No matter who you are or how much money you have in your bank account, everyone needs to budget when they’re on a trip!
When it comes to travel, the last thing most people want to think about is the budget. Who wants to spend valuable time on their vacation thinking about money? It may be a bit of a taboo topic, but it’s also super important. The last thing you want to do is come home from a trip with a mountain of credit card debt, so let’s talk about how to be wise with your money while traveling!
Choose a Destination That Fits Your Budget
This is one of the most important tips I can offer you when it comes to budgeting—consider where you are going! Some countries are more expensive than others, and some are cheaper than others. Unless you have a specific, fixed destination, you should choose a destination that is on the cheaper side to make your money stretch as far as possible.
For example, say you want to go to Asia, but you don’t have your heart set on where. Your dollar will go much further in a country like Taiwan than in Japan, which is much more expensive. It’s usually possible to visit the region you want without breaking the bank if you choose your destination carefully!
There are lists and ranking systems online of which countries are cheapest vs. most expensive, and these lists are updated all the time. I’m going to share from my own experience which countries are more expensive and which tend to be cheaper.
Some expensive countries and regions include:
- Scandinavia (Norway, Sweden, Finland, Iceland, Denmark)
- Australia and New Zealand
- Western Europe (Austria, Belgium, France, Germany, Liechtenstein, Luxembourg, Monaco, Netherlands, Switzerland)
- The United Kingdom
- Pacific Islands (Fiji, etc.)
- Singapore, Japan, South Korea, Taiwan, Hong Kong
- The Caribbean is also insanely expensive.
- Africa is the most expensive continent! (Many of the nations aren’t very touristy, so the hotels/restaurants can charge whatever they want. Logistics are VERY pricey in Africa.)
- Parts of South America are really expensive, like Chile, Argentina, Brazil, Uruguay
If you’re on a strict budget but still want to explore the world, don’t worry—there are still options! Some cheaper regions and countries include:
- Eastern Europe (Belarus, Bulgaria, the Czech Republic, Hungary, Moldova, Poland, Romania, Slovakia, Ukraine)
- Central Europe
- Czech Republic
- The Balkans (Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Kosovo, Montenegro, North Macedonia, Romania, Serbia, and Slovenia)
- The Baltics (Estonia, Latvia, and Lithuania)
- Southeast Asia is very affordable (India, Myanmar, Vietnam, Thailand, Cambodia, Philippines, Indonesia, Bangladesh)
- The Americas (Canada and the United States) are pretty expensive in the big cities, but if you get out in the countryside, that usually makes it really affordable.
- Central America is pretty inexpensive (Guatemala, El Salvador, Nicaragua, Costa Rica, Panamá, Honduras, México)
- Parts of South America: Venezuela, Columbia, Ecuador
Hopefully, that really quick breakdown of what’s expensive and what’s more affordable helps you out! If you focus on traveling to cheaper countries, your money will definitely go much further, which is why I recommend traveling to Southeast Asia and the Middle East if you’re on a tight budget.
(Also, check out my articles on How to book cheap flights or How to Use Travel Reward Points if you need help maximizing a trip on a tight budget!)
5 Things You Have to Budget For
Once you arrive in a country, what will you need to spend money on? Knowing this ahead of time is key to budgeting enough for your trip, so let’s talk about how I break it down into five major spending categories that you need to plan for.
- Transportation—this includes all of your boats, trains, taxi rides, Uber rides, bicycle trips, horses, camels, or any other way necessary to get from point A to point B. Transportation will probably be your most significant expense, so keep that in mind!
- Accommodations—anywhere you’re sleeping, whether it’s Airbnb, hotels, hostels, guest houses, cabins, etc. This will be the second biggest expense, but it can definitely be done on a budget, so don’t waste all your money on where you sleep at night!
- Food & Drink—everything that you consume throughout the day. (This excludes alcohol and beer, which I include with activities/entertainment.)
- Activities/entertainment—whatever you like to do personally; entertainment, movies, all that kind of stuff is grouped into this category. I include hobbies like scuba diving, rock climbing, skydiving, bird watching, etc, as well as things like going out to bars or clubs.
- Extra Expenses—all those things that you don’t expect, including travel delays, visas, laundry, trip itinerary changes, baggage fees, local sim cards for your phone, internet access, etc. There will be expenses you didn’t consider, so make sure you have some wiggle room in your budget for it!
Staying on a Budget During Your Trip
Now, we’re going to get into the nitty-gritty details about budgeting yourselves on any given trip.
Personally, I exclude flights from my trip budget because I buy them in advance (so to me, that feels like a separate expense from the trip itself.) Some people include them in their budget because it’s “part of the trip.” In the end, it’s really up to you.
Let’s say you have a month-long trip, and you have $3000 to spend. How do you make it last the whole month?
Sample Budget Breakdown:
Decide on a total budget for your whole trip, i.e., $3,000. Then, based on the length of your trip, give yourself a daily budget, say $100. (Make sure that when you do this, you leave some room for those “extra expenses” we talked about before—don’t just divide your total budget by the number of days you’ll be there. Always give yourself a buffer!)
Keep a mental note of how much you spend on food and how much you’re paying for other things, and prioritize what you like! If you spend less than $100 one day, you can spend more the next day, if you want (and vice versa!)
Prioritize What You Want to Do With Your Time
Some days you might stay in your hotel and work all day (especially if you’re a digital nomad or work online like I do.) The budget for a work day like that would carry over to the next day because you didn’t use it while you were working.
On other days you might go crazy, go on an excursion or adventure and spend $200. In the next few days, you’ll want to just take it easy and don’t go crazy spending money to balance things out. Just make a mental note about it; you can even write it down if you want.
If you want an app to help you out with budgeting, I use TripCoin; it gives you an overall picture of the whole budget for your trip (and the best part about it is that it’s free!) Personally, I don’t want to count every penny; it’s such a waste of time to me. I just want to have an overview of where my budget is at and how much I should aim to spend each day.
You should absolutely have your moments where you go out and party all night, go scuba diving, go rock climbing, or do other things you want—just do it all in moderation, not every day. Go with the flow, and plan to make sure you get to do what you want to. After all, having fun is the most essential part of any trip!
I would recommend that you never say, “oh, I’m not going to do that fun thing I want to do because it’s too expensive.” If it’s something you really want to do, DO IT! Just take it easy over the next few days in order to even your budget back out.
At the end of the day, you are responsible for the trade-offs involved in traveling.
Know Your Limits
My best advice is to know your limits and don’t exceed them. You don’t need to come home with a huge credit card bill you weren’t expecting because that’s not what traveling is all about. It will actually hinder your ability to go on your next trip, and that’s not at all what you want!
Budgeting may be a taboo topic, but it’s really quite simple if you follow the way I broke it down for you. Just know how much you’re spending daily, and make sure that you can stay at or below that limit. If you do go above your daily limit, then just make sure to even it out in the long run. (And always leave a buffer in the budget for unexpected expenses!)
You’ve got this! Utilize these tips, and always keep the big picture in mind when it comes to budgeting for a trip.