The most important part of planning a trip is your budget. The more limited it is the less options you have. If you are rich and have unlimited resources, the sky is the limit. In the previous chapter I discussed various types of trip ideas. They covered budgets of all levels. So don’t worry, just because you have few financial resources you can still have a good time on your trip. While researching this chapter I came across the following website posting at capitalone.com , “How to Budget for Your Trip: Build a travel budget before you hit the road.”
Planning a big trip can be stressful, especially when you’re trying to make it COVID-safe and doing it on a budget. But knowing what you can afford, what you’ll need to spend and how to avoid overspending can help maximize the fun and minimize the stress. Here are a few ideas for building a travel expenses budget so you can feel as good about your finances as you do about your itinerary. The first thing you need to ask yourself is it the right time for a trip? This means do you not only have the time for the trip but can you afford it? You should be able to take the trip without going in debt. Nothing more detracts from the enjoyment you had on the trip then having to pay for it once you get back. It is better to save before then to pay after.
Can You Afford to Travel?
Let’s start out easy here. You may have dreams of globetrotting and living your best life in distant lands, but can you actually afford it?
The amount you have to spend on your trip will need to be proportionate to the place you are visiting. By that, we mean that some destinations can be done on the cheap, while others will be a bit more of an investment.
Where you want to stay, what you intend to do when you get there, and physically how far away you will be from home can all have a considerable bearing on how deep your pockets will need to be.
Before you book yourself silly, really break down the potential costs of your dream trip and tally it up with the amount of money you will realistically have to fund it.
Start at home
If you don’t stick to an overall spending budget, you may find it hard to build and keep a travel budget. So start by figuring out exactly how you spend at home, making sure you have enough left over each month to put away in a savings account. If you don’t, search your budget for places to save. If you’ve considered cutting the cord, let Wirecutter help you make a clean break. If you’re spending too much on á la carte workout classes or a gym membership, try online workout classes or free forms of exercise like running, biking and hiking to help keep costs down. Or hunt your bank statement for subscriptions, digital or otherwise, that you never use and cancel them. Once you’ve started padding your savings account, you’ll feel more confident about planning a big trip and building a budget for it.
Plan Your Adventure Well in Advance
The most traditional way to book a vacation is to think of somewhere you want to go, plan your vacation dates, and decide how long you want to stay. This kind of advanced planning is the usual go-to for most travelers, as it allows you to book time off of work or plan trips around school semesters, and gives you the opportunity to firm up plans before you leave.
Knowing when and where you are going also has another key advantage — it gives you plenty of time to save up all the cash you will need to really enjoy your time there. Booking in advance also means you get your choice of cheaper accommodation at better rates.
Book months in advance and you can research your planned itinerary and potential expenditure, and maybe even save enough extra for upgrades of luxuries to make your adventure truly special. This kind of planning is a great incentive for saving hard.
Analyze that spending
The simplest way to figure out what you’ll spend on a trip is to look hard at where your money went on a previous trip. Using the website or app for your bank and credit cards, find every expenditure related to the trip, from your airfare to your cab ride home from the airport. Include things you bought for your trip (like new walking shoes or sunscreen) and things you bought during your trip (like souvenirs or dinner). Then, build a spreadsheet that summarizes what you spent in each category. It’s not the most fun evening activity, but analyzing past spending will offer a glimpse into how much you spent on food, drinks, taxis and other categories, helping you plan for your next trip.
If you’ve never traveled or are traveling abroad for the first time, you can still plan your travel budget. Using the categories in the next section and a little online sleuthing, you can do your best to estimate your trip costs. On your next trip, get receipts as emails whenever possible, and take photos of your paper receipts. It will help you analyze your spending the next time around.
Travel Based on Your Bank Balance
If, on the other hand, you want to take your cash and get the hell out of dodge, you can work backward to identify the most amount of fun you can have for your money. If you are feeling lucky, and you know how much you are willing to spend, the world really is your oyster.
The awesome power of the internet has made impulse traveling even easier, as you can simply hit up any number of booking sites to find an exciting destination, as well as suitable flights, accommodation, and excursions in just a few clicks.
Another great way to make your budget go further is to think outside the box. Visiting popular destinations out of season, taking shorter vacation times, or even looking at places away from the main tourist trail can all make your money go further.
A trip to the legendary Yosemite National Park during April or May, for example, is a great way to experience some of the most iconic open spaces in America before the schools let out, or hit the beaches of Miami or the Florida Keys during September and October when tourists shy away from the increased risk of stormy weather.
You can also look at alternatives to the more traditional resort destinations to get more bang for your buck. Consider a trip to Reno instead of Las Vegas, hit the slopes in Winter Park instead of the sky-high prices in Vail, or take in the history of Williamsburg and avoid the price tags of New York or Los Angeles on your next city break.
Saving for Your Vacation
Before you worry about how to manage your finances while you are away, you will need to devise a plan that gives you the funds to get you there in the first place. Unless you have been blessed with a sudden windfall or a lottery win, you will need to save your cents to achieve your goals.
Set a Savings Timeline
If you receive a regular wage, or you are able to forecast your earnings accurately, you can start to set a timeline on how long it will take you to save up for your vacation. If you put aside just $100 a month, for example, you will be able to have $1200 to play with in just a year. This amount may not pay for a new life abroad, but it could you buy a week by the ocean.
Bottom Line:Think of where you want to go to, find out how much it will cost, and then set a monthly savings goal and stick to it. Some months you may have to sacrifice on your social life or shopping habits, but it will all be worth it in the end.
Multiple Savings Accounts
Once you know how much you need to save each month, be sure to physically remove that money from your day to day bank account. Set up at least 1 separate savings account and electronically move it, or set up an automated payment to leave your regular account on payday.
Travel Budget Considerations
When planning your travel budget, there are lots of different things to consider. Break down your budget into subsections to make it easier to plan and stick to:
Passport and Visas
One of the most essential elements of your travel plan will revolve around the legal and local requirements for travel to and from your destination. You must research any visa requirements and restrictions before you fly, and be sure to have all the documentation you need before you leave.
Most countries will have their own individual and very specific entry requirements, and there may be restrictions on how much local currency you can bring with you, as well as how long you can stay.
As a very rough guide, some examples of the requirements for U.S. citizens could include:
- Travel to Europe — If you are traveling to or through any of the main 26 European countries, you must know the requirements of the Schengen Agreement, which eliminates borders and assumes that travelers will be able to enjoy up to 3-months of visa-free travel. This will change in January 2021 with the introduction of the ETIAS.
- Travel to Australia — You must have a valid U.S. passport and an Electronic Travel Authority (ETA) to enjoy up to 90 days of travel in Australia.
- Travel to Central America — You will not need a visa to visit most Central American countries, but you may need a tourist card for some destinations (~$10) to allow stays of up to 90 days visa-free.
- Travel To South Africa — You must have a valid U.S. passport, but do not need a visa for stays of 30 days or less.
There are many great reasons why you should always buy travel insurance coverage for your trips overseas, and only 1 reason not to. Trust us. If the worst should happen while you are away, you will wish you hadn’t tried to save money by skipping on the insurance, so make sure you always make space for travel insurance in your travel budget.
The best travel insurance policy does not necessarily have to be the most expensive one you find, but it probably won’t be the cheapest either. With this in mind, shop around and speak to a variety of providers before committing to any 1 product.
There will be different levels of coverage available to suit the requirements of every type of traveler, from lone backpackers to family vacations, but at the very least you should try to include:
- Emergency medical expenses
- Repatriation expenses
- Cancellation or curtailment coverage
- Lost baggage coverage
- Travel delay/missed departure coverage
- Journey disruption coverage
- Personal liability coverage
- Legal expenses coverage
- Electronics loss/theft and damage coverage
Depending on where you go, what you’ll be doing, and the nature of your trip, you may want to also consider dedicated financial protection that could include specific coverage for:
- Winter sports coverage
- Terrorism disruption coverage
- Cruise coverage
- Business coverage
- Sports equipment coverage
It is important to remember that the domestic health insurance that you use at home will not necessarily cover you if you get into medical trouble overseas. Don’t leave it to chance — invest wisely in your travel insurance and never skimp on the coverage just to save yourself a few bucks before you go.
You should also look into insurance coverage for your prized electrical items and personal belongings, too. While we would recommend leaving the diamonds at home, unless you are going somewhere exceptionally glamorous, many of us will take expensive electronics with us everywhere we go.
Find coverage that offers repairs or replacement for damaged, broken, lost, or stolen items before you go.
Some parts of the world pose more of a risk to our health than others. By ensuring that you have all the travel vaccinations you need before you go, you can reduce the risk of developing serious diseases that your immune system may not be used to.
You can pretty much be vaccinated against all of the world’s most common communicable diseases at your local doctor’s office, health care center, or health department, and there will be medical professionals who will be able to provide you with useful information for your trip.
You will need to do your own research before you travel and speak to healthcare providers about the risks. But, as a rough guide to keep in mind when planning your travel budget, here are some of the most common travel vaccinations and their approximate costs:
- Cholera — A single-dose oral vaccine costs around $45.
- Hepatitis A — A single-dose vaccine costs around $115.
- Japanese Encephalitis — 2 doses given 4 weeks apart costs around $290 per injection.
- Meningococcal Disease — This single-dose vaccine is recommended from pre-teenage years and costs around $135.
- Rabies — A series of 3 or 4 injections into the muscles over the course of 4 weeks costs around $3000 for the entire course.
- Typhoid Fever — A single oral dose for anyone over 6 years old costs around $60.
- Yellow Fever — This vaccine is not stocked everywhere, but if you can find a clinic that offers it, you will need a single shot costing as much as $350.
- Malaria — There is no single vaccine, but antimalarial tablets can be taken to reduce the risk of contracting the disease by 90%. These may need to be taken as far as 3 months in advance and can cost anything from $20 a pack up to $260 per pack.
Clothes, Gear, and Toiletries
What you need to take with you will depend very much on where you headed. Whether you choose to travel light or max out your luggage allowance is up to you, but there are plenty of ways to help keep costs down when it comes to packing for your next adventure.
Compile a Capsule Wardrobe
Travel guides always bang on about the legendary “capsule wardrobe” — but it literally is a real thing. By taking 7 or 8 items of clothing with you that can be worn in a variety of ways you can dress for days at a time without worrying about overfilling your luggage or maxing out your travel budget.
Choose 2 pants, skirts or jeans, 3 tops, 1 sweater, 1 dress or a smart shirt and a coat or jacket, and you should be pretty much good to go. Throw in beachwear, sports gear, or thermals as-needed and some socks and underwear to see yourself sorted for the duration of your stay.
Another way to keep costs down is to avoid buying new stuff for every vacation. Your favorite bikini, flip flops, party dress, or even hoodie should be shown off time and time again, so never feel the need to replace your vacation clothing unless you really need to.
If you want to take your travel camera with you, your GoPro for awesome live video, your phone, tablet, laptop, headphones, or any other bits of kit — think carefully about whether or not you really need it.
Taking more expensive gear with you increases the risk of stuff getting lost, broken, or stolen, as well as weighing your luggage down and tying you to charging ports and electrical sockets.
Alternatively, buy what you need when you arrive. Most destinations and airports will have plenty of shops to choose from. One area where you shouldn’t cut costs, however, is sunscreen. Buy the best you can, ideally from a trusted brand, before you leave.
Finally, check if the airline you are using charges extra for checked baggage and if so, see if you can get away with just a carry-on case instead.
The amount you pay for your flights will vary widely depending on a wide number of variants, including:
- Your destination
- Who you choose to fly with
- Whether you fly direct
- Whether you fly return or one-way
- The day of the week and time of day that you fly, and even the time of year
- Where you fly from
- When you book
There are many different ways to fly around the skies, but here are some ways to bag cheaper flights:
- Use Points and Miles — If you aren’t accumulating points to fly, read this beginner’s guide to get started.
- Book as Early as You Can — Flights often significantly increase in price within 3 weeks of the departure date.
- Stay Flexible — Flights leaving on different days or at times of day can be cheaper than others.
- Don’t Dismiss Discount Airlines — Short journeys, internal flights, and even some international journeys can be way cheaper on discount, no-frills airlines.
- Sign Up and Shop Around — Sign up with airlines direct to be notified of discounts and flash sales, and be sure to check in on all airlines that fly to your preferred destination.
- Use Aggregation Sites — Sometimes this is a winner, sometimes it isn’t — but don’t be afraid to try. Sites like Kayak or Skyscanner can be good, but don’t just accept the first price they give you.
- Buy Connecting Flights — It can be cheaper to buy 2 separate connecting flights than a direct 1. Check your destination and see who stops where along the route.
What travel expenses to budget for
If you’re not an experienced traveler, you may not know exactly how to budget for travel. So, start with categories. Imagine your trip from start to finish, focusing on how you’ll spend money along the way. As you go, create a travel budget worksheet that puts your spending into buckets. Those buckets will depend on where you’re traveling and how you like to travel. Planning an all-inclusive beach vacation will require different categories than a trip to a national park. But generally, the categories in your trip budget should include:
- Transportation. This includes how you get to and from your destination and how you get around when you get there. These days, many people are opting out of airplanes and trains in favor of more personal forms of travel, like rental cars. Make sure you’re taking these choices into consideration when you budget for things like gas, food pit stops, and prepping your car for a lot of road time. Then check out your options for how you’ll travel when you arrive—taxis, Lyfts, public transportation or just walking. It could be a good idea to add in some cushion in case your transportation needs shift once you get there.
- Lodging, including taxes and fees. This could be a big chunk of change, but luckily, you should know exactly how much it is before you leave.
- Food and drink. This depends on a lot of factors, including how you like to eat, where you’re traveling and how much you expect to tip. If you’re more comfortable grabbing take out or getting delivery, make sure you’re taking those extra fees into account.
- Activities like museum tickets, tours, excursions, golf outings, etc.
- Souvenirs—anything you might buy on your trip that you wouldn’t buy at home.
- Car Rental—You can pretty much rent any kind of vehicle, anywhere in the world. Although if you are staying in a city, public transport is a much more useful and affordable proposition. The same rules also apply to some intercontinental trips, as well. For example, it can be easier and cheaper to travel through Europe using trains and buses than worrying about having to take care of a car when you get there. If you want to explore out of the way destinations, hard to reach beaches, or just like the idea of being free to come and go as you please, car hire is readily available in most corners of the world. Before you commit to it, think about the rental fees, fuel costs, and other potential expenditures and compare the costs of using public transport in your chosen destination.
Look for places to save
Once you see how you spend, you may discover that traveling costs a lot more than you realize. If so, you may want to try traveling more cheaply.
Say your last trip included hundreds of dollars in spending on Lyft or taxis. Price out what it would cost to rent a car for the length of your trip, which is often the cheaper option.
Maybe your dinner bills regularly reached $100 on your last trip. Use local food blogs and magazines to seek out small, local eateries and street food vendors that will capture the local flavor while keeping your dinner tab manageable. Also consider using an app like Airbnb or VRBO to rent a house or apartment near a farmers market or small grocery store, so you can try your hand at cooking meals with local ingredients.
Airfare often is the biggest expenditure on a trip budget, and right now, a lot of people just don’t feel comfortable with it. Instead, think about traveling by car. If you’re traveling with friends, make sure you’re keeping track of gas usage so you can split the cost later. Scope out the parking situation beforehand so you know where you can safely leave your car without racking up too high of a garage fee or getting an unexpected parking ticket.
Consider a staycation instead. If traveling away from home is something you don’t feel comfortable with right now or if it just isn’t in your current budget, planning a staycation could be a good alternative. You can still plan fun activities around the neighborhood, get your favorite take-out or go to your favorite local spot, or even set up a tent in the backyard. Finding some R&R with a staycation can give you the feeling of getting away, while being a lighter touch on your budget.
Car hire here in the U.S. will vary depending on the type of car you choose and how long you intend to hire it. Small city cars are the most cost-effective, and big SUVs, 4x4s and luxury cars can also be hired if you have deep pockets.
When it comes to car rental, keep your costs down by:
- Booking your vehicle in advance
- Looking outside the airport as you may get a better deal in town
- Choosing a practical vehicle to suit your needs, not your dream supercar
- Being aware of mileage limits and one-way fees
- Understanding the insurance coverage you actually need, so you can be ready to turn down unnecessary add-ons and cross-sells that you don’t need
- Making sure the vehicle is checked for damage before you take the keys
- Only hiring it for as long as you need it
- Keeping your eyes out for deals on particular types of car, and better prices for longer-term rentals
Most tourist hotspots, big towns, cities, and even some iconic landmarks will offer a wide range of public transport options to get you around. There will be more choice and more frequent services in highly populated areas, while services may become more restricted further out in the countryside or suburbs.
If you are clever, you could save yourself a small fortune by grabbing good deals on public transport, leaving you with more cash to spend on the fun things in life.
Try these tips for traveling around town on the cheap:
- Buy daily, weekly or even monthly travel passes in advance
- Bulk buy tickets online or via an app
- Take advantage of student passes or discounted fares for families, seniors, or children
- Avoid traveling during peak commuter times
- Services like Greyhound offer cheaper fares for mid-week journeys
- Sign up for early notification of flash sales and other promotional codes and discounts
Adjust on the fly
Analyzing your spending after one trip might help you plan for the next. But it won’t keep you from sticking to your budget while you’re traveling. So, if money is tight, consider tracking your spending while you travel and comparing it daily against your trip budget planner.
One way to rein in your spending is to designate a daily budget for food, drinks and other costs. You may even set aside that amount in cash each day, so you know exactly how much you spend. Just be sure to bring along an ATM card and credit card in case of an emergency.
Then, every afternoon, when you’re not wiped out but can use a short break, take a few minutes to see what you’ve spent. If you’ve overspent on food or drinks, consider something lighter for dinner. If you’ve already hit your target for activity spending, plan your next day around free sights. If you’re traveling somewhere that allows access to your favorite banking or budgeting app, use that. If not, bring a printout of your budget and just jot down what you spend in a notebook, then take a few minutes to compare.
If you stay on top of things, hopefully you’ll stay on budget until your head hits the pillow the second you arrive home. You may even find that you have enough left over to start planning your next big adventure.
Attractions and Activities
Wherever you are headed, there will no doubt be plenty of things to do and places to see when you get there. The key to not missing a single thing is researching everything before you leave.
Have a plan in place of all the activities you want to take part in and the attractions you want to see and integrate the potential entrance costs, additional fees, and other expenses into your initial budget.
With a bit of luck, you will be able to find plenty of local discounts, city passes, and money-saving ways to see all of the very best attractions at rock bottom prices.
Pick up a copy of the local listings magazine or newspaper and check out free events, as well as using the coupons and discount codes they supply for all kinds of attractions. You can also subscribe to online discount sites like Groupon to find discounted ticket prices.
Historical landmarks, museums, art galleries, theme parks, sporting events, concerts, and many more attractions often offer reduced entrance prices at off-peak times or group discounts to entice visitors in. Some even have a free entrance day once a month.
Big cities often have lots of free entertainment on offer, too. Check out the artsy districts of major cities for street entertainers and free shows. If you are heading to the beach, research costs such as sunbed rental, locker rental, and even the menus at local restaurants to gauge an idea of how much a day on the beach could potentially cost you.
If you want to try your hand at surfing, sailing, or other kinds of water sports, you may want to get back on the internet and find reduced price lessons or discounts for group bookings.
While you may have budgeted every dollar down to the last cent, you should also keep a contingency plan for some pocket money. Days out in the town, lazy afternoons on the beach, or even a trip on a planned excursion can present you with lots of little unknown expenses.
Whether you need to buy an extra bottle of water, some sunscreen for your face, or entrance to additional attractions, keeping a little cash on you is a good way to be prepared.
Large amounts of cash should never be carried about your person while you are out exploring, but a couple of dollars stashed into your pocket or travel wallet and can be incredibly useful.
In order to keep your money safe, you should:
- Never flash wads of cash
- Keep your notes and loose change somewhere safe like your inside pocket or in a money belt
- Carry small denomination notes and coins
- Understand the local currency you are carrying, so you known how much to give over when paying
Walk-around money is simply a little buffer to keep you going, but set yourself a daily budget and stick to it.
Websites to Help Research Travel Costs
From upgradedpoints.com posting by Amar Hussain
To help make your research easier, some clever folks who have traveled before you have made websites that can help you to research and plan every single aspect of your next big adventure and what the costs involved may be.
Budget Your Trip is a huge repository of travel costs that have been hand-gathered from thousands of travelers, and now provides an incredibly comprehensive guide to how much your trip will really cost you.
You can create and personalize your very own travel budget once you register with the website. You can also pick up tons of top travel tips and advice for both new and experienced travelers alike.
Nomad List offers a heap of resources and information for remote workers, digital nomads, and travelers, Nomad List is designed to help users navigate the world. Find information on thousands of destinations, places to work, neighborhoods to stay, and even make new friends before you go.
A great site for anyone who wants to work and travel for longer-term adventures, you can ask questions and arrange meet-ups to touch base with other like-minded wanderers.
This clever little website has 1 goal in mind — to let you know exactly how much money you really need to stay at your dream destination. Expatistan offers direct comparisons between different locations and the website is essentially a giant cost-of-living database that is updated and improved on a regular basis.
Using collaborative information garnered from expats from all over the world, this website really will give you the lowdown of where you can, and can’t, afford to be.
The Best Apps for Travel Budgets and Expense Tracking
Keeping track of your expenses using your bank balance alone can be a real pain. A dedicated travel money app will help you to keep control of your finances, even when you can’t check the internet. Here are some of the best:
This easy to use expense tracker is a great way to keep an accurate record of your finances on the go. Designed to be incredibly intuitive and easy to use, you can make a note of all your expenses in a way that makes the best sense to you. Set up daily spending limits, view records of your recent outgoings, and upload images of receipts for multiple trips with custom start and end dates.
Perfect for use both at home and away, this clever little app will even let you input amounts in local currencies from over 200 countries, and you can update the app with the current exchange rate.
Trail Wallet can be used on both iPhone and iPad and is free for up to 25 items, or unlock unlimited amounts for continuous travel with the $4.99 upgrade.
Trabee Pocket is available on both iOS and Android, and you can choose between the free version or additional services in the paid-for version. Even with the basic version, you can add the details of as many expenses as you like, covering various trips and destinations. You can choose your currency, and there are 8 basic categories to file your virtual expenses under.
You can add images of the physical receipt and produce an expense report and breakdown of expenditure using the data from each category. The upgrade costs around $2.49, and you can add multiple currencies and additional customized categories.
All in all, Trabee Pocket is sleek and an easy to use app that helps you to see how much you are spending and where you are spending it.
TripCoin is a concise and easy to use app that is available on iOS only. It is free to download, and there are no upgrade options at the present time. This smart app allows you to keep tabs on your spending at the touch of a button while making is super easy to add new entries when you need to.
Summary reports can quickly be compiled to let you see progress reports and spreadsheets, and you can even export the data to Excel, Numbers, Open Office, or Google to keep your inner accountant happy anywhere in the world.
Wally was designed to help anyone to manage their finances, anywhere in the world easily. It promises to offer a simple, seamless tool that works in an intuitive way, making it super easy to keep track of your money on the move.
The basic version allows you to add details of all of your regular incoming and outgoings as well as inputting your day to day expenditure, creating groups to manage joint accounts, and splitting payments with your friends when you need to.
It can be set to your local currency and lets you divide your outgoings into easy to find pre-set categories. Available on both iOs and Android, you can upgrade to the paid-for version for $24.99 a year to enjoy unlimited trips and categories.
This is a brilliant invention for anyone traveling with friends. Available on both iOS and Android, you can download it for free, but an in-app upgrade is available to Splitwise Pro. No more scrambling around with a pen and paper to split the bill, this app allows you and your buddies to keep track of your shared expenses and balances at the touch of a button.
You can add a bill, and choose how to split it, or send text or email requests to remind your friends and family that payments are now due. You can also categorize your expenses, calculate amounts in over 100 different currencies, and even sync all of your expenditures with the Cloud.
If you want to keep a more detailed record of your accounts, this little app will also export the data into easy to read CSV reports.
Now that the question of the budget has been covered, it is time to discuss where you are going. That will be covered in chapter three.