $75 (authorized user)
Benefit: Travel credit ($300) + Global entry credit ($100/5=$20).
Net: $625-$320=$305

I didn't factor in the medical travel insurance as it is very modest at $2500 coverage. Not sure how to value trip cancelation coverage as I never get it. I don't use door dash.

Assuming 3% back on travel plus 50% with rewards redemption, total cash back is 4.5%. Compared to a 2% cashback card, the break even is $305/(4.5%-2%)=$12.2k.

Was definitely a sweeter deal at $450/year where the break even point was $8.2k.

I never found the authorized user necessary as all the big purchases (flights being one example) can go under one person.

As for door dash, I never use it either, but I do get take out occasionally and it's hard to turn down "free" money.

I was talking more about the trip cancellation and delay insurance. I used to never get it, then got stuck in a terrible situation where I really wish I had it. I've paid for it ever since (it used to be somewhere between $60-100 per trip before I got the Reserve card).

If you're not a believer in travel delay/cancellation insurance, then there are better travel cards out there (Chase Preferred and some of the the Amex cards).

 

[Birdstrike]

I agree, but I was curious how much other people in similar situations are budgeting. I've never had much discretionary income before and am looking for loose numbers.

Gotcha. My income varies throughout the year and isn't 100% predictable. So, I don’t budget an exact dollar amount/year for travel, although I should.

I handle it like this. I make sure all my bills are paid first. Then I make sure all my must-do savings and investments are done second (401k, 529, HSA, etc). Then, what’s leftover is play money.

If it’s a weekend trip within driving distance, we just book it. I just know I’ll be able to afford it. We also generally allow ourselves one big trip per year, 1 week, all 4 of us, with domestic or overseas flight, restaurants, etc. That’s hard to do for less than $4,000-$10,000, if it’s our whole family, with our tastes in things. Sometimes we’ll sneak in a second big-ish trip in a year, but that’s when is usually feel the financial crunch.

On occasion I’ve overdone it a little bit, but as long as all the bills are paid and the long term savings stuff is being put away, I don’t worry about it too much and just chill out on big trips for a while.

It probably would make more sense to budget an exact amount, but I don’t. I just sort of wing it. It works for me.


Edit: When a brand new attending, I didn’t spend quite this much on travel. I paid off some bad debt first and the travel budget ramped up to this over 10-15 years.

 

[GeneralVeers]

The travel cards are of less value than they used to be. The real benefit to them was using points to redeem absurdly expensive international First/Business flights at next to no cost. That option is basically gone at the moment, and even with the available flights, the service cutbacks and having to wear masks makes the experience not worth it.

With the Chase Reserve I find the value is in the dining bonus. At 3X points for dining, you can rack up a lot of points if you eat out a lot. There are better options though, as the Amex Gold gives 4x points on dining, and the Citi Prestige gives 5X.

The Chase Reserve used to be the best card out there for travel, but is now surpassed by several competitors like the Citi and Amex cards. I only keep it now to use at merchants who refuse to take Amex as I put almost all my spend on my Amex Blue card (2X points on everything).

 

[AlmostAnMD]

I budget hardly anything for vacation

I spend probably more than 10k/year on fancy bourbon

everyone has their poison, some more literal than others

 

[dchristismi]

Ok... you're a brand new attending. Do not let lifestyle inflation bite you in the @ss. It's a thing, and it's hard to scale down. Pay down the big stuff and live like a resident for awhile.

Grow into it slowly. It's like menus where there aren't prices. If you have to ask, you can't afford it.
If you have to think about it, just downgrade to the Sapphire Preferred for now. It's still a solid card.

 

[BoneWizard]

I used to just put away 20% of my post tax discretionary income for vacations/travelling to family. But I made less than 1/3rd of what you're going to be. Why not just pay the higher interest loans and let the sub 4/4.5% loans ride?

Cost: $550 + $75 (authorized user)
Benefit: Travel credit ($300) + Global entry credit ($100/5=$20).
Net: $625-$320=$305

I didn't factor in the medical travel insurance as it is very modest at $2500 coverage. Not sure how to value trip cancelation coverage as I never get it. I don't use door dash.

Assuming 3% back on travel plus 50% with rewards redemption, total cash back is 4.5%. Compared to a 2% cashback card, the break even is $305/(4.5%-2%)=$12.2k.

Was definitely a sweeter deal at $450/year where the break even point was $8.2k.

I got the card for the sign on bonus/interview travel a while ago but ended up keeping it when I started school mainly because of Chase's point transfer.
I usually max out the 5% rewards from my freedom card which comes out to $300 a year. That's an extra $150 with the reserve. The lounge access is also fairly nice.

 

[Brigade4Radiant]

The thing is to use the card for everything. You get 1.5x points for travel and occasional the same for Apple products.

 

[Groove]

Totally personal. I make about the same as you. I spend about 20K on travel/food/lodging. I like my vacations. I spend 21-30 days skiing. I travel to the Caribbean for a week and I take a big hiking trip. I splurged on a t.v. and Xbox last year. I buy at least 5K in nice scotch a year, probably more. That being said... I haven’t shopped in probably 4-5 years other than figs and running shoes. I have one nice watch. I invest at least 100K every year, etc.. You just gotta pick your poison. (I don’t have kids)

 

[Franzd'Epinay]

Totally personal. I make about the same as you. I spend about 20K on travel/food/lodging. I like my vacations. I spend 21-30 days skiing. I travel to the Caribbean for a week and I take a big hiking trip. I splurged on a t.v. and Xbox last year. I buy at least 5K in nice scotch a year, probably more. That being said... I haven’t shopped in probably 4-5 years other than figs and running shoes. I have one nice watch. I invest at least 100K every year, etc.. You just gotta pick your poison. (I don’t have kids)

Way to bury the lede there 😉

 

[Groove]

Way to bury the lede there 😉

I guess I'm just trying to say that it's not necessarily irresponsible if you decide to splurge on one or three things while making over 350K as long as you cut back on other things. Even when I was paying off 400K in loans over 4.5 years at 8-12K/mo, I still probably spent 15K on vacations easily per year. I bought a nice car one of those years and decorated part of my house during another. Sure, I worked to make an extra 40-50K during that time. Everything can be done in moderation. I don't think new attendings have to live like paupers and eat ramen noodles for X number of years after they graduate. We're so conditioned into this state of delayed gratification and overwhelming guilt when we indulge in any amount of spending towards our own personal happiness (until EVERYTHING is paid off). Then everyone wonders why we're such a depressed and burned out lot with twice the suicide rate... I think there's a nice happy medium between responsible saving, aggressive debt repayment and just enjoying life as a new attending after having sacrificed a decade of blood, sweat and tears.

Now, all that being said...I will admit that all of that is MUCH easier to say when you have no kids. I'd probably spend and feel much differently if I had them.

 

[Groove]

Any card guru's have any advice on whether I should switch my AMEX Platinum for something else with my above lifestyle? I really don't have any use for the airport lounges and I don't fly more than 5 times a year. I pretty much use it for everything and use the points towards flights and occasional amazon purchases.

 

[GassYous]

Similar situation to op. I take 8 weeks of vacation and I travel a lot more as an attending. Got the amex platinum now. The centurion lounge is nice especially in denver. They are building a lot more including in laguardia. 5% back on travel and 10% back on gas/groceries for first 6 months. We already used the cash back for uber (think 15 a month with 20 in december), paid for global entry and will use the 50 dollars at saks. With the welcome bonus we already have about 1300 of cash back from 5-6 k of spending in the first month of using it. But with the recent nerfs (can't use it at restaurants, increased price, etc.) I think it is not as worth it as it used to be. Also it is annoying that you can only get 5% at certain partners for stays instead of being able to use it at any hotel or whatever you want.

The freedom unlimited gives you 3% back on dining and you can put the points back into any other chase card. Also, if you use it for travel through the chase website you get 5% back. I prefer the amex card because you can deal with airlines directly. It is a real hassle to change flights or deal with canceled flights through chase on the phone. But it's a free card with 1.5% back on everything else. This upgrade to that basic card along with the sapphire reserve nerf makes me think the sapphire card is not worth it.

Before we got the amex platinum I've been using the freedom unlimited, freedom (5% rotating categories) and the bank of america cash back card (3% on category of your choice - gas, online shopping, dining, travel, drug stores or home improvement/furnishing; 2% groceries/wholesale, 1% everything else). I think the amex platinum is worth it now because we are planning on doing a lot more international travel as the world gets over covid (along with everyone else).

 

[Franzd'Epinay]

Any card guru's have any advice on whether I should switch my AMEX Platinum for something else with my above lifestyle? I really don't have any use for the airport lounges and I don't fly more than 5 times a year. I pretty much use it for everything and use the points towards flights and occasional amazon purchases.

Flying up to 5 times a year is still pretty significant flying all things considered. I would think the travel perks would still be worth it at that point.

Now, if you were flying 0-1 times a year, then I would focus on the cash back alone. @GassYous mentioned some good ones up there. Some of the Amex Blue cards would also be worth looking into.

 

[GeneralVeers]

Any card guru's have any advice on whether I should switch my AMEX Platinum for something else with my above lifestyle? I really don't have any use for the airport lounges and I don't fly more than 5 times a year. I pretty much use it for everything and use the points towards flights and occasional amazon purchases.

If you don't fly a lot, then cashback cards or hotel rewards cards are a better value. Capital One and Amex both have very attractive cashback options.

 

[RuralEDDoc]

I messed with the AmEx platinum for a couple years and in the end feel it was not worth the hassle. Worrying about getting more than the $500 annual fee back in rewards was stupid. Give me 2% cash back on all purchases and AmEx can keep its lounges.

 

[Fox800]

The travel cards are of less value than they used to be. The real benefit to them was using points to redeem absurdly expensive international First/Business flights at next to no cost. That option is basically gone at the moment, and even with the available flights, the service cutbacks and having to wear masks makes the experience not worth it.

With the Chase Reserve I find the value is in the dining bonus. At 3X points for dining, you can rack up a lot of points if you eat out a lot. There are better options though, as the Amex Gold gives 4x points on dining, and the Citi Prestige gives 5X.

The Chase Reserve used to be the best card out there for travel, but is now surpassed by several competitors like the Citi and Amex cards. I only keep it now to use at merchants who refuse to take Amex as I put almost all my spend on my Amex Blue card (2X points on everything).

Same strategy. For places that don't take Amex, a part of me gets petty revenge because Visa Infinite fees (ex. CSR) are even higher than what Amex charges. Everyday spending goes on the Amex Blue Business Plus.

 

[cyanide12345678]

I recently impulse signed up for the Chase Sapphire Reserve and now realize that I'll need to spend ~$12K a year on travel in order to break even with the cash back that I would've gotten on my flat 2% cash back card. I'm a new attending, W-2, $400k sal, $200k loans, no kids yet. How much should I budget for travel/vacation/restaurants while still paying down loans quickly?

To me the best credit card for cash back is the alliant 2.5% everything card. $99 annual fee.

My federal taxes even go on this thing (1.89% fee that is a business deduction lol). All in all, i probably put 70-80k on that card, including some taxes that my accountant doesn't cover in payroll deductions.

 

[Fox800]

I enjoyed the Amex Platinum a lot more when I was flying multiple times a month for locums. I'm keeping it at the moment, I'll use the Centurion lounges 8-10 times a year.

The purchase protection is a big seller for me - buying big ticket items like electronics, things on eBay. Amex is the best to deal with when it comes to customer service, disputes, returns, and purchase protection.

I pair it with the Blue Business Plus. I have an Amex Gold but it almost never gets used as restaurant acceptance around here is so poor - I have to use a Visa/MC for that. I'm probably going to cancel my Gold this year.

I also have a CSR. It's $250 after the travel credit, then I knock off at least $50 for primary rental car insurance (rent a car 1-2 weeks per year), I get some value from roadside assistance, $60 for Door Dash...you're left with a $100-150 AF card, which is almost the same AF as the Sapphire Preferred but you earn more points for travel and restaurants and have better benefits. Done.

I also have an Apple Card that I use as a backup backup, no AF, no foreign transaction fees, 3% at the gas station for gas/snacks, and it's a built-in backup on my phone if I ever lose my cards/wallet. It's a no-fee sleeper.

 

[Porfirio]

Sam’s Club - I buy everything at Sam’s club

No fee, 5% back for gas (gas is 55 cents/gal cheaper than other stations too), 3%+2% (Sam’s plus member) for all Sam’s Club purchases, 3% dining, 1% everything else

I was sad when they removed the 3% travel.

I think I get back $800-$1.2k a year.

I also have a Banana Republic card. I use that too and I get free clothes ($200-$400 a year).

I still live like a resident (save/pay down student loan - 50-55% gross salary a year) and been this way for a few years now.

 

[betamale]

I recently impulse signed up for the Chase Sapphire Reserve and now realize that I'll need to spend ~$12K a year on travel in order to break even with the cash back that I would've gotten on my flat 2% cash back card. I'm a new attending, W-2, $400k sal, $200k loans, no kids yet. How much should I budget for travel/vacation/restaurants while still paying down loans quickly?

You can travel for job "interviews" and CME. Use the card and deduct it as business expense

 

[pkwraith]

Most of the people in my group use most of our CME for vacations, aka virtual conferences. Its a pretty nice free 5k, although YMMV depending how strict your group is.

 

[emergentmd]

I recently impulse signed up for the Chase Sapphire Reserve and now realize that I'll need to spend ~$12K a year on travel in order to break even with the cash back that I would've gotten on my flat 2% cash back card. I'm a new attending, W-2, $400k sal, $200k loans, no kids yet. How much should I budget for travel/vacation/restaurants while still paying down loans quickly?

This is what I would do. 400K after taxes is about 300K. Put 100K/yr to loans and get it paid off in 2 yrs. Put 100K in retirement on top of whatever your job does. 100K for living expenses which is plenty and afford many trips.

Once you get married/kids, 100K will not be enough so get the loans paid off ASAP. I have a family of 5 and my credit card this year totaled close to 175K.

 

[bravotwozero]

175k on credit cards!? I would have a heart attack owing that much money to a credit card company lol

 

[GassYous]

This is what I would do. 400K after taxes is about 300K. Put 100K/yr to loans and get it paid off in 2 yrs. Put 100K in retirement on top of whatever your job does. 100K for living expenses which is plenty and afford many trips.

Once you get married/kids, 100K will not be enough so get the loans paid off ASAP. I have a family of 5 and my credit card this year totaled close to 175K.

???

 

[emergentmd]

Sorry, I meant this past year = 2020. I pay off cards every month so there is no interest plus got over 1500 cash back last year.

My 3 cards alone prob is 175K, add my wife and I am sure it was over 200K. I know it is crazy, and I am sure I could budget better but I don't feel we overspend. We are taking a 4 wk trip this summer and for a family of 5 with hotel/food/entertainment/transport will cost 20-30K. Kids club sports are expensive. We do a family ski every year and costs 10K. Club sport out of town trips are 1-2K a pop. I would guess we spend 50K on travel a year.

I still put 100-200K in savings every year so we don't spend over our means which IMO is all that matters.

 

[Brigade4Radiant]

I just paid off my loans and car I want to get a six month emergency fund going before buying a house

 

[Dr Mantis Toboggan]

Sorry, I meant this past year = 2020. I pay off cards every month so there is no interest plus got over 1500 cash back last year.

My 3 cards alone prob is 175K, add my wife and I am sure it was over 200K. I know it is crazy, and I am sure I could budget better but I don't feel we overspend. We are taking a 4 wk trip this summer and for a family of 5 with hotel/food/entertainment/transport will cost 20-30K. Kids club sports are expensive. We do a family ski every year and costs 10K. Club sport out of town trips are 1-2K a pop. I would guess we spend 50K on travel a year.

I still put 100-200K in savings every year so we don't spend over our means which IMO is all that matters.

Respect. You are rich AF.