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I took my wife and son for a week and we spent roughly:
$1000/person airfare (could have done miles if we'd gotten the delivery date nailed down earlier, but that won't always happen)
$1000 for an apartment in Munich for a week
$1000 in cash for food, drink, tourist junk, transportation around town (hard to beat the U-bahn for convenience but did a taxi to the apartment to make luggage easy. No rental car needed since we drove the M3 to the airport the day we left!)
We saved a bunch of money (and sanity keeping our 5 year old settled) by staying in one place all week and just doing day trips in the car to the tourist junk (castles, zugspitz, etc.) If you've never been to Munich you can easily spend a week there without getting bored and we timed the trip to hit the spring festival, which is sort of a more family-friendly 1/3 scale Oktoberfest. Bavaria is one of the more kid-friendly places we've been in Europe... people actually take their young kids around with them, as opposed to London or Paris where you'd only see children at museums or locked up in school... even in summer!
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