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You’ve chosen your dream destination. You’re finally going 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 plan your trip budget. But, where do you start? In this post 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.
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Planning a Trip Budget that Works for You
You’re ready to take that dream trip. You’re looking for airfare and hotels deals online. Good for you. I absolutely do that too. But before I pull the trigger, I like to have at least a decent estimate of what my total trip cost is going to be so I don’t blow too much of my budget on any one part.
Making decisions about where you’re going to put your travel dollars
How do you decide where your travel dollars should go? Well, a lot of this is going to be personal.
Do you value luxury accommodations and 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 again or explore the world on a smaller budget so you can travel more frequently?
Perhaps your ideal trip includes Michelin star restaurants or large rooms in high-end hotels. Or maybe you’d rather stay in a hostel for a few nights and cook your own meals so you have the money to do that $350 heli-hike to a glacier on New Zealand’s South Island.
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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.
When planning a trip budget, you need a good estimate
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 largest slices of your trip budget pie.
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And this can take a considerable amount of time. We just don’t like spending a lot of money on airfare, so we wait for good deals…and if one comes up that works for when we can take time to travel we jump on it.
We typically book our airfare first, then our accommodations. Occasionally we find the perfect place to stay (like when we traveled to Florence, Italy) 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.
To help you out, here’s a basic framework of how we set our travel budgets:
Transportation (inc. airfare, train fare, gas, metro fare)—30%
Daily expenses while traveling (food, souvenirs, incidentals)—20%
Activities/site entry fees/city or museum pass—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 especially can 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.
Don’t forget to factor travel insurance into your calculations. You’ll want the peace of mind that comes with knowing your travel investment is covered.
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.
And you don’t have to stick to this religiously. If you go over budget in one area, you can easily trim back a bit in one or all of the other areas to compensate.
Let’s use the example of one of our recent trips (to Paris in May 2019) to see how this works out in reality:
Transportation (air and ground):
Round trip airfare for two (American Airlines, basic economy from ATL to CDG): $1084.06
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:
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%
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, because we were under budget for our sightseeing and daily expenses, we more than made up for spending a little more on the apartment rental.
The daily expenses part of the budget usually is 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 intentional necessarily, but I do want to make sure we’re comfortable, not scrimping.
Make sure you’re tracking expenses while you’re traveling
Keeping on top of every penny we spend as we travel helps with decision making as we go. We tally everything up at the end of the day so that we know exactly how much we’ve spent. 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 a particular trip goes to the budget of the next trip that needs additional funding.
And that’s how we do it! Do you have any great tips for planning a travel budget? Please share them in the comments below.
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