Can We Spend $15k For A Vacation?

Summary

Podcast Summary: Ramsey Everyday Millionaires

Episode: Can We Spend $15k For A Vacation?
Release Date: June 27, 2025
Host/Author: Ramsey Network
Participants: Dave Ramsey, Co-hosts, Caller

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Introduction

In this episode of Ramsey Everyday Millionaires, the Ramsey Network team delves into the financial considerations of allocating significant funds for vacations. The discussion centers around a caller’s query about spending $15,000 annually on travel and how it fits into a millionaire’s financial strategy.

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Caller’s Scenario and Question [00:17 - 02:35]

The episode opens with a caller, Sam from Buffalo, New York, reaching out to Dave Ramsey. Sam and his wife, both physicians, have a combined income approaching half a million dollars over the past five years. They have diligently managed their finances by living conservatively, paying off student loans, and maintaining an emergency fund of over $100,000.

Caller’s Background:

• Income: Nearly $500,000 over five years (approximately $100,000 per year)
• Debt Status: Recently paid off student loans; currently paying $500/month for a second car, intending to clear it within the year
• Assets: Emergency fund exceeding $100,000
• Concerns: Observing family members facing unforeseen health issues and financial instability, raising concerns about their own future security.

Caller’s Question: "Is it okay to spend, say, $15,000 to $20,000 a year traveling and creating memories?"
[02:34]

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Dave Ramsey’s Response [02:35 - 05:21]

Dave Ramsey responds affirmatively to the caller’s question, outlining the foundational financial "Baby Steps" that guide his advice:

1. Baby Step 1 & 2: Establishing a $1,000 emergency fund and paying off all debt except the house, which Sam and his wife have accomplished.
2. Baby Step 3: Building a fully funded emergency fund (Sam has over $100,000).
3. Baby Step 4: Investing 15% of household income towards wealth building and retirement.

Key Points:

• Debt Management: Ramsey emphasizes the importance of eliminating debt, highlighting the caller’s responsible financial behavior.
• Spending on Experiences: Encourages intentional spending, suggesting that with a stable financial foundation, allocating $15,000 to $30,000 annually for vacations is financially insignificant for someone with their income level.

Notable Quote:

"$15,000 worth three times a year... you need to spend more than $15,000 on a vacation."
— Dave Ramsey [05:12]

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Co-hosts' Insights [05:21 - 07:15]

The co-hosts expand on Ramsey’s advice, emphasizing the importance of aligning financial decisions with personal values and love languages.

Key Insights:

• Value of Experiences: Recognizes that for some, like the caller’s wife, experiences are a primary value and a form of expressing love.
• Intentional Spending: Highlights the necessity of understanding the purpose behind expenditures, ensuring that spending aligns with what the couple values most.

Notable Quote:

"It's not because it's too expensive... if you can look at it and realize that’s why you don’t want to spend the money."
— Co-host [07:00]

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Final Thoughts and Encouragement [07:15 - 08:14]

Dave Ramsey and the co-hosts conclude the discussion by reinforcing the message of living intentionally and generously. Ramsey shares his personal approach to vacations and financial generosity, underscoring that responsible spending enables greater generosity.

Key Points:

• Live Like No One Else: Encourages living beyond mere financial conservatism to enjoy life’s pleasures while maintaining financial health.
• Generosity: Emphasizes that financial stability allows for increased generosity towards others.

Notable Quote:

"Live like no one else so that you can live and give like no one else."
— Dave Ramsey [07:50]

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Conclusion

The episode underscores the balance between financial responsibility and enjoying the fruits of one’s labor. For high earners like the caller, Ramsey advocates for intentional and generous spending on meaningful experiences, provided that foundational financial security is in place. The conversation reassures listeners that with proper financial management, allocating substantial funds for vacations is not only permissible but can enhance overall quality of life.

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Key Takeaways

• Financial Foundations: Prioritize eliminating debt and building an emergency fund before significant discretionary spending.
• Intentional Spending: Allocate funds for experiences that align with personal and relational values.
• Generosity: Use financial stability as a means to enhance both personal enjoyment and generosity towards others.
• Personalization: Financial advice should be tailored to individual circumstances, income levels, and personal values.

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Notable Quotes with Timestamps

• "Is it okay to spend, say, $15,000 a year traveling with my life, creating memories?"
  — Caller [02:35]

• "$15,000 worth three times a year... you need to spend more than $15,000 on a vacation."
  — Dave Ramsey [05:12]

• "It's not because it's too expensive... if you can look at it and realize that’s why you don’t want to spend the money."
  — Co-host [07:00]

• "Live like no one else so that you can live and give like no one else."
  — Dave Ramsey [07:50]

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This episode of Ramsey Everyday Millionaires provides valuable insights into balancing financial prudence with the joys of life, especially for high earners seeking guidance on intentional spending. It reinforces the philosophy that with a strong financial foundation, one can afford to create lasting memories without compromising long-term financial goals.

Transcript

[Sam]

This episode is brought to you by SmartVestor. Connect with an investing pro near you at RamseySolutions.com SmartVestor Sam is in Buffalo, New York.

[Dave Ramsey]

Hi, Sam, how are you?

[Caller]

Hi, Mr. Ramsey. Thanks so much for taking my call. Good afternoon. How are you, sir?

[Dave Ramsey]

Better than I deserve. What's up?

[Caller]

So, Mr. Ramsey, I am looking for your permission to be able to spend money and live well while I'm young. Let me provide some context. My wife and I are both physicians. We collectively make a little under half a million dollars over the last five years. We've been living only off my paycheck and using her paycheck entirely towards her student loans. I did not have any student loans, so we had the luxury of doing that. We recently paid that off.

[Dave Ramsey]

Yay. Way to go.

[Caller]

Yes. Thank you. Thank you. I appreciate that. Thank you. We're very happy. So we have this new income which we've never used before. For the most part, we live pretty conservatively. I drive the same car I did in residency and we did buy another car as our family grew. We pay $500 a month on that and we plan on paying it off by the end of this year. Calendar year. Mr. Ramsey, I more and more as I'm getting older. I'm 37.

[Dave Ramsey]

I don't know how you get around.

[Caller]

And just trying to keep up with you, I suppose I am. The people around us are getting old as well, and we look to them as examples, family and friends. And what I tell you is most of our closest family members are not living the retirement life they thought they would. My father passed away last year after about an illness that took him about a decade to sort of succumb to. Prior to that, over the decade, he was mostly non ambulatory. My father in law has diagnosed with early onset dementia before the age of 60 and now is in a nursing home. So both my mother and mother in law are living lives that they never thought they would. And I looked to them and although the sample size is small, I worry about my wife and my health as we get older. As a physician, my paycheck is mostly guaranteed. I mean, I'm licensed in three states. If we lose my job, God forbid, it would not be very hard to find something soon. We have a little over $100,000.

[Dave Ramsey]

What's your question?

[Caller]

My question is, is it okay to spend, say, 15, $20,000 a year traveling with my life, creating memories?

[Dave Ramsey]

Of course it is.

[Caller]

Okay. Okay. Okay.

[Dave Ramsey]

I don't teach people to live in a cave and collect Lent when They make a half a million dollars. Unless you're working on getting out of debt. But you didn't exactly sacrifice when you got out of debt. You were still living on 200 grand while you were getting out of debt.

[Co-host]

And you got a car loan.

[Caller]

Sure.

[Dave Ramsey]

And then you went and borrowed money to get a car. So pay a stupid car off and not by the end of the year. Dude.

[Co-host]

Yeah. How much is it?

[Dave Ramsey]

What do you make? You make like 40,000 bucks a month. Geez.

[Caller]

Yeah, well, yeah, yeah.

[Dave Ramsey]

Pay off the car and. And go on vacation. And go on vacation. $15,000 worth three times a year.

[Co-host]

And you don't.

[Dave Ramsey]

And.

[Co-host]

And let me also add to that because there was a lot of, like, comparing to other people's lives. And why just this is your life, like, your life is your life. This is your income, this is what you did about your debt, and this is how you're going to go on vacation. You don't have to justify it by all these kind of like woven in things that you were doing.

[Dave Ramsey]

You're a doctor, you see sick people all day long. Could that possibly skew your decision making? Of course it could.

[Caller]

100%.

[Dave Ramsey]

Yeah. So, you know, and so all you see is all these things. I'm a guy that helps people not avoid bankruptcy. So when I pull up to a stoplight and see a nice car, I see a car payment, you know, I don't see a nice car. So, you know. Anyway. All that to say. Yes, of course. We teach people baby step. $1,000. Two is out of debt. Everything but the house. That includes your car and your student loan. We're there now. Then baby step three is an emergency fund. Three to six months of expenses. I'm guessing you have some money saved for an emergency, Correct? How much?

[Caller]

I do. Yeah. We have about a little over $100,000.

[Dave Ramsey]

How much do you owe on the car?

[Caller]

$8,000.

[Dave Ramsey]

Okay. Pay it off tonight when we get off the phone.

[Caller]

Okay.

[Dave Ramsey]

Okay. Now then. And then you're 100% debt free except your house, right?

[Caller]

Correct.

[Dave Ramsey]

Good. Okay. Now we've got an emergency fund. We're at baby step 4. Start bidding 15% of your household income away towards wealth building and retirement. And then let's start paying off the house. But when you leave baby step three and you are debt free and have your emergency fund, we teach people to move from intense, which is where you don't go on vacation or out to eat, to intentional, which is where you do go on vacation. And you do buy a nice car because you make Freaking half million dollars a year. You need a good car. Don't drive a hooptie and certainly don't put your wife in a hooptie. And so, you know, and so, yeah, you need to go and you need to spend more than 15,000 on a vacation.

[Co-host]

That's what I was going to say, but I didn't.

[Dave Ramsey]

That's not much of a vacation for a guy that makes a half a million dollars. Okay, you need to do. I want her in a Four Seasons. Yeah, put Walgreens or St. Regis. Yeah, I want her. I want her enjoying this. Okay. Which, by the way, is going to make you enjoy it.

[Co-host]

I hope she is listening because you were going to go take her to Marriott. I know you were.

[Caller]

Yeah. Yeah. Well, you know, after listening to you, I always want to cover my defenses. You know, I want to make sure that we're able to pay for.

[Dave Ramsey]

You're in great shape. I just want you to do everything, everything on purpose. That's all I want you to do. I want you to look at the whole picture and say, I have this much. If I put this much on a vacation, mathematically it's irrelevant. 15 to $30,000 on a vacation, when you make a half a million is 8% of your income. It's financially mathematically irrelevant. You could take that much and burn it in the middle of the floor and your life would not change. That's the way you need to learn to look at it. It's the burn it in the middle of the floor example, the ratios. Now, if you make 30,000 a year and you want to call me and say, I'm going to spend 30,000 on vacation intentionally, I'm going to say you're intentionally stupid. Don't do that. Okay. Because that's 100% of your income. No, we're not doing that. But, you know, so I.

[Co-host]

The hard part, I think, comes when it's something that clearly your wife values experiences. That's a love language, a spending love language. She has. Clearly, it doesn't seem to really be yours. So it's probably harder for you to justify that amount. So looking at it through that lens should make it easier to say, hey, she values this. It's. The mathematical side is still what Dave said. But if you can look at it and realize that that's why you don't want to spend the money. It's not because you don't. It's not because it's too expensive.

[Dave Ramsey]

You're exactly right. And here's the thing. We need to make sure everyone hears the message more often because he didn't get the message of live like no one else.

[Co-host]

So that so that is the key conjunction.

[Dave Ramsey]

You can live and give like no one else. I'll guarantee you that Sharon and I are leaving in two weeks on a two week vacation and it wasn't 15,000.

[Co-host]

I don't want to know how much it was. I'm. It's going to scare. Scare, don't scare the people to live.

[Dave Ramsey]

Like no one else. And I'm not being snobbish but I mean I've worked my butt off for a long time now. I'm an overnight success, right? So you know, it's an irrelevant amount of money of course mathematically in my life. So live like no one else so that you can live and give like no one else. Increase your generosity too people.

[Sam]

Thanks for tuning in to Ramsey Everyday millionaires Need help with your investments? Connect with a smartvestor [e-mail] smartvestor or click the link in the show notes. Ramsey Solutions is a paid non client promoter of participating pros. Learn [e-mail] SmartVestor.