How to Budget for Travel Costs

Sunglasses, a sun hat, a passport and money sitting on a world map.Surasaki / Shutterstock

Travel is expensive and it's easy to keep the budget. Here's how to set a more accurate budget for your vacation.

Whatever your trip, you have four main expenses: transportation, accommodation, food and beverages, and activities. You also have two other expenses that you might forget to include: travel insurance and incidental expenses (souvenirs, bottles of water, etc.). Let's break down each expense and how best to prepare.

Transport

Transportation to your destination often represents the highest cost. Flights, especially abroad, are not cheap. They can turn a cheap week into a breathtaking and unique journey.

The Kayak home page.

Flight prices are relatively easy to budget, however. Check the websites as Kayak or Skyscanner to compare prices on a few dates you are considering and book the ones that work best. You must buy the tickets in advance, so that the expense is blocked well before you leave.

Transportation after your arrival at destination is more complicated and can also be expensive. It is useful to consider:

How do you go to the airport, at home and abroad? Four taxi trips at $ 30 will cost $ 120 more.
How do you move every day to your destination. Is there a good public transport network? If yes, is there an unlimited daily pass? Are you going to have to Uber? Do a little research and budget accordingly.
If you require rent a car. If that is the case, be sure to include the cost of any insurance you may need as well as the rental fee.
If you are traveling from one destination to another. Train tickets are expensive and, like flights, better booked in advance.

The advantage of transportation is that as long as you do your research in advance, you will not be surprised at the costs.

Accommodation

With transportation, the place of your stay represents another important travel cost. Again, however, as you are more likely to book it in advance, it is predictable.

The first thing to do is decide what type of accommodation you want. Generally, youth hostels are the least expensive, Airbnbs is somewhere in the middle and the most expensive hotels. You can usually get an inn bed for around $ 25 a night, an Airbnb for around $ 100 a night or a hotel room for around $ 150 a night (of course, there are exceptions to all these exceptions).

The homepage of Booking.com.

On sites like Booking.com and Hotels.com, you can compare the prices of different accommodation options.

Unlike transportation costs (if you are willing to take the risk), hotel stays are generally cheaper when the booking date is near. You can get good deals the same day, but that means you do not know where you will be staying in advance. And, if things go wrong, you might be forced to pay a lot of money for a lousy hotel room. For more tips, read our article on save money on accommodation when you travel.

Unless you like a bit of adventure while traveling, we recommend avoiding the riskier strategy and booking your accommodation in advance. It saves costs in your budget and makes it easier to forecast your expenses. If a super cheap deal is presented, you can always check the cancellation conditions on your hotel reservation. You can usually cancel until the day before the start of your stay.

Food and drink

We are now entering the most unpredictable expenses. How much you spend on food and drinks can vary a lot. I've had days where I've spent hundreds of days and days where I spent less than $ 10 – the same trip! Even in the most expensive countries, you can usually eat cheaply. But alcohol can deplete your wallet in the most economical places.

With respect to food and beverage budgeting, past behavior is the best predictor. Do you like big meals and bottles of wine? Or is a sandwich in the sun enough? Decide where you are in the spectrum, then do some research. Most restaurants have their menus and prices online now. You can also use a cost of living calculator to see how your destination compares to your hometown.

Woman at an outdoor restaurant table with a meal and a bottle of wine on it.Littleaom / Shutterstock

Do not forget to include coffees and snacks in your calculations – they can easily add $ 10 a day.

Another thing to look for when researching is whether the tax is included and if it is a culture of failover. I was a little shocked on my first visit to America when a $ 10 dish actually cost $ 13 after adding tax and tip.

In addition, consider your consumption habits. If you have a few beers, you will be much more likely to have a few more. Do not schedule three beers a day if you know you are more likely to drink at least eight beers a day. It's better to be pleasantly surprised at the end of your trip than to dip into rent money next month.

Once you've got a rough figure – for example, $ 10 for breakfast, $ 15 for lunch, $ 30 for dinner, $ 20 for drinks and $ 10 for coffee and snacks, add about 20% as a buffer. If you plan to spend $ 85 a day, round up to $ 100 to be sure. This way, if you decide to take a few extra cocktails, you have some flexibility.

activities

The final final cost you will probably have is the activities you will do. Tickets for major tourist attractions can be added.

You have some options for budgeting activities. You can plan your trip and budget in advance, or you can budget a fixed amount per day and decide what you will do when you are there. If you go for the first option, things are pretty predictable. Just make sure you stick to about 10% more for any random tips or activities you decide to do on a whim.

If you opt for the second option, the best thing to do is to research the cost of what you like to do. Then multiply the average price by the number of days you think you want to do something – but again, go over budget.

Insurance

World homeads insurance home page.

Travel insurance is something that many people forget, but you must consider it in the cost of your trip. Fortunately, this tends to be quite cheap. You can easily find good deals for under $ 100.

Accessories

When traveling, you always happen things that you forgot to include in your budget. These are usually small things like pain killers, souvenirs or postcards. However, if you do not take them into account, they can add and surprise you.

I take the budgeted amount and add another 20%. Combined with the game that I have already considered for food, drinks and activities, this provides a generous diversified amount in which I can draw if needed.

Another option is simply to choose a lump sum, for example 100 USD, for unforeseen expenses. As long as nothing serious happens, it should be more than enough. And if something serious happens, it is probably covered by your travel insurance.

General budgeting tips

Now you should have a pretty good idea of ​​the cost of your trip, but here are some additional tips that could help you save even more money.

If you want to track your budget, create a Google Sheet or Excel document before you go. Once you are there, you can use an application like Splitwise track your daily expenses and make sure you do not go wild.

Be realistic when setting your budget. Do not expect to earn $ 50 a day in New York, no matter what you say in the worksheets. Always think too much about budgeting for something rather than too little.

Watch the exchange rate because they can change. Sometimes they work in your favor, as during your visit to Asia. Other times, they can play against you, for example if you go on holiday in Scandinavia. Do not make the mistake of assuming that the cost is the same everywhere.

Prices can also change quickly. There is often a discount when you book online or in advance. The fact that the price was one thing when you did a search a month ago does not mean it will be the same when you get there. Always check all big budget items.

Calculating a specific travel budget may seem boring, but it will greatly facilitate your trip. It allows you to save the necessary amount and take the vacation you want without insisting on the costs.

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