Whether you’re a travel novice or a seasoned veteran globetrotter, we can all likely agree that budget planning for travel is hard! Things can quickly get out of hand if you don’t have a budget plan to keep your trip costs down. And we all want to travel as often as possible, so ensuring you have a rock-solid travel budget can help you to afford even more trips in the future.
If you are looking at embarking on a long-term trip, it’s important to keep in mind that traveling for extended periods of time is not cheap, no matter where in the world you decide to go. It’s crucial to manage your money during these types of trips; otherwise, you could end up flying through your savings by the end of it (or earlier!).
Whether you’re flying to Mombasa, New Zealand, South America, Southeast Asia, or Morocco, one must of course consider the costs of a plane ticket and hotel. But there are other daily expenses to consider as well, such as food, transportation, souvenirs, activities, etc.
We believe that everyone should consider budget planning for travel. Whether you are staying in one place for 12 months or moving from one place to another, having a plan is essential for financial security and to ensure peace of mind during your travels.
To address these concerns, we have created the ultimate guide for budget planning before a trip and what considerations one needs to take into account while planning a reasonable travel budget.
What is a Travel Budget and Why is Having One Important?
A travel budget is a set amount of money you spend on your trip or vacation. It can help you track where your money is going and ensure you don’t spend more than you planned. The budget also helps you plan your trip before going on it so that you can spend less time planning and more time enjoying yourself once you’re in your destination!
The concept of “travel budgets” is not just for people who want to save money, but also for people who want to ensure they don’t overspend on something unnecessary during their travels. It’s a great way to keep your spending “in check” and to be able to quickly and easily know if you can afford a purchase or not.
The Best Ways To Plan Your Budget For Travel
Each traveler should always have a plan for how to best allocate their money (especially when traveling abroad), such as how much they plan to spend on food, accommodation, and transport.
Budgeting for your trip can be easy if you know what to expect. Here are a few things you need to consider when planning your trip budget:
1. Research The Destination You Are Visiting
The first step in budgeting for travel expenses is research, research, research! Find out the average costs of food, transportation, accommodation, and entertainment at your chosen destination.
This information can give you an idea of what costs you may encounter while traveling. It can also help you decide if you need to save more money before leaving or if your current savings set aside for this trip will suffice. Or, if you’re planning on working while abroad, this research can help you get a feel for if your current income will suffice during your trip or if you should set some more aside.
2. Determine Your Travel Expenses
When determining your travel expenses, the first thing to do is to calculate the cost of airfare or other methods of transportation. For instance, if you are taking a road trip and traveling by car, you need to know how much gas will cost. When calculating your total cost, don’t forget to include parking fees and tolls, too; these costs can sneak up on you and can add up over time.
If you are staying in hotels or AirBNBs during your trip, consider the cost of renting a room in your budget plan. You also need to consider more “hidden” types of charges (such as phone charges, if you will need access to one while not using Wifi).
You should also include daily expenses, like food and drinks, clothing, etc., in your travel budget plan. The more days you plan on spending in a particular place, the more money it could potentially cost because items can become more expensive seasonally, such as if there is a rush for products and services like groceries and hotel costs during peak seasons.
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3. Create a Separate Bank Account or Allocate a Travel Fund
Setting up a bank account with your financial institution specifically for your travel expenses is a great way to keep track of everything that goes into your trip. You can set up automatic deposits so that money comes out of your paycheck and into your travel account before it hits your general checking account. This makes it easier to plan and see how much money you have left after each paycheck so that you can adjust accordingly if needed.
On the other hand, it may be easier for some people to put aside money every week or month into an account specifically for travel expenses instead of setting up automatic deposits. This way, you’ll always be aware of exactly how much money is available for travel at any given time and can adjust accordingly if necessary.
4. Use a Budget Planner
Travel budget calculators can help you determine how much money you need for your trip. The most popular travel budget calculators are Traveltipy and MoneyFit. Both sites offer travel budget calculators that allow you to enter details about your planned vacation and get an estimate of how much it will cost in total. This information can be used as a starting point for creating a realistic travel budget plan for your circumstances.
Bonus Point: Use Excel as a Travel Budget Planner
Excel spreadsheets are great resources for budget planning for travel, and using it for this purpose can make a lot of sense, especially if you’re already familiar with Excel and use it for work.
If you’re new to Excel, consider taking an Excel basics training course to learn how to create spreadsheets, input data, and perform calculations. Once you understand Excel, you can easily set up a budget calculator for your travel expenses.
Simply create a spreadsheet and input your estimated big expenses for each category, such as plane tickets, hotel rooms, food, transportation, and entertainment. Then, use the built-in formula tools to calculate your total estimated expenses and compare them to your budget.
This will provide you with a clear picture of where you can cut costs or adjust your budget to ensure you have enough money to cover all your travel expenses and have a stress-free trip.
5. Consider the Cost of Transportation
Transportation is one of the biggest expenses you’ll pay for during travel. However, there are plenty of ways to save money on transportation while still getting where you need to go.
Your Tier One Travel Consultant can help you find the best (and most affordable) flight options for your trip. They will compare flight options for you that work with your schedule and find the best prices. Their help will be especially useful if you’re planning on taking multiple flights or have a more complex itinerary in mind.
Choosing budget hotels is another way to save money when traveling. Or, consider traveling during the shoulder season, or low season of your destination. Many hotels offer lower rates during slow periods, such as weekdays or off-seasons. Also, consider booking hotels that offer free breakfast and free WiFi access. These amenities can also make all the difference when traveling with little ones!
Moreover, travel consultants can help you find the best accommodations for your budget as well as provide other services like transportation and sightseeing tours at affordable prices. Don’t hesitate to reach out to us when you’re ready to plan your trip!
6. Include the Cost of Travel Insurance
How much should you budget for travel insurance? If you’re planning a trip, it’s important to know how much coverage you need and how much the insurance premiums will cost.
When booking your flight, hotel, and car rental, it’s easy to overlook travel insurance. You may not think about it while planning your dream trip, when something goes wrong, like an injury or illness that prevents you from enjoying your vacation. That’s when it becomes clear that travel insurance is essential!
Travel insurance provides peace of mind and protection against unexpected expenses such as trip cancellations or medical emergencies. It also covers lost or stolen luggage, which can be expensive to replace. Travel insurance costs vary based on how long you’re staying away from home, where you’re going, and whether or not you’ll be traveling during peak seasons (when prices tend to be higher). Our Travel Consultants have some excellent travel insurance options for you and will make sure you’re covered and can have complete peace of mind.
7. Plan for an Emergency Fund
The emergency fund is a term used to describe a separate bank account that you keep in case of an emergency. You put money in this account and use it only for emergencies, so you don’t have to tap into your normal budget, savings, or investments.
You should always have an emergency fund set aside before booking your flight or making travel plans. An emergency fund is separate from your travel fund and we recommend that it should consist of about three months’ worth of living expenses. However, consider including more than three months’ worth of living expenses in your emergency fund if you have dependents or own a home.
If you don’t already have an emergency fund set up, consider opening an online savings account with an online bank. These banks offer high yields on savings accounts, which can help grow your savings even faster than traditional banks do.
8. Stay Mindful Of Your Daily Expenses
When planning a trip, it’s easy to get caught up in the excitement and forget about the day-to-day expenses that can add up quickly. To stick to your travel budget, it’s crucial to stay mindful of your daily expenses. Here are some of our top tips to help you save money while enjoying your trip.
First and foremost, meal costs can take up a large portion of your travel budget. To save money on food, cook at home (if you have access to a kitchen), and research affordable restaurants. You can also try to eat from local street vendors or food stalls instead of fancy restaurants. These local options not only offer authentic and delicious food, but they are also often much more affordable!
Additionally, when staying in a hotel, you can consider eating at least one meal per day at your accommodation, whether this is making a quick and easy breakfast in your hotel room or taking advantage of the complimentary breakfast provided. Also, watch out for daily expenses like fancy coffees, which can quickly add up!
Another major expense during travel is accommodation costs. To save money on this, consider booking budget-friendly hotels or hostels or opting for alternative accommodations like Airbnb or vacation rentals. Also, consider splitting the cost of a hotel room with friends or family members if you’re traveling in a group.
In addition to being mindful of your meal and accommodation costs, it’s important to consider other daily expenses like transportation. Using public transportation instead of private cabs or rental cars can significantly reduce travel costs. Not only is it more budget-friendly, but it also offers a unique experience and allows you to immerse yourself in the local culture. To help plan your transportation expenses, consider downloading local transportation apps or researching beforehand to determine the cost of transportation to your destination.
Finally, be proactive about finding cheap activities and attractions to visit. Do your research before your trip and list free or low-cost activities that you can participate in, such as visiting local parks or museums. Taking advantage of discounts, coupons, and special deals can also help you save money while having a great time.
In Conclusion, Be Realistic With Your Travel Budget
Budget planning for travel is an important part of preparing for a trip and making it an enjoyable experience. Whether you’re a solo traveler or traveling with a group, setting a realistic travel budget is crucial to ensuring you can see and do all the things you want while also having peace of mind.
From accounting for major expenses like plane tickets and hotel stays to budgeting for daily expenses like meals and transportation, there are many things to consider when planning a trip. It’s a good idea to start by researching different destinations and determining the best way to pay for your expenses, whether with a credit card, a debit card, or a separate travel fund.
With a solid plan in place and some smart spending choices, you’ll be on your way to having a great trip and coming home with memories to last a lifetime!
LET US HELP YOU PLAN YOUR NEXT GETAWAY
When you’re ready to start planning your next trip, contact one of our TierOne Travel consultants. They have extensive experience in life-changing travel experiences and will be able to craft something incredible that is suited to your unique needs!
One call; endless experiences!
“Travel is the only thing you buy that makes you richer.” – Anonymous