Five Step Guide to Creating a Travel Budget

Making a travel budget isn’t always fun or exciting, but a good budget will help you manage your expenses effectively so that you can have a great trip without overstretching your wallet. I’ve written up a few tips and tricks that I use when making my travel budget that’ll help you when planning your next adventure! And after you have created your travel budget, these are my tips for sticking to it.

1. Know your destination

Budgeting for London or San Francisco is going to be a lot different than budgeting for Vietnam. It’s important to do your research and prepare yourself for what you will realistically need to be spending and plan your budget accordingly. Don’t assume you can find accommodation in London for $10 per night because you did in Hanoi. Your budget needs to be tailored for each trip you take.

2. Check the currency exchange rate

When making your budget and doing your research, make sure you’re paying close attention to the currency exchange rate. Decide beforehand if you’re budgeting in your currency or the local currency of the destination and stick with it. Mixing your currencies can lead to costly mistakes down the road!

3. Set a goal

While you may not be able to get the same bang for your buck everywhere, it’s good to set general goals and see how well you can meet those when making your budget. If you’re doing a ten-day tour in Paris, Rome, and Warsaw, you can expect that you’ll be spending more in Paris and Rome and less in Warsaw, so an overall goal of say $20 per night for accommodation will help you determine what is reasonable for you. Maybe you have to spend $30 per night in Paris to get that great Airbnb in the city centre, but in Warsaw, you’re only spending $10 per night so it’ll average out.

4. Budget for the whole and the parts

A good travel budget should have an overall budget for the total amount you want to spend on your trip and smaller budgets for individual parts. Remember your ten day (and ten night) tour of Paris, Rome, and Warsaw? You’ve already decided you want to spend an average of $20 per night on accommodation, so that’ll be at least $200. If you’ve set your total budget to $1,500 including flights, that leaves you $1,300 to divide between flights (to and from Europe), transportation or flights within Europe, food, activities, and any extras you want to buy.

5. Add a contingency

Stuff happens. You miss your flight, your bag gets lost, or your hostel loses your booking. Make sure you’ve included a contingency in your budget for emergencies. A good rule of thumb is ten per cent of the total. So for your ten day trip to Paris, Rome, and Warsaw, $150 of your budget would be reserved for emergencies. If at the end of your trip you haven’t touched your contingency budget, you can apply it straight towards saving for your next trip.

Those are my quick and easy tips for making your best travel budget. Most importantly, remember to be realistic with yourself about what you are comfortable spending and how you are comfortable travelling. Not everyone is comfortable in hostels or Airbnb, and if you can afford to book a hotel without exceeding your budget go for it.

Travelling should be fun, so make your budget and get adventuring. And don’t forget to check out my tips for sticking to your travel budget.