A holiday is a break from work and your normal life. It absolutely does not need to mean going abroad.
We've had a few big trips for various reasons (40th, family gatherings, weddings, supporting competing teen etc). But we've had just as much, if not more, fun on lower key trips locally - both in this country and abroad but closer. Explored interesting places for history, culture, art, music. Found great places to eat. Bought some lovely clothes or things for the house. Met interesting people.
Relaxed.
Often "big" holidays come with stresses (logistics of getting there, moving around, can involve difficulties with food, acclimatising to temperatures or humidity or even time differences - we have gone as far as US, Canada, Cuba and China in the past.) And especially so when supporting teen competing in her sports - finding food that works for her, getting spare parts when needed, dealing with paperwork and bureaucracy in a different language and culture etc.
But our ultimate aim with holidays is to find somewhere that we can relax, unwind from stressful jobs and hopefully also find some interesting things to enjoy once we've slowed down a little. Some Sun and heat is nice, but it's more important to be able to relax. We've had a lot of fun walking in rain in new areas once we brought the right gear. So that doesn't need to involve spending a huge amount of money or going a long distance.
So our spend on holidays is not extravagant compared to our salaries and potential budget. But it is money we can afford on breaks away from everyday life that are interesting and will help US relax. In our families, we have others who go on big trips transatlantic every year and like lots of theme parks, pthers who go on cruises, others who like hillwalking in the UK and Europe, others who go camping and others who love a beach break and don't need anything else but an AI hotel. So everyone is different.