- More vacations correlate with more raises and bonuses
- More vacations correlate with increased productivity
- More vacations correlate with better health outcomes
Here I will lay out the argument that taking more vacations makes more sense from a personal finance and health perspective. Personal financial advice, unfortunately, tends to encourage self-denial and perpetually delayed gratification; this financial advice encourages the exact opposite approach.
You’ve probably heard that Americans take off less time than most of the other advanced industrial economies. What you might not know is that in this age of digital bliss, Americans are taking even LESS time off than they did in previous decades; nearly a week less in fact. The great irony of the last 2 and a half decades is that the digital and information ages has not ushered in more free time on the shoulders of increased productivity, rather our free time is collapsing under the weight of more grinding and more hustle than ever before.
You might be thinking that all of this added hustling and grinding surely has a payoff. Afterall, most economic assumptions are based on a preference for rational choices; but unfortunately you’d be mistaken. Consider this: In 2018, 52% of Americans did not make full use of their paid time off; they earned an average of 23.2 days of paid time off and used an average of 17.2 of those days. This equates to the average American employee donating $561 to their company last year (project time off)!
I’m willing to bet that most of us are not willing to freely donate our hard-earned money to our employers. However, there are other reasons for taking more vacation. Many falsely believe that taking fewer vacation days will make them look good in front of their boss. Indeed, nearly 40% of employees prefer to be viewed as a “work martyr”, sacrificing themselves for their career. Yet, those who take more vacation days are more likely to receive a raise. In fact, those who take 11 or more days of vacation per year are 30% more likely to receive a raise. Far from being a waste of money, taking a vacation makes sense financially and from the perspective of mental and physical well-being.
While you definitely shouldn’t dip into emergency savings or rack up credit card debt to take a vacation, using extra cash on hand, or saving up for a vacation definitely isn’t a “waste of money.” It may be tempting and perhaps even prudent to scrutinize larger cash expenditures for waste, but that doesn’t mean we should always go looking for reasons to avoid cash expenditures. A vacation is a perfect example of this. I know I can easily think of several dozen reasons why I shouldn’t go on a vacation, but it’s important to me that I balance one side of the ledger with the other. What value do I put on my mental health and well being? Is it more or less than I’m willing to spend on the occasional vacation?
Multiple and rigorous studies highlight the benefits of prolonged get-aways in regards to mental and physical well-being. These include, increased immune functioning, lower stress levels, increased resilience, lower levels of burnout, and a boost in productivity and creativity. With this in mind, it’s easier for me to frame a get-away as more a prudent measure of self-care rather than an unnecessary expense. Generally I perceive a boost in a sense of well-being and productivity upon my return.
The point is, don’t put off a vacation because you think doing so is a poor use of money, or your boss might notice that you never take vacation and be more likely to reward you. Plan ahead and take reasonable measures to make sure you aren’t breaking the piggy bank; and definitely do not leave your paid time off on the table.
Erik Goodge is a CERTIFIED FINANCIAL PLANNER™ and the President of uVest Advisory Group. He holds a B.S. in Economics and Cognitive Science from the University of Evansville. Erik is a Marine Corps veteran of the Afghanistan campaign and Purple Heart recipient. He is from Evansville, Indiana, and currently lives in near-by Newburgh with his wife and daughter.