Figuring out how much your trip will cost is important, but also a bit like trying to predict the future. You don’t want to be halfway through your trip and realize you’re almost out of money. At the same time, it’s hard to know what you’ll be doing months down the road.
So how do you know how much money you need to travel? Here are my tips for how to create a travel budget.
Research what other travelers have spent
This goes for long term travel or short trips. Search for blog posts about travel budgets for the locations you’re traveling to. But don’t just look at their numbers. Read about how they travel. A blog post about traveling on $25 a day won’t give you a realistic budget if you’re not a bare-bones backpacker.
Look closely at the types of activities they did, where they stayed, how they got from one place to the next. These things will all factor into how much you will spend.
Seeing what other travelers spent on their trips will give you a ballpark number for your budget. But I like to dig a little deeper to get amounts that are specific to the trip I’m planning, especially since prices can change from one year to the next.
Research transportation and accommodation costs
Since you probably have a general idea of where you plan on traveling, start looking up the different pieces as if you’re booking it all right now. How much do flights cost? How much does other transportation cost, like buses or trains? What about hotels or hostels?
For example, I recently planned a trip to Central America. Some backpackers will save lots of money by taking the chicken buses, but I know this isn’t comfortable for me. I’d much rather take a more direct, more comfortable bus even if it costs more. So I looked at the bus company websites to see what they charge. I also found a few hotels I’d be willing to book to get an idea of what they cost.
Budget for activities
Activities can be a little harder to budget for because they’re one-off things, and you might not plan on it ahead of time. But it also means there isn’t as much variation.
If you’re going to Southeast Asia and you know you’d like to see Angkor Wat, find out how much it costs to see the temples and hire a tuk-tuk driver to take you there. If you’re going to Australia and you want to go scuba diving, do some research on scuba and live-aboard options.
It’s also worth finding out if haggling is an option where you’re going. You probably can’t negotiate your way into a cheaper live-aboard scuba experience on the Great Barrier Reef, but you can haggle on the cost of an island tour in Thailand. I think it’s still worth using the cost you find online as a guide for budgetary purposes, but it helps to know when you might be able to pay less.
Budgeting for food
Food costs vary greatly depending on how and where you travel. You’ll spend less if you stay in hostels with kitchens or rent apartments so you can cook instead of eating out all the time. Eating out in Hanoi will be much cheaper than eating out in Paris.
Do some research on what food costs in the destinations you’re visiting. If you know you like to eat at nice restaurants, find a few that have menus posted and see what their prices are.
Make sure to account for alcohol if you like to drink. That can add a lot to your budget if you like to party while you travel.
Track your expenses
HOT TIP: Always round up your travel estimate. I’d rather have more money than I need, as opposed to running out before the trip ends. No matter how well you plan, there is almost always unforeseen extras that pop up while actually on the road.
In order to see how your budget is working out for you, keep track of what you spend. When you’re actually on your trip, tracking your spending will help you stick to your budget. It’ll also show you where you can cut back if necessary. Track your spending on a spreadsheet, old fashioned pen and paper, or get a tracking app for your phone.
Some popular travel expense tracking apps include:
- Trail Wallet
- One Receipt
Now it’s time to save
Now that you know how much money you need for your trip, it’s time to save up! Find ways to cut expenses at home, like reducing your cable or cell phone plan, eating out less, not buying new clothes, and taking public transport. Find ways to earn more by picking up extra shifts, getting a side job, or selling things at a garage sale or on eBay or Craigslist. (Also consider picking up your travel gear at thrift stores or other unexpected places.)
Keep that trip in mind as your main goal. And since you already know how much the different pieces cost, compare the cost of a new dress or a night at the club with what that money will pay for while you’re traveling. That makes it really easy to resist spending money you should be saving towards your trip.
Do you have any other tips for how to create a travel budget?
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