As the summer season is quickly approaching, many Americans are turning their attention to the upcoming travel season. There are numerous articles and statistics illustrating that planning a vacation can be a time-consuming ordeal. However, when vacation time becomes increasingly valuable, most recognize that dedicating time before the trip can certainly maximize our time away from home. According to Travelwires.com, in the 45 days prior to booking a trip, travelers spent an average of 303 minutes per day perusing travel-related content before booking their trip. That’s more than 5 hours a day, and the average American views over 277 pages of travel-related materials in those preceding 45 days. It’s clear that when things are important to us, planning becomes paramount.
When you unpack these numbers, I draw some interesting conclusions. Based on the averages, we spend 13,635 minutes, or over 227 hours, planning a vacation that lasts, on average, one week. In other words, we spend almost 9.5 days planning for a 7-day vacation. Statistically, the average American receives approximately 14 days of vacation time per year, equating to almost 19 days of planning, comparing, and scrolling through the internet to make the most of our coveted vacation time. This highlights a paradox: we’re willing to dedicate significant time, energy, and resources to plan for a relatively short period.
I don’t say this to admonish this behavior—vacations are important. They represent a significant investment of time and money, generating invaluable returns in the form of memories and experiences. We all deserve that break, whether it’s a tropical getaway, a weekend road trip, or a family reunion. The effort involved is worthwhile. However, when viewed through the lens of an investment advisor—someone focused on planning for the retirement years of individuals nearing the workforce exit—I see some stark contrasts between the time spent on vacation planning and financial planning.
According to a recent article from The Motley Fool, only 3% of Americans engaged in any type of financial planning on an average day in 2022. This figure has steadily declined since the early 2000s, according to the Bureau of Labor and Statistics. Some of this can be attributed to age and what we deem more pressing in our lifetimes. The average 30-year-old may regularly take vacations but might see retirement as a distant proposition without urgency. So, when viewed from an age demographic perspective, it’s not surprising that just 2.2% of Americans aged 35 to 44 engage in some form of financial planning, compared to 5.8% of those 65 and older.
This trend becomes more evident: as we get closer to retirement, we dedicate more time, energy, and resources to financial planning. But life rarely adheres to the ideal timeline. According to The Motley Fool Ascent survey, 24% of respondents engaged in “crisis budgeting” or urgent financial planning when faced with unexpected expenses or loss of income. This reactive approach to financial planning is a significant source of stress. Additionally, several surveys indicate that less than 50% of Americans can afford a $1,000 emergency expense, and this number is rising. Inflation, property tax increases, and rising fuel costs contribute to this. The decline in time spent on financial planning all adds up—pun intended. So, I ask: if rising costs are stressing us, why aren’t we responding by committing more time and resources to ensure financial stability when unexpected things happen? That’s what an emergency fund is for.
This is where investing in yourself becomes paramount. Just as you dedicate time to planning your vacation, consider dedicating time to your personal growth and financial well-being. Investing in yourself can take many forms—whether it’s developing new skills, furthering your education, improving your health, or increasing your financial literacy. Learning about budgeting, understanding investment strategies, and setting long-term goals are essential to enhancing your future stability. When you allocate time and resources to improving your knowledge and financial preparedness, you’re not just securing your retirement; you’re giving yourself the confidence and peace of mind to navigate life’s uncertainties.
Now, I recognize that many of you are doing your best to juggle all the tasks of the day while still putting dinner on the table. But we’re heading down a path of increasing financial fragility. Much of this can be attributed to how we view spending versus saving. Unfortunately, society is fixated on social media and showcasing highlight reels to strangers on the internet. But if we continue to spend money we don’t have on things we don’t need to impress people we don’t know, the course will never be corrected. These activities become habits, then patterns, and ultimately shape our financial behaviors. Changing this mindset isn’t easy, but long-term success requires long-term planning. For some, this means embracing the concept of delayed gratification.
This is why, when we meet a new family at our office, we ask about their goals—both short-term and long-term. If you don’t have any goals, it’s time to set them and define them with deadlines. Goals need to be attainable and meaningful. Establishing a budget is a key driver of how much you can spend, but more importantly, how much you can save. Not to belabor the point, but planning for emergencies and preparedness reduces the financial impact and emotional toll of those emergencies. Managing debt is also crucial, as debt is a tool—improperly used tools can be harmful. As these elements come together, they can be refined, and you can begin investing for the long term—saving for retirement and planning for taxes. All of these actions will sharpen your financial literacy, so as you build wealth, you’ll be better equipped to maintain and grow it.
Let me ask you this: if the average American spends just 1.8 minutes on financial planning per day, that’s about 632 minutes over the course of 351 days. Why 351? Because the other 14 days are spent on vacation, not thinking about financial planning! That’s less than 5% of the time we spend planning our one-week vacation. Meanwhile, the average retirement in the U.S. can last upwards of 25 years. If we shift our focus to long-term goals and break them into manageable pieces, planning for retirement becomes less daunting. Additionally, starting to invest and save sooner allows our money to appreciate and benefit from the 8th wonder of the world—compound interest.
In conclusion, I encourage you to invest in yourself, define your goals, and put a plan in place. Then, sit down with a financial professional to put all your goals, income, investments, tax liabilities, and legacy plans into context with a written retirement plan that you can understand and work toward for long-term financial success. This way, you can enjoy the longest vacation of them all—retirement!
"Investing in yourself can take many forms—whether it’s developing new skills, furthering your education, improving your health, or increasing your financial literacy. When you allocate time and resources to improving your knowledge and financial preparedness, you’re not just securing your retirement—you’re giving yourself the confidence and peace of mind to navigate life’s uncertainties."
This article is meant to be general and is not investment or financial advice. Please consult your financial advisor before making financial decisions.
Investment advisory products and services are available through AE Wealth Management, LLC (AEWM), a Registered Investment Adviser. Investing involves risk, including the potential loss of principal. Past performance is no indication of future results. Investors should carefully consider investment objectives, risks, charges, and expenses before investing. Neither AEWM nor its agents or representatives provide tax or legal advice. Individuals should consult a qualified professional before making purchasing decisions. Layman Lewis Financial Group is not affiliated with the U.S. government or any governmental agency. 2911686 - 3/25