YAY, so you want to create a travel budget, do ya? That means you’ve decided to make travel a priority and you’re wanderlusting after some amazing destinations. I totally get it, this has been me my entire life. But to make those dreams a reality, you gotta budget. Travel ain’t free ya’ll.
Side note: I actually don’t have a country accent, but I do like to throw out a “ya’ll” every now and then. What can I say, it entertains me. 🙂
Anyways, yes, a travel budget is super important. Lucky for you I‘ve put together 4 easy peasy steps to create a travel budget. However, I’m going to be honest with you, it works best if you already know (or at least have an idea) of where you’re wanting to go and for how long. I’m not saying you need to plan out your trip day by day. But you at least need to have a general idea of where you want to go.
And before you ask it, no, it doesn’t matter how long you plan on traveling. I have traveled long term (4 months is the most for me) and have also traveled within the 2-week window my work gave me for vacation. No matter the length of your trip, the below steps still apply. I hope you enjoy creating your travel budget, and more importantly, I hope you have a blast going on your dream trip!
How to Create a Travel Budget in 4 Easy Steps
Step 1. Choose a Total Travel Budget Number
The first thing you need to do is choose a total travel budget you are comfortable with spending for your vacation. This can be a generic “just throwing it out there” kind of number.
By the end of this post you will likely end up adding to or taking away from this number, so don’t stress. You just need to have some sort of ball park number that you’re comfortable with spending on your trip.
Pro Tip: It’s best to choose a number that’s higher than you think you’ll need. This way you can have a safe cushion in place for unexpected travel expenses.
Step 2. Prioritize What’s Important to You
The wheels have probably already started spinning on what’s important to you during this trip. Are you tired of the nickel and diming practices of budget airlines? Maybe business class is important to you. Have you stayed at one too many hostels? Then budgeting for a fancy hotel might be important to you.
For me, I like to do a mix and match. I’ll eat street food or at budget friendly cafés throughout the day, then enjoy a nice sit-down restaurant in the evening. Or I’ll stay in Airbnb’s and hostels for the majority of the trip, but then splurge 1 or 2 nights on a nicer hotel.
I also prioritize activities higher than flights, accommodation, and food. For example, when I was in Hawaii it was important for me to take a helicopter tour of the island, or in Mexico to take a hot air balloon ride of the Teotihuacan pyramids. These were non-negotiable. However, I stayed in hostels and Airbnb’s to balance my budget. I also ate street food most of the time in Mexico, but let’s be honest, the street food is amazing there, so it was hardly a sacrifice. 🙂
Step 3. Do Basic Price Research
Now that you’ve prioritized what’s important to you, we need to do some basic research to see if your total travel budget from Step 1 is going to work. Remember, you’re not booking anything yet. We just need to know if this total budget is a feasible amount for your trip.
Pro Tip: Remember to factor in any exchange rates. For example, if you’re going to Italy, their currency is in Euros. So, if an average hotel is 120 Euros, then (for Americans) you’ll need to budget for $147 USD (according to the exchange rate at the time of writing).
Do some basic research on the following:
Even though you may be hoping to get an awesome flight deal, for budgeting purposes, just check how much an average flight will be. Are you traveling to multiple cities? For example, if you are going to Peru, don’t just factor in the round-trip flight into Lima. If you plan on going to Cusco to visit Machu Picchu, include that flight as well.
Be sure to factor in even smaller transportation costs such as bus, taxi, metro, etc.
Are you wanting to stay in a bungalow right on the beach, or will you be staying in hostels/Airbnb two streets away from the beach?
If you’re traveling to multiple cities, be sure to think about how expensive each location is individually. When I backpacked around Southeast Asia, a hotel with a pool in Vietnam was $20, however a budget hostel in Singapore was $30. Do your research and try to be aware of these location dependent price differences.
Is this the kind of trip where you want to splurge on romantic rooftop dinner with a view? Or are you planning on making trips to the local grocery store and eating street food?
Again, you don’t need to look up the specific restaurants that you want to eat at, just gather a ballpark number of what it costs to eat out.
Are there some must see attractions that are non-negotiable? Look up the price so you have an idea of how much they cost. Don’t get too bogged down on this, we’re just looking for general things you want to do. For example, if you’re going to Paris, you’ll likely be going to the Louvre.
Here are some other expenses you should consider and budget into your travel budget.
- Do you need a visa to visit this country?
- Do you need travel insurance?
- Do you need any vaccinations?
- Do you need a phone for international travel?
- Do you plan on doing any shopping on this trip?
Step 4. Put it All Together
Now that you have a general idea of how much you need to budget for each category of your trip, did you go under or over the estimated total travel budget from Step 1?
If you went over, then you have one of two options;
- Increase your travel budget
- Find out the areas you can cut back. Return to Step 2 and re-prioritize your trip. Which areas are you able to cut back on in the budget? If you don’t want to cut back anywhere, then consider pushing out your trip until you’ve saved more money. Or, you could always go somewhere else.
If you went under, then WOOHOO! You also have one of two options;
- Stay under budget and save the extra money for later
- Return to Step 2 and re-prioritize your trip. Are there any activities you decided not to do, that you can do now? Do you want to stay in a fancier hotel? Upgrade if you want!
YAY, you have now created a travel budget! Congratulations, this means is you now know exactly how much you need in order to fund your dream vacation. Is it more affordable than you thought? If not, now you know how much you need to save in order to make this trip a reality.
What steps do you use to create a travel budget? Love to know below!
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Great tips for travelers, amateurs and pros alike! I totally agree that it’s better to overestimate budget items, especially with different currencies.
Thanks Mia! Yes totally agree, always better to overestimate and have money left over than be spending more than you thought you would! 🙂
Simple and straightforward! Great tips, Tiffany!
Thank you! Yes travel planning totally doesn’t have to be complicated. 🙂
These are really useful tips – I just spent the last few months travelling and I am very glad I overestimated my travel budget! I definitely needed all of the extra money I saved!
Yay I totally agree, overestimating for the “just in case” is so helpful!
As someone who travels as much as possible, this is such a helpful post to realign my thinking around budgeting.
YAY that makes me so happy! So glad it is useful 🙂
My comment is completely unrelated to the post (which is great). You may not have a country accent but you are southern, so using y’all isn’t all that surprising. Also, I use it and I like to think I’m secretly influencing you. 😉
Hahaha yes that is it, you are secretly influencing me! 🙂 🙂