With the recession on, the concept of the staycation is growing in popularity. With a little resourcefulness, you'll surprise yourself with what you can do right nearby.
Obviously a staycation is much less expensive than traveling. You slash the cost of travel, lodging, and food, which add up surprisingly quickly on the move. If you ballpark $250/day for lodging and meals for two people, you could spend half of that on events every day and still come out ahead financially.
There's other perks too, if you know where to look for them. Since you don't have to travel to your destination, you get that time back to do more things. Instead of a day or two on the road, you get another day to use as you wish.
As for packing, there's no weight limit. You have everything you could need. You don't have to choose between your pairs of shoes. You get them all. The same goes for clothes, toiletries, towels. You don't need to worry about stuffing them all into luggage or having the airline lose or delay the bags.
On a staycation, you can try out the local amenities that you never get around to visiting when you're locked into your daily routines. You can go swimming, participate in local festivals, finding hiking trails at nearby parks, or discover exciting daytrips. Moreover, you can afford to splurge a little on the activities because the travel and accommodation costs are so low.
The people you meet close to home might turn into long term friends. If you meet someone far away, it's harder to stay in touch, but if they live close by, it's easy to reconnect.
You don't need to be cooped up in a car for hours to spend time with your loved ones. You just need to be mindful of the traps - like wasting your vacation in front of the television, or checking your work email - that keep you from the relaxation and interaction you need.
Fundamentally, vacations are about building common memories and bonding with people you care about. You don't need to travel across the world. You can do this from home.