Did you ever dream of traveling overseas but thought you could never afford it? Have you ever gone on a trip or traveled somewhere without knowing what it will cost you? Ever returned home and had a HUGE surprise when you received your credit card statement? If you have answered yes to any of these questions, it is time to change your travel habits by doing travel budgeting. Creating a travel budget of your dream trip can lighten the burden on you and your credit card.
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Benefits of a travel budget
Although having debt seems to be the norm these days, it can cause significant levels of stress and anxiety. Travel should be a fun activity, not something that causes stress and anxiety. Doing travel budgeting can help you plan financially for your future trips.
Travel budgeting for your trips and holidays is very important and should be done for every trip you are planning, even just a weekend away. Budgeting helps you know the amount of money you will need and it is always easier to save for something when you have a target amount in mind.
Budgeting does not have to be boring. You can make it fun for yourself! Having a travel budget and sticking to it can help you feel accomplished and motivated to do even better the next time!
Travel budgeting will help you achieve the following:
- Know how much money you need to save for a carefree holiday
- It will help you feel like you are in control
- It will help you spend less by knowing what you have budgeted for
- It will reduce stress and anxiety by avoiding that shocking credit card bill after a holiday
Creating a travel budget for your dream trip
Creating a budget for an upcoming trip is much easier than it sounds. You can create a budget using an Excel document or a Google sheet. Other travel budgeting tools exist, but these are cost-effective and most people have access to either Excel or Google sheets. Some people prefer doing a paper travel budget, while others prefer digital travel budgeting. There is no right or wrong, it depends on your preferences.
Items that you need to include in your budget include anything you would spend money on before a trip, while you are on a trip or even outstanding expenses for your return. The more detailed your travel budget is, the better it is for your pocket as it reduces the chances of you not budgeting for an item.
Some expenses you need to consider in your budget include:
- Shopping (souvenirs and other fun things)
You should find out if you need a visa for the country you intend visiting and what it costs. Visa costs vary significantly between countries. To include this in your travel budget, you can easily find an estimate for visa costs by doing a google search.
This is one of the easier items to include in your travel budget for. There are a few flight sites I like to use to determine what a reasonable budget for my flights will be. These include:
I like using one of these aggregator sites since they cover most airlines making a comparison of the different flight options per airline easier. Choose one of these flight resources and do a search for your preferred destination and timing. Flights can usually be booked a year in advance. If your trip is more than a year away, just look at the same month for the current year to get an idea of what it would cost – you can always add 10% to ensure your have a buffer for flight increases in your budget. Don’t choose the cheapest flight, go for a mid-priced flight – having a conservative budget is better than under-budgeting.
This is another item that is easy to check provided you know which cities you would like to visit and how long you want to spend in each city. Some resources I like to use include the following:
Do searches for each city you would like to visit for the number of days you want to spend there. Remember to tick the amenities you want such as free wi-fi or breakfast, just to get a realistic amount per night. Another important consideration is the area you want to stay in as this could influence the nightly rate significantly. Once again, don’t choose the cheapest hotel in the cheapest neighbourhood, go for a mid-priced hotel in your preferred neighbourhood.
The next item in your travel budget should be transport. Consider the type of transport you like to use when traveling. I love using public transport such as trains, therefore I always budget for train tickets. You may enjoy driving and would prefer renting a car. Consider your preference and do a bit of research on your destination.
My favorite resource for checking transport costs between cities and countries (apart from flights) is Rome2Rio.
It is also useful to find out what your transport options in the cities you plan to visit are. In Europe, many cities have a subway-type of system that is reasonably priced and can get you pretty much everywhere. Often you can purchase a day ticket or special pass that saves you money for multiple trips or days.
To include sightseeing in your travel budget, you need to have an idea of which museums and other sights you would like to visit. Make a list and see what each item will cost you in entrance fees. Also consider the possibility of a city pass or sightseeing pass such as the New York Pass, which gives you discounts for some sights in a city.
Do you and your spouse or other travel partner prefer having a (free) breakfast in your hotel? Do you want to eat three meals a day or do you prefer to eat breakfast and supper out and have a small snack for lunch, like I do? Will you be staying a self-catering place where you can buy local produce and cook your own meals or do you prefer eating at restaurants for most meals while traveling?
All of these preferences will influence your budget for food. Make a list of the meals you need to include in your travel budget, look at restaurants you want to try (Tripadvisor is a good source for restaurant recommendatons) and look at their menus to see what the average price per meal is. Combine the total of the estimated costs per meal to include an amount for food in your travel budget.
Shopping (souvenirs and other fun things) and entertainment
This is another item where the amount you include in your travel budget depends on your preferences. Some people only buy souvenirs as a reminder of the places they visited, while others like to explore the shopping centres in more detail.
Entertainment can also vary between people. If you like to visit the theatre or clubs every night, you need to include a budgeted amount per night.
Calculating the total travel budget for your trip
Once you have done your homework and have amounts for each of these items, you can add it all together. This totalled amount is what you would need to save for your trip. It will not be an exact amount, but should give you an idea of what you should budget for.
Do you have any travel budgeting tips? Have you tried travel budgeting for?