How to Create a Travel Budget

If you are like me, and travelling is one of your top priorities, you will know all too well that this little hobby is not cheap. Previously, I used to simply go with the flow. If I felt like taking a weekend trip somewhere, I would wait to get paid and book my flights and accommodation the very same day. I had no budget in place. In all honesty, I had no idea how  to budget in the first place. I would pay my bills first, and whatever was left of my salary I would simply spend. In the past two years, it was mostly on travelling.

I knew that if I ever wanted to take a big trip, I had to learn how to save because big trips are expensive. I also knew that I wanted to take a big trip for my 30th birthday, but I didn’t have a plan in place. I imagined this would just happen, without any efforts from my side. With less than a year left to go before my 30th birthday, it finally occurred to me that I need a plan. The plan is quite simple – to save. Since I first decide on a destination and only then budget for my trip, I followed these steps to create a travel budget.

SELECT YOUR DESTINATION

There are places in this world that I really  want to go to. In fact, I have a list of places that I really  want to go to. I go by my list. I don’t care how much it will cost me. Travelling is not a cheap hobby, and if you are not willing to pay for it, you are not into travelling as much as you thought you were. Although I like a nice relaxing holiday, I am not into all-inclusive holidays to beach resorts. I am also not interested in taking one two-week holiday per year and go to the very same place I visited last year…and the year before that.  Things like that make me cringe (no judgement, this simply is not for me). If a trip to South America is going to cost me £2,000, so be it! Because this is where I want to go, and I will make an effort, save a bit of cash and be sure to enjoy myself while travelling.

ESTIMATE YOUR TRAVEL COSTS

Once I knew where I wanted to go, I started shopping around for air fares. Having researched what seemed like all possible options, I budgeted around £800 for my flights to South America. My next step was to shop around for accommodation. I must say that I have never stayed in a hostel during my travels. I am not comfortable to share my bedroom with total strangers. What I realised, though, is that if I want to dedicate a year or two of my life to travelling (something that I really want to do), staying at hotels is not very economical. Also, if you are a solo traveller, staying in hostels is a great way to meet people. I decided to give it a try and budgeted around £300 for accommodation for 14 nights (note: I will spend one night flying and one night on a bus). Yep, £300! Staying in hotels would cost me three times more!

ADD YOUR TRAVEL EXTRAS

Once you know the cost of your flights and accommodation, add such extras as airport transfers and local transportation to your calculations. These little things that we usually don’t think about can quickly add up. For instance, when I went to Southern Italy in July, I spent over £50 on local transport for 8 days. This may not seem like a lot, but when I added my airport transfers in London and upon arrival in Italy, the amount was well over £100! I have estimated £200 (including an overnight bus from Buenos Aires to Iguassu Falls) for all these travel extras.

DON’T FORGET YOUR POCKET MONEY

Unless you are going to an all-inclusive resort (which I am not), you will need money to spend on food, dining, entertainment, souvenirs and other fun things. During my travels around Europe, I have come to realise that EUR50 per day is more than enough for me to have a good time. I know that South America is slightly cheaper than Europe and prices there can be compared to those in post-Soviet and Eastern Europe (think the Czech Republic, Estonia, Romania) so I allocated roughly £600 on this. This doesn’t mean that I will spend all of this allocation if I don’t need to. To comfortably enjoy my holiday, I need some money for lunch and dinner (as breakfast is typically included in accommodation price) as well as theatre tickets, entry to museums and other admission charges.

SAVE, SAVE, SAVE

Now that I know my 17-day trip to South America will cost me in the region of £1,900 all included, I have to make sure I have enough money to pay for it. Since I started budgeting for this trip back in June and I am not leaving before February next year, I had 7 months to save for my trip. The easiest thing to do was to divide the total cost of the trip by 7 to see how much cash I should be saving each month. However, I wanted to buy my flights well in advance to keep the price down, so I saved up just under £750 in 2 months and bought my flights at the end of August. First, I am going to New York for 3 nights (yes, I am finally going!). I will then fly over to Buenos Aires for 4 nights, take a night bus to Iguassu Falls and stay there for 2 nights, before making my way to Rio de Janeiro for 5 nights. Having paid for my flights and saved another £100 (accommodation is to be paid locally, so not until February), I have just over £1,000 left to save. I have got four months (and four salaries) left to go, so I will be saving £250 from each paycheck to have the remaining £1,000 saved up by the end of January.

How do you budget for expensive hobbies, be it travelling or something else? I am curious to know.

How to Create a Travel Budget - Girl Counting Pennies

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30 Comments

  1. Exciting times with the planning!! I agree about not going to the same place to travel, though I would make a special exception for Costa Rica, as well as hostels. There’s often common areas where you can talk with people, and it makes for a fun atmosphere. Can’t wait to hear about more of your planning as it unfolds! Let me know where you find your travel deals, as well!
    anna recently posted…A Few Ways to Save on Room and Board During CollegeMy Profile

  2. Well done for saving up and budgeting Eva for something that you love so much! I’d love to take a trip like that. I bet you’ll take some amazing pictures. How exciting! For me, we’re not saving or budgeting for anything expensive except for our debts of course, which I do get quite excited about anyway. 🙂 Once I’m debt free, I hope to be back to traveling again!
    Hayley @ A Disease Called Debt recently posted…Why you need to be happy in your jobMy Profile

  3. So excited for you! I love traveling so much. I think you will love Buenos Aires and Rio. I liked Rio a little better, just because of the geography and people. I want to go back! I’m also planning something epic for my 30th which is in one year, so we’ll see. I want to go back to Iceland for Iceland Airwaves, but my Brazilian visa expires this year as well so I want to go back. Totally first world problems, but I want to go everywhere. Saving is so important, which means I need to let go a little of the debt repayment process, or magically make a ton more $.
    Dear Debt recently posted…The 5 stages of grieving debtMy Profile

  4. Travel wasn’t always difficult for us, since, when it comes to our summer vacation, it’s the same spot: Dubrovnik/Croatia. We already know how much we spent already, so the budget is easy to make. Good planning does save you A LOT of headaches, that’s clear. And it’s better to have more money that you anticipated you’d need, than to have surprises and no chance to get back home.
    dojo recently posted…Saving and Frugality: being frugal when it comes to pregnancy clothesMy Profile

  5. You’ve definitely evolved in your travel planning. Planning your trips out in advance is always the way to go in my opinion. There’s two reasons for it: 1) you’re more likely to save money by shopping around for transportation, lodging, etc. and it’s usually cheaper to purchase in advance. 2) It’s more fun! By planning ahead you have a longer time frame to look forward to the trip. That’s part of the enjoyment too – the eager anticipation (which you don’t get when you do last minute excursions).
    Mr. Utopia @ Personal Finance Utopia recently posted…Move Here To Get A Guaranteed IncomeMy Profile

  6. The travel line item in our budget is our #2 priority, right behind retirement savings. It’s a plan my wife & I agreed on, as it’s so important to her that we get out of the country. So unless we’ve cut everything we can from every other part of the budget, that money goes to a targeted savings account for travel.

    Good post – I think some of those items might be missed in a budget.
    Done by Forty recently posted…Notes from PeruMy Profile

  7. Hi. I share your love for travelling and I make it a priority. I agree it’s expensive, but I think it’s financially manageable, even for people in debt, if they appropriately plan and budget for it.

    It’s my 30th birthday next year and I have plans for South America as well! I don’t have concrete plans like you yet, but I’m certainly daydreaming.
    Emily @ Urban Departures recently posted…How to Manage What Your Partner SpendsMy Profile

    1. I’m daydreaming about travel destinations on a daily basis, Emily! I plan holidays that I never take, for the fun of it 😛 I’ve got a spreadsheet with a detailed day-to-day itinerary for all my upcoming travels! I agree, if something is made a priority, it can be achieved irrespective of debt. Not everyone will travel while in debt perhaps, but this is one thing I do not want to save on. Thank you for stopping by! 😛
      Eva @ Girl Counting Pennies recently posted…How to Create a Travel BudgetMy Profile

  8. I took that night bus to Iguazu Falls-it’s great…but, there will be a lot of stops by the police. Iguazu is hands down the most amazing thing that I’ve ever seen!! You will have an amazing time. Also, I had to get vaccinated for yellow fever because I was going there. You might want to check with your travel clinic about shots they might recommend. I was surprised to have to do it. I can’t wait to see the pictures!

  9. Great post! I totally agree about the cost of traveling being astronomical but worth it! I worked for a cruise line for several years and got completely hooked (and very spoiled, since I was getting paid instead of paying).

    Over the years I’ve hosteled it up several times and rarely been disappointed. And even the times I was, I was usually just there for a night or two and could suck it up. On a pretty recent trip to Peru, I found all three hostels we stayed in were pretty great, and if you’re traveling solo, it is a nice and pretty safe way to meet people.

    You should check out free podcasts for your mp3 player too of the areas you’re going to. Often you can download free walking tour narrations and such.
    brokeGIRLrich recently posted…Budget 101: Needs vs WantsMy Profile

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