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Fed Survey: Most Families Skip Vacations
31 Oct
Summary
- 39% of families spent nothing on vacations recently.
- Median vacation spending for travelers was $3,500.
- Discretionary spending like travel is cut first during financial strain.
A recent Federal Reserve survey has uncovered a significant financial fault line in the United States, indicating that a substantial portion of families cannot afford vacations. The survey found that 39% of American families reported spending nothing on vacations over the past 12 months. This group predominantly consists of younger families, those with limited income and wealth, and individuals facing health issues.
For families that did manage to travel, the median spending was $3,500, with an overall average of $4,200. This disparity is attributed to a smaller group of high spenders, such as those taking cruises or international trips, skewing the average. The Fed juxtaposed vacation spending with routine expenses like food, noting that food at home averaged $7,700 with a median of $6,000, indicating that groceries are essential while vacations are optional.
Financial strain appears to be a key factor, with the share of families behind on loan payments rising significantly. The report suggests that vacation spending increases proportionally with income and wealth, underscoring its nature as luxury spending. As families' budgets are stretched thin by essentials like rent and groceries, travel becomes the first expenditure to be cut. Consumer confidence also remains a concern, with low sentiment levels potentially leading to further reductions in discretionary spending like vacations.
