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How to Create a Travel Budget

You’ve made a goal that you want to travel abroad, but how do you go about determining how much you’ll need to budget for your trip? Budgeting – that fine art of determining how much you have, how long it will last, and how can you stretch it. I come from a business background, and I have managed million dollar budgets for fortune 500 companies, but sitting down to plan my travel budget for a year was quite a task.

Maybe your trip is only two weeks or maybe it is 6 months; you can approach these budgets in the same way. If you are traveling longer term though, you will need to adjust it as you go and test your assumptions. Before I took off for my year long journey I sat down and tried to create a rough budget of what I thought I would spend. The problem was that I had never really traveled long term before, so I had a hard time determining where to start when I didn’t know where I‘d be staying from one day to the next for a whole year.

In Excel (or a piece of paper!) you make a list of each city/country you plan to visit. Add the following information: Number of Days in a destination.  If you don’t have an exact number, then take an educated guess. After all, it’s an estimate and once you know more you can adjust it later.  Then enter the average cost per day for each destination and multiply times the number of days in the destination.  

Average Cost per Day:

I tried to gather this information for some standard categories: Lodging, Food, Drink, There’s a great website widget (below) that allows you to enter a destination and it will tell you what the average cost per day (budget, medium, and luxury) is for lodging, food, and drink. Granted, you will need to see what it produces, and then adjust it if you think it is high or low; however, it will provide you a good starting point!

 

Next you need to estimate your one time costs for a trip

One time costs for a destination:

Internal Transportation: Try to put a dollar amount in your budget for any internal transportation you think you will need. Include things like local buses, trains, taxis, ferries, boats, cars…you get the idea. Granted, your not a psychic, there was really no way you can know for certain what transport you’ll be taking, and what the cost of it will be. However, try to take into account how much you intended to move around the country (are you staying in one city or region – or are you traveling the whole country). Then error on the high side and choose a dollar amount based on approximately how much transportation you think you are going to take. 

Tours: If you have planned a tour or an activity in a particular destination, then you usually know the cost of that activity; add it to your spreadsheet. Activities can range from volunteering expenses, to language school tuition, to sailing classes, group tours, and cooking school. Just make sure that you take into account if the ‘activity/tour’ includes food, lodging, or transportation expenses and adjust your budget accordingly.

Other: If you are a shopper, then you may want to add a category for this too.

You may also want to do a little research and see what a visa costs for the country and put that expense into your budget as some countries, like China, can be quite expensive.

One time Costs for the entire trip:

There are also one time costs for the entire trip no matter what country you are in. Some of these things could be medical or trip insurance, airfare, and costs to keep a storage unit back at home. When I traveled, I created a budget this way and would come back to it occasionally as my plans changed or as I learned more details about my plans or costs. I had a starting amount in my checking account and would see how I was tracking on my budget based on my current balance. I used a single credit/debit card that would go against that checking account every time I used it. This made it easy to track all of my expenses as they all were against one account.

As I said, I wasn’t too terribly anal about this, but the process of making a budget is a good one as it really gets you to think about the various expenses you may encounter. Plus it focuses you on the trip to come! If you have other methods of budgeting travel, please feel free to share them with the circle!