4 Steps to Planning a Travel Budget

As much as we would like to enjoy a trip without any limits, money often comes as a significant constraint. People often travel without any idea how much they are going to spend, only to return home disappointed due to underestimating their expenses. Other people might be more conservative with their spending, significantly overestimating their travel costs and not enjoying their trip to the fullest. In both cases, planning a travel budget could help.

The idea of planning a travel budget isn’t done for a purpose of strictly following it and denying pleasures when unexpected costs arise, but rather to prepare and design a better trip. For example, I am going to London and I found a cheap flight as well as a great hotel deal. Now I might get too excited and forget that London itself is quite expensive, so I might actually spend unexpectedly more money on food and local transport compared to the flights. Knowing travel costs of a particular destination helps the traveler to set aside the right amount of money for the trip, or find a different travel destination that is more affordable. Either way, planning a travel budget improves traveling experience.

Food and drinks

Prices on food and drinks vary dramatically! For example, an inexpensive restaurant in London would cost on average $19.34, while a restaurant in the same category in Bangkok would only cost $1.76 (source: London and Bangkok). Furthermore, travelers have very different styles of spending money on food and drinks. The solution is knowing what type of food you prefer, how much do you prefer to eat and how much different types of places cost within your travel destination (e.g. street food vs inexpensive restaurant). Then you could quickly estimate how much you are likely to spend on food and drinks in a single day using sample prices at Tripcost.

Example A

Let’s say I wouldn’t need breakfast because it is provided by my hotel, then I would like to have a meal at the inexpensive restaurant and wrap it up with a dinner at a mid-range restaurant. I don’t drink alcohol, but I normally drink a lot of water. Having checked sample prices at Tripcost, I quickly estimated following costs:

$19.34 (Inexpensive restaurant) + $35.45 (Mid-range restaurant) + $1.24 * 8 (Water) = $64.71 a day on just food and drinks.

Example B

A different traveller might spend significantly less, for example:

$6.45 * 2 (McMeal) + $1.57 (Coke) + $3.38 (Cappuccino) + $1.24 * 3 (Water) = $21.57 a day.

The difference is about three times! Therefore, it is critical to know your preferences to food and drinks when traveling and estimate your costs accordingly.

Entertainment

Just like with food and drinks, entertainment costs depend on your traveling style. Do you prefer free attractions like parks, museums and towers or tourist attractions with more engaging experiences? Perhaps, you’re going to surfing, which is on a completely different pricing scale. Fortunately, prices for most attractions could be found online. In some cases, you could even book them in advance. If it seems that there is no official information about the activity, check out what travelers say about it on TripAdvisor. Basically, it is helpful to create a list of things you would like to do or visit and estimate how much they are going to cost individually.

Example A

In this example, I will experience the London Eye and the Madam Tussauds. Both tickets will cost me $51.58. I will also visit the National Gallery, which is free.

Example B

I will visit the National Gallery, the British Musuem and the Science Musuem. All attractions are free to visit.

Local transport

Once again, transportation costs depend on a particular traveling style. Some people prefer using the public transport, other people prefer using taxis or Uber. Choose what works best for you! And don’t forget about the transfer from the airport.

Example A

One-off costs: $45 (Return airport transfer from Gatwick Express) 
 Daily costs: $6.5 (Public transport) + $20 (Taxis) = $26.5 a day.

Example B

One-off costs: $45 (Return airport transfer from Gatwick Express) 
 Daily costs: $8.5 (Public transport daily cap)

Flight and hotel costs

The easiest step of planning a travel budget is estimating flight and hotel costs because these are usually booked in advance. We recommend using cheap flight search engines like skyscanner.com, kayak.com or jetradar.com for finding great flight deals. You could also set up a price alert and receive email notifications when prices drop. When it comes to hotels, we recommend looking at sites like airbnb.com, booking.com and hotellook.com.

I’ll exclude flight and hotel costs from the examples because of too many variations due to different origin locations and seasonality.

Assuming our trip in London will last 4 days, we can estimate that I would spend $461.42 excluding flight and hotel costs in Example A. In contrast, I would only spend $165.28 in Example B. The difference is more than noticeable, but having this insight helps me to design a better trip that I would not only enjoy, but also can afford.

We are quite passionate about estimating travel costs at Tripcost and we are doing our best to help you enjoy your trip to the fullest. Get in touch with us if you have any questions or suggestions, we are always happy to help.


Originally published at www.tripcost.org on July 9, 2017.

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