How to Create a Travel Budget
Contrary to popular belief, your trip can be as cheap or expensive as you want it to be (for the most part). It all depends on what kind of traveler you are. The key is to pay attention to how much you are spending. To ensure that your trip doesn’t end of being more than you can afford, learn how to create a travel budget and stick to it!
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- Budgeting Methodologies
- Building a Travel Budget
- Sticking to Your Budget
There are two ways to go about travel budgeting:
- Set a budget based on personal finances and build a trip based around your budget
- Build a budget based on what you want to do on your trip
Personally, I’m a fan of the latter methodology.
If I set my budget first and then try and find things to do in my destination that fits within my budget, I feel like I focus too much on my budget and feel limited on which activities I can do. It just takes the fun out of trip planning if I’m constantly worrying about the financials. Don’t get me wrong, financials are VERY important. However, I’d rather have my fun discovering all of the amazing things to do in my destination before I start stressing about finances.
So, with all that said, this article is going to utilize the second methodology.
Building a Travel Budget
Personally, I like to create a best case, average case, and worse case scenario. Best case is if I happen to find really incredible deals on things like hotels and airfare. The average case is what I’m realistically going to spend on the trip. Worst case is the event that the price for the flight I was watching goes up or the hotel I was interested in fills up and I’m stuck booking a more expensive hotel.
To start building a travel budget, you’re going to want a place to write down expected expenses, whether that’s in an Excel document or in a travel budget template worksheet (like the one found in my Dreamer’s Travel Templates).
Once you’ve got a place to write everything down, it’s time to start crunching some numbers!
You’ll have the least control over what you’ll spend on flights (although there are some travel hacks for getting cheap flights). They’ll also likely be one of the most expensive items you’ll have to purchase for your trip, so I tend to start my travel budget with expected flight costs.
If you are a frequent flyer with a particular airline or have points to use on a travel credit card, I’d check there for flights first. Chances are, this is where you would get the best deal.
Beyond that, flight search engines are great for helping you get an idea of what your flight will likely cost. Skyscanner tends to be my go-to website, but you could also use:
Road Trip Expenses
If you’re driving to your destination instead of flying, getting to your destination will likely be significantly cheaper, but gas can definitely still add up. Plus you may have to pay for toll roads and parking.
Any GPS should be able to calculate your route. A good GPS such as Google Maps, Waze, or Apple’s Maps app will also tell you the total number of miles traveled and any tolls involved.
To get an idea of how much I’ll likely have to spend on gas, I’ll divide the total number of miles for the trip by my car’s average miles per gallon (mpg). If you don’t know your car’s average mpg, you can just google “[car model] mpg” and you should find your answer.
Dividing the total number of miles by your car’s mpg will give you the gallons of gas you’ll need for the trip. For example, for our Arizona road trip, we expected to drive approximately 1,300 miles. The Chevy Malibu we rented gets approximately 32 mpg, meaning we would need just over 40 gallons of gas for the trip. At the time, gas was approximately $2.30 per gallon (I just googled “Phoenix, AZ gas prices” to get this number). At $2.30 per gallon, 40 gallons of gas would cost $92, so we budgeted $100 just to give us a bit of a buffer.
Luckily, we didn’t have to pay any tolls during our Arizona road trip, but if you have to take toll roads or pay for parking if you make stops along the way, make sure to add that to your road trip budget as well.
Similar to flights, there are a lot of hotel search engine websites that can help you get a good idea of how much lodging is going to cost. You could also look into things such as homestays or pet setting to potentially save money on accommodations.
Depending on my destination and the transportation situation (such as whether I plan to rent a car or take public transit), I’ll look at hotels in the downtown area close to all of the activities I want to do and at hotels outside of town away from all of the tourist attractions.
Personally, I’m more of a mid-range traveler, so I tend to look at 3-star hotels first and use these prices for my average case scenario. I’ll use the 2 and 2.5 star hotels as my best case scenario price and the 4 and 5 star hotels prices as my worst case scenario.
Food is sometimes one of the harder things to accurately budget. If I’m traveling within the United States and feeling lazy, I’ll just budget $10 for breakfast, $10 for lunch, and $15 for dinner per person, regardless of the destination. That can be a bit low for some cities and high for others, but it’s been a good starting point for my budgets.
The “Eat” and “Drink” sections of listings on Wikitravel will often list popular restaurants and bars and their average price, which can be a good way to get an idea of how much food will cost in your destination. You could also just google “popular restaurants in [your destination]” and take a look at the menus of some of the restaurants that pop up.
Other factors to take into consideration when building a travel food budget include:
- Does your hotel offer free continental breakfast?
- Can you cook in instead of eating out?
- Do you plan on buying any snacks?
Budgeting for activities is pretty straight forward. If you did your research on things to do in your travel destination, you’ll likely have a pretty good idea of what your activities are going to cost. However, I tend to add a little extra to this section in my budget just in case I discover something really cool to do after I’ve arrived in my destination.
This is another section of the budget that can be kind of tricky, and will vary greatly depending on how you plan on getting around town.
If you chose to stay in a hotel near all of the activities on interest, you may be able to just walk everywhere. In that case, your transportation expenses would be zero, zilch, zip, nada, nothing!
Renting a car will likely be one of the more expensive transportation options, but will be fairly easy to calculate in terms of cost. Most car rental companies will tell you up front how much it will cost to rent a car per day or per week. However, if you do go the rental car route, don’t forget to budget all the additional expenses that come with it such as gas and rental car insurance (although if you have a travel credit card you may not need to purchase the rental car insurance).
If you plan on using taxis, ride shares, or public transit to get around, your transportation budget will be a bit hard to nail down. The only way you will be able to get a truly accurate idea of transportation expenses is if you have a very detailed itinerary. If you are like me and like to great detailed itineraries, this won’t be a problem. However, if you’re more of a “go with the wind” type traveler, you’re just going to have to ball park it.
For my itineraries, I plan out all of the activities I will do that do, and also figure out how I’m going to get between them, whether that be a bus, train, or other mode of transit. I then calculate how much each of those is going to cost. Maybe it will be $2.50 to take a bus from my hotel to my first activity, $3.25 to take a train to my second destination, $10 to take a Lyft to my third destination, and $15 to take a Lyft back to my hotel at the end of the day. For that particular day, I’d be spending $30.75 just on transportation. Do this for your entire itinerary, and you should have a pretty good idea of what transportation is going to cost for your trip.
Souvenirs / General Shopping
I always budget at least some money for souvenirs. I collect stickers and picture frames from every destination I visit. Plus, when my mom and I travel together we always pick up a Christmas ornament to put on our Christmas tree when Christmas rolls around, and my boyfriend and I pick up snow globes when we travel together.
How much I budget for souvenirs depends on where I am going and what activities I plan on doing. For example, I didn’t budget much for souvenirs on our Arizona road trip because most of the things we did involved hiking. There really aren’t too many souvenirs to buy when you’re out hiking. However, I budgeting quite a bit for shopping when we went to Nashville because one of the biggest attractions in Nashville was Broadway street, an entire street lined with bars and shops.
If you have an idea on how much your normally spend on souvenirs, I’d start there and then adjust. For example, prices for stickers and picture frames are pretty much the same wherever I go in the world. If you are in an area where there is a lot of shopping, or going to a destination that has some unique souvenirs (such as Japan’s kokeshi dolls, uniquely favored KitKats, and more), I’d bump your budget up quite a bit (or as much as you are comfortable).
These are the expenses that a lot of people tend to forget to budget for and will easily blow your budget if you don’t include them.
The first is travel insurance. Some people skip this altogether, but it’s definitely worth think long and hard about before you deciding to pass on it. Let me ask you, why do people pay for car insurance, renters/home owners insurance, and other types of insurance? To ensure that they don’t lose out on a lot of money in the event that something happens. The chances of something happening are slim, but the second something does happen, you’re grateful to have insurance. The same applies for travel.
How much has your trip come out to be so far? Several hundred dollars? A couple thousand dollars?
What happens if you get sick or end up in the hospital and you end up not being able to go on your trip? If you don’t have travel insurance, that will be hundreds to thousands of dollars spent on a trip that you won’t be able to go and that you won’t get back.
If you have a travel credit card, there is a good chance that it includes travel insurance, so you don’t have to worry about it. Otherwise, take a look at some of the top travel insurance companies to get an idea of how much trip insurance will cost for your trip.
Travel Essentials Gear
Depending on where you are going, you may need to buy some additional gear. For example, our trip to Havasu Falls was the first time my mom and I had done long distance hiking and it was our first time backwoods camping. This meant that we had to buy all of the camping equipment and hiking gear that we would need for the trip.
Or maybe you are going away for an extended amount of time and don’t have a large enough suitcase? Maybe you have suitcases but they’re old and beat up? Purchasing luggage can easily set you back a decent amount of money.
Got a passport? Need one? The application for one has a fee associated with it, so don’t forget to include that in your budget either!
If you’re not leaving your home country, you probably won’t have to worry about this, but if you are traveling internationally, you’ll need to figure out how to make your phone work. In many destinations, you’ll have the ability to purchase international SIM cards for your phone or portable Wi-Fi packs. Alternatively, you could get an international phone plan. Regardless of the option you choose, it most likely won’t be free.
For a lot of things on your itinerary, there will likely be additional charges on top of the normal things you would pay for.
For example, maybe you are staying at a hotel that charges for parking, or maybe you are leaving your car at the airport so you have to may for long-term parking.
Are you checking any luggage? Depending on the flight you booked, it may cost extra to check luggage. It may even cost extra to have a carry-on!
When building your budget, try to think beyond just the big ticket items and brainstorm any other sort of “hidden fees” that may exist.
Depending on where you are going, it may or may not be customary to tip for certain services. For example, when you go to a restaurant or take a guided tour in the United States, it is custom to tip the waiter or tour guide 15 – 20% of whatever your total bill was. If you are planning on eating out a lot or taking a couple of guided tours, these additional expenses can add up quickly.
Sticking to Your Budget
You’ve got your budget all built out and have a pretty good idea of how much it’s all going to cost. The key, now, is to stick to it.
The easiest way to do that is to keep track of what you are spending as you go along on your trip. Many people prefer to use mobile apps such as Mint, Expensify, or Zoho to track expenses, but even a small journal and pen will do. Just make sure that, whichever option you choose, you have the ability to write down not also what you bought and how much you spent, but else what category the purchase falls under, so you can see which part of your budget your getting tight on (such as food, souvenirs, etc).