How To Build A Basic Travel Budget

When you’re thinking about traveling it’s always a good idea to build a budget. First you have to figure out how much you can spend and how much time you want to be away. This is a very simply guide to building a basic budget, and this is what I use most of the time when I plan on traveling to a new location.

You can build a budget in two ways. The first is go build a cost estimate based on where you want to go, then you know how much you need to save up for a certain trip. The second is to build a spending estimate based on how much money you plan to spend, if you already have the money.

Lets start with what I call a spending estimate:

First figure out how much you want to spend or can afford to spend. This will be your “Available Funds”. Divide this by the total time you plan on traveling (in days):

Available Funds / Total Time = Daily Budget

For example, if you currently had $2,000 for a 15 day trip, this would look something like:

$2,000 / 15 days = $133 per day

Once you have your daily budget you can get a better idea of how much you can afford to pay for a hotel every day, as well as how much you’ll have in your pocket for other expenses. The most common things you’ll have to pay for on a daily basis are food, transportation, and lodging. Anything extra like beers, cover charges for bars and clubs will be extra expenses that will vary throughout each week and each day. I like to break down expenses into three different areas:

#1: Lodging.
#2: Food and transportation
#3: Extras (Beers, cover charges, tourism excursions, souvenirs etc.)

Generally speaking I allocated one third of my daily budget to each of these categories. So if we go by the above $133 daily budget, I’d probably be looking for a hotel or hostel that costs $44 or less. If I cut back on the lodging costs then I have more to spend on food, transportation and extras. At the same time, I allocate about $44 per day for food and transportation and another $44 per day for extras.

Once you have a basic budget you have a better idea of how much you can afford to spend each day. Once you get to where your going make sure you at least keep a mental note of sticking to your budget. A budget isn’t any good if you don’t stick to it, and the whole point of making one is to make sure you don’t overspend.

I’ll be making a more detailed budget creation tutorial in the near future but this should give you a better idea of how to budget and estimate costs before you travel.

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