Planning a Trip Budget that Works for You

You’ve chosen your dream destination. You’re finally going to take that trip to Paris, Rome, or Hong Kong. Now, you have to figure out how much all of this is going to cost. You need to think about planning a trip budget.

But where do you start? In this article, we’re going to discuss the ins and outs of planning a trip budget. And I’m going to lift the curtain on how much we spent on one of our trips. I know. This is exciting stuff.

This post includes affiliate links. If you make a purchase through one of these links, I may earn a small commission at no additional cost to you. As an Amazon Associate, I earn from qualifying purchases. See disclaimer. 

First step: making decisions about your travel budget

How do you decide where your travel dollars should go? Your personal preferences will dictate a lot of this.

• Do you value luxury accommodations/hotel stays and fine dining, or are you more interested in investing in comprehensive tours and once-in-a-lifetime experiences at your destination?
• Would you rather do one more expensive trip every now and again, or do you explore the world on a smaller budget so you can travel more frequently?
• Do you prefer international travel over domestic trips?
• Do you rely on car rentals when you travel, or do you prefer to walk and/or use public transportation?

Asking yourself these kinds of questions will clarify the best way for you to allocate your travel dollars in the way that works best for how you like to travel.

And be honest with yourself about what you want. There’s nothing inherently virtuous about spending as little money as possible on travel. Nor will your trip automatically be better just because it’s more expensive.

The best travel budget is the one that gets you where you want to go at a cost you’re okay with spending.

Next: Estimate your travel expenses

To start, I estimate the costs for airfare and accommodations with some basic online research. It’s usually safe to say that those will represent the two biggest expenses in your trip budget.

This step can take a considerable amount of time. I just don’t like spending a lot of money on airfare, so I wait for the best deal …and if one comes up that works for when I can take time to travel, I jump on it.

We typically book our airfare first, then our accommodations. Occasionally, we find the perfect place to stay (like when we spent a week in Florence), and we’ll book that first, but that’s fairly rare.

After those are done, we have a much clearer picture of what our potential trip cost is.

How much we spend on the rest of our trip is largely dictated by the plane ticket and apartment/hotel costs.

Vacation Budget Guidelines

To help you out, here’s a basic framework of how we set our travel budgets:

• Transportation (including airfare, train fare, gas, public transportation, rental cars)—30%
• Accommodations (vacation rental, hotel room) —30%
• Daily budget for expenses while traveling (meal costs and other food, souvenirs, incidentals)—20%
• Activities/site entry fees/city or museum pass—10%
• Miscellaneous (for unanticipated or extra costs, budget overages)—10%

These percentages will vary depending on your destination and how you like to travel, but it makes a good starting place. For some travelers, airfare will make up closer to 50% of the budget, and for others, food will take a larger chunk.

Destination can especially change these percentages greatly. If you’re planning a trip to Disney World, those park tickets can easily take up a significantly larger portion of your budget than 10%.

Likewise, if you’re heading to Moorea for a stay in an over-water bungalow, well, first of all, I’m jealous, but secondly, that means you’re probably spending more on your accommodations than you might otherwise.

For road trip travel, of course, your transportation expenses will be largely gas for your car, and you can eliminate the airfare expense.

As you plan more travel, you’ll get a better feel for how much you can expect to spend for the way you usually travel.

Set aside your travel funds

Personal finances can be a touchy subject. I understand that.

But I’m going to strongly recommend that you never go into debt to travel. Once you’ve decided how much money you will need to cover your trip costs, it’s time to start setting aside money for that trip.

Make sure you’re tracking trip expenses while you’re traveling

Keeping on top of every penny we spend as we travel helps with decision-making as we go. Those unexpected expenses can creep up on you if you’re not careful.

We tally everything up at the end of the day so that we know exactly how much we’ve spent. And this works whether you prefer to travel with a debit card or use credit cards.

This way, as the trip progresses, we know for sure whether we can go back to a favorite restaurant that was maybe a little pricier or pay for the admission to that site that was on our “maybe” list because we weren’t sure if we could afford it.

Or even buy that “splurge-y” souvenir.

AND…every penny we don’t spend on one particular trip goes to the budget for the next trip that needs additional funding.

And that’s how we do it!

Sample: realistic travel budget

Let’s use the example of our trip to Paris in 2019. For a more recent example, see my post about how much our 2024 trip to New Zealand cost.

Transportation (air and ground)

• Round trip airfare for two (American Airlines, basic economy from ATL to CDG): $1,084.06
• RER (Paris commuter train), from and to CDG, to and from Versailles, several metro tickets: $68.29
• Total transportation: $1,152.35
• Percentage of total budget: 31%

Accommodations

• 7 nights rental apartment through Vrbo, plus damage protection): $1206.29
• Percentage of total budget: 33%

Daily expenses while traveling

• Food, souvenirs, incidentals: $708.58
• Percentage of total budget: 19%

Activities/site entry fees (actual costs from 2019)

• Paris Museum Pass (two, 6-day passes purchased at the airport): $166.57
• Eiffel Tower tickets (1 summit ticket and 1 ticket to the second level purchased online in advance): $47.14
• Palais Garnier guided tour tickets (purchased online in advance): $38.34
• Total activities/sites: $252.05
• Percentage of total budget: 7%

Miscellaneous expenses

• WiFi hotspot rental (from Vision Global): $53.80
• Travel insurance (World Nomads explorer plan): $236.93
• ATL airport parking for 9 days: $90
• Total miscellaneous: $380.73
• Percentage of total budget: 10%

So, even though we went a little over budget on the accommodations, we were under budget for our sightseeing and daily expenses. So, we more than made up for spending a little more on the apartment rental.

The daily expenses part of the budget is usually where you’re going to have the most flexibility in your budget since so many of the other costs will be set ahead of time.

I usually greatly overestimate how much we’ll need for this part of our budget. It’s not necessarily intentional on my part, but I do want to make sure we’re comfortable and not scrimping as we travel.

The bottom line

You’ve got the basics down. Now it’s time to start putting your travel budget together.

It may seem daunting at first, but if you break it down into smaller steps, it becomes a lot more manageable. So don’t forget—before you go booking all those flights and hotels, take some time to sit down and create a realistic budget for your trip.

Then, make sure you set aside money for your trip and track your expenses while you’re away. It may seem like a pain, but trust me, it will be worth it.

And who knows? Once you see how much money you can save by being smart about your spending, you may just decide to travel more often! 

Now that you know how to create your travel budget, it’s time to start planning your dream vacation.