Ramit Sethi’s 5-Step Formula for Better Vacation Planning
Most personal finance experts who dole out vacation advice focus on the best ways to save money during your travels — but Ramit Sethi isn’t most personal finance experts.
The best-selling author, speaker, media personality and founder of the I Will Teach You To Be Rich brand is known for his counterintuitive takes on growing and preserving wealth. One of his recent YouTube posts showcases his money mindset. In a video titled “Most People Plan Vacations Backwards,” Sethi offered his 1.13 million subscribers advice on getting more for less from a trip — and his take goes beyond saving cash on airfare and accommodations.
Sethi believes most people plan their travels out of order in an effort to spend as little as possible, but this can lead to the biggest waste of all: a forgettable vacation. The good news, according to Sethi, is that you don’t have to splurge to enjoy an unforgettable time away. If you’re planning a getaway, consider Sethi’s advice on planning differently this time around — and forever.
1. Vision First, Cost Second: Plan in Reverse
Sethi’s primary thesis is that most people plan their vacations backward: They choose a location first, immediately compare flight and hotel prices, and only then consider what their ideal vacation looks like.
"They start by figuring out logistics instead of asking ‘What do I want to experience on this travel?’” he said. “Have you ever asked yourself, ‘What do I want to feel on this trip?’ No. You haven’t. You asked if it’s cheaper to go on Delta or United.”
2. Spend Big on What You Love, Cut What You Don’t
Sethi said it’s essential to start by asking what you want from a vacation — relaxation, excitement, culture, etc. — because only then can you develop a vision for the best way to budget your dollars. The idea is that intense personal interests, not generic tourist checklists, are what make great vacations memorable. So, skip the famous museum or must-see ruins that you’re “supposed” to do if that’s not what stokes your passions.
“Great trips are not just about spending the most money,” said Sethi. “They're actually about deeply knowing what you want and even what you don't want, and then building a personal trip around that.”
3. ‘Lower the Stakes’ and Seek Out Memory-Making Moments
Next, Sethi advised eliminating the pressure for perfection that hampers so many otherwise fine vacations that are bogged down by unnecessarily intense itineraries, and instead focusing on finding enormous experiences in small moments, like a perfect sunset or watching your children play at a park.
“We've all seen parents who go to Disneyland, and they are irrationally angry at their kids who are throwing a tantrum,” he said. “We build everything up into this one moment, and if it doesn't go perfectly, we become frustrated. What I would like to encourage us to do is... lower the stakes.”
4. Take Time Making Plans — and Let Them Evolve With You
Sethi advised extending the planning phase to 12 or 18 months, and not only because longer lead times can save money.
Keeping running documents and bookmarks of places to go, people to invite and food to try makes planning easier and leaves room for vacations to change as your life and goals evolve — and Sethi and his wife's travel-planning habits are the proof.
“Every December we're doing a rich life review,” he said. “We always start with the vision, like ‘What if, wouldn't it be cool if,’ and then we work on the logistics later.”
5. Use Money To Buy Only What Matters
Sethi closed by sharing a personal travel experience about a trip with his family to India that included a highly personalized dinner with a custom menu honoring the region his ancestors came from. The story defines his overarching philosophy on the best way to spend money when traveling — and it’s not on overpriced trinkets at the resort gift shop.
“This is the whole point of money,” he said. “To be able to create these magical experiences, to let people know that they are valued, that they are loved. That's a rich life.”
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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