Plan a Travel Budget: Comprehensive Guide

One of the most complicated aspects of planning any type of dream trip is designing the budget you will need to make it come true. This is especially difficult if you are shaping a long trip, or if it is your first time trying to do it. But don’t worry! We have created this comprehensive guide to plan a travel budget. It’s easy to follow, and it adapts to all kinds of travelers and all kinds of adventures. Let’s get started!

How to Plan a Travel Budget

You must believe that we are crazy if we say that the same guide on how to plan your budget adapts to all kinds of travels and travelers. But I assure you it does!

Of course, a 2-week trip to an exclusive destination, where you are looking for comfort and luxury, is not the same as a 2-year trip around the world in the most economical possible way.

But still, whatever style of travel you are hoping to undertake, this guide will help you establish a realistic and easy-to-follow travel budget.

The secret is to consider each aspect of this guide carefully and bring it to the most personal level possible. What do I mean? That you’ve got to analyze it trough.

I’ll give you a few basic tips and reflection questions, and your task will be to customize your responses as much as possible.

From this, you will get two things: the first, a realistic budget that will help you save, plan, and enjoy your trip to the fullest. The second, a greater understanding of the expectations you have of this trip.

So let’s begin to plan your travel budget!

Plan a Travel Budget Step by Step

Budget for flights and transportation

The first aspect that you should consider to plan a travel budget is how much money you will spend on mobility.

The most important thing is to consider how you will get to your destination and how you will return home (if you do return), and what is the price you will have to pay for those trips.

Are you buying a plane ticket? Maybe a bus, a boat, a cruise ship, a train? Whatever it is, do the maths and consider that price as the starting point of your travel budget.

But don’t just leave it there. Are you planning on seeing different places? Then you will have to add the costs of the several tickets you will need to purchase.

But that doesn’t mean you will have to buy them all ahead! As I told you on this guide to plan your trip I wrote, it’s always good to leave some room to be spontaneous. You could simply take the prices into account and buy them later.

Consider the travel insurance cost

This is a very important point that most travelers forget. Hiring reliable travel insurance is essential in today’s world, especially in the post-coronavirus world.

I understand that it is not cheap at all, but sometimes cheap is expensive. You don’t want to suffer an accident, cancellation, or unforeseen event and have to deal with your out-of-pocket expenses abroad. That would make your whole budget go to waste!

So when you are starting to plan your travel budget, make sure to include the cost of international travel insurance. If you are wondering how much that could cost, check out the World Nomads simulator below.

And if you need any help regarding travel insurance companies, I recommend you to read also the post that Andres wrote about choosing the best travel insurance.

Plan the accommodation budget

Let’s review. Until now, you have included in the plan of your travel budget the costs of mobility and travel insurance. It is time to consider how much you will spend on accommodation.

The first thing I recommend you do is to start by defining the type of accommodation you are looking for. Do you prefer an all-inclusive hotel or a more relaxed hostel? Maybe something in the middle…

Then, I recommend doing some quick inquiries. You can search in sites like Booking or Hostelworld to see what prices are like for the accommodations that you would like in your destinations.

Again, that doesn’t mean you have to book your whole stay! Especially if you are going on a long trip. But I do suggest to book at least the first night at every new destination you will reach.

Once you have enough information about how much accommodation can cost, you should do the maths and multiply the values for the total of nights you will be traveling for. Remember to add a little margin, just to be sure.

If the numbers you’ve reached are high, don’t panic just yet! Remember there are lots of ways to decrease your accommodation budget. You could use Couchsurfing, or consider volunteering abroad to stay a few weeks for free.

Feel free to check out this post I wrote about how volunteering at hostels works.

Food and beverages budget

This may be the most inaccurate aspect when starting to plan a travel budget. Because, how can you know in advance how much you will spend on food and drinks?

The truth is, you can’t. But you can come close to a realistic number for what you will spend on eating and drinking daily.

Andres recently discovered a very useful site that lists the costs of living in different countries and cities around the world. The site specifies average prices for everything, from a water bottle to a house rental per month. The site is called Numbeo.com, feel free to check it out whenever you need it.

Another important point is to define how luxurious you prefer your diet to be. Are you going to cook, or will you eat out every night? Do you dare to try local dishes and street food, or will you always go to the most expensive restaurants?

The answers are entirely up to you, but let me give you one tip: the tighter you budget, the longer you can travel with the same money.

Plan the entertainment budget

This is another unspecific aspect to cover when you begin to plan a travel budget. It can give you some trouble, but it’s still doable.

This time, you’ll have to do a little more research to come up with a realistic number for what you can spend on entertainment during your adventure.

Let’s start by defining entertainment. Within this item, I suggest you include all kinds of guided tours that you want to do, as well as tickets to monuments and museums, party nights, cocktails on the beach, visits to the spa, and everything you can think of related to having fun in your destination.

What I advise you to do is start by planning your itinerary. Do some research about what there is to do in your destinations and make sure to list everything you don’t want to miss. Once you know that, you can turn to the wonderful world of the internet to find out average prices for those activities.

As always, leave a small margin in the budget. Nobody enjoys having every cent counted and not being able to buy that beer when they want to.

Leave a budget margin

Ok, we are already reaching the end. By now, your travel budget should be taking shape.

You already know how much you will spend on travel health insurance, transportation, lodging, food and beverages, activities, and entertainment.

If you have been working on a daily budget, multiply that value by the number of days you will be traveling. If you’ve created your budget per week, for the number of weeks, and so on.

The important thing is that, whatever number you get to, you add a small amount to it. What do I mean? Let’s say, for example, you came to the conclusion you will need $20 per day to cover all your expenses. Then make it $25. I know it’s a lot of extra money at the end, but it’s certainly better than being counting every cent.

After all, even though you are looking to economize, you are traveling to enjoy, and not to be needy abroad.

Ready to Plan a Travel Budget?

Okay, guys! We’ve come to the end of these complete guide to plan your travel budget. I’m sure that, if you went through every step, you have by now came out with a realistic travel budget to follow during your adventure.

However, if you have any questions, use the comment section below. We’ll be happy to help.

Have a great adventure!