How To Make an Accurate Budget for Long Term Travel

by wheretheroadforks

When planning a trip, it is easy to underestimate your costs and go over budget. After all, there are a lot of little expenses involved that add up. In this guide, I explain how to create an accurate budget for long term travel. I’ll outline every expense that you’re likely to incur and explain how to estimate it. This process works for all budget ranges and trip lengths. In the end, you’ll have an accurate trip budget.  

We will begin by breaking the trip down into five categories of expenses:

  1. Accommodation
  2. Food and drink
  3. Transportation
  4. Activities
  5. Everything else

After calculating all travel expenses, we will add them up to see what our desired itinerary costs. From there, we can make adjustments to fit your total trip budget. Finally, I will explain how to track your budget while on the trip. At the end of each section, I include some helpful money-saving tips that I have picked up on the road.

Accommodation Budget

One of your biggest travel expenses is accommodation. You will need somewhere to sleep every night of your trip, after all. To start getting an idea of what accommodation will cost, simply go on a booking site like Hostelworld or Booking.com and search for hostels or hotels that you would be comfortable staying in.

Check the prices of multiple properties in every city that you will be visiting and make note of the average cost per night. This can take quite a bit of time but it is necessary to get an accurate idea of your accommodation cost.

Remember that prices change based on the season in many places so this must also be taken into consideration. In general, traveling during the summer is the most expensive due to high demand. Many hostels also charge more on the weekends than during the week.

Once you have found the average cost per night for each city that you plan to visit, simply multiply the number by the number of nights that you will be staying. Next, add them all up. This is your total accommodation budget for the trip.

backpacker sitting on a bed in a hostel

Money-Saving Tip: There are methods I use to cut my accommodation budget. Each time you use one of these, you can subtract the cost savings from your accommodation budget.

  • Travel at night- By taking overnight buses, trains, and flights, you save on a night of accommodation every time. This can really add up over the course of a long trip. Even though sleeping on a bus is uncomfortable, the money you save may be worth it depending on your budget. For example, if you travel to a new city by night every 4 days, you can potentially cut your accommodation budget by a quarter.
  • Camp- These days, I always travel with a small tent or hammock. Wild camping can really cut down on the accommodation budget because it’s free. Many hotels and hostels also offer space to pitch a tent and camp at a much lower rate than a dorm bed. Occasionally, you can find a restaurant or small business that will allow you to camp on their property. Generally, they will only ask that you buy something from them such as a meal.

Food and Drink Budget

This varies quite a bit from person to person. For this reason, food and drink is the hardest part of the budget to calculate.

A good place to start when estimating your food and drink cost is alcohol. If you are a drinker, this will be the most expensive part. Consider how much you drink, how often you drink, and what you drink. Next, you can begin researching costs.

Drink prices vary greatly around the world. For example, you want to know a drink cost closer to $.50 or $15 where you are traveling. You’ll never be able to accurately guess this cost but it is good to make a rough budget that you can try to stick to.

This is the easiest place to go over budget so be careful with drinking and partying. Travelers occasionally have to cut their trip short if they get too carried away.

a bar

Food cost is also difficult to calculate. Take the following into consideration. Bigger people spend more on food as they need to eat more. Some travelers happily eat local food while others are picky and prefer more familiar foods. Some enjoy cooking and others choose to eat every meal out. Which kind of person are you?

Next, you can do some research on what food costs in the region where you will be traveling. Find a rough daily food cost and multiply it by the number of days in your trip. This will give you a guide to try to stick to while you are traveling. Remember, you’ll probably need to eat more than you’re used to because you’ll be more active while traveling. 

Money-Saving Tips: Here are a few tips to help cut down on your food and drink budget

  • Stay in hotels and hostels that have breakfast included– This saves money and is one less meal to worry about. If it is a continental breakfast, you may even be able to sneak a bit extra out for later.
  • Cook for yourself- One of my favorite things to do when I travel is visiting a local grocery store or market. I make a point of always trying the local food in each country that I visit, but prefer to cook most of my own meals. It is always cheaper to cook for yourself than go to a restaurant.
  • If you are on a very low budget, travel with your own cooking gear- A small camp pot and alcohol stove is easy to pack and allows you to cook while camping.
  • Drink less- I would estimate that half to two-thirds of my food and drink budget goes toward alcohol. Giving up drinking will cut down on costs a lot. I like to pick and choose my going out nights carefully rather than drinking every night.
  • Eat a vegetarian diet- I could never do this full time, but eating less meat does cut down on costs.

Transportation Budget

Getting from point A to point B is another major expense. Maybe even the biggest expense depending on where you’re traveling. The single largest expense of your trip will most likely be your airplane ticket. I like to use Skyscanner to find the lowest cost flight.

Next, you must consider transport between cities. Research bus, train and ferry fare prices as well as any additional airfare on all of the routes that you plan to travel.

Next, take into consideration transport costs around the towns and cities that you will be visiting. This includes taxi, metro, public bus, and tuk-tuk fare. To estimate this, look at the locations of the sites that you plan to visit within the city and research the transportation cost between there and your accommodation. You can usually find average one-way transport prices online. 

A train pulling into the station

Money-Saving Tips: Here are a few tips to cut down on transportation costs.

  • Walk everywhere- I avoid using taxis and public transport as much as possible. Walking is free and you get to see more of the area that you are visiting.
  • Negotiate hard- Taxi drivers in particular love to rip off foreigners. If a cab driver won’t give me a reasonable rate, I will keep asking drivers until I find one that wants the fare.
  • Take advantage of credit card offers- I flew round trip between California and Africa for free with credit card miles. For my card recommendations, check out my article: The Best Debit Card and Credit Card for International Travel.
  • Hitchhike- Many places hitchhiking is common and safe. This is also a good way to meet some interesting characters that you otherwise wouldn’t meet.
  • Ride a bicycle- I have recently gotten into bicycle touring. Cycling is a cheap and healthy way to get from point A to point B. If you’re interested in this method of travel, you can read my review of my first bicycle tour.

Activities Budget

Now you must consider the cost of all the outings and activities that you plan to do on your trip. This includes entrance fees, tour costs, permits, equipment rentals, etc. To calculate this you must simply research all of these costs and add them up.

Knowing the rough price of everything that you want to do helps you avoid expensive surprises. Sometimes activities cost much more than you would think. For example, I was surprised by the ridiculous entry fees to Serengeti National Park. 

Money-Saving Tips: Here are a few tips to cut down on activity costs.

  • Rather than booking a tour, go independently- If you are visiting a site that is outside of the city, it is often easier to go with a tour group. The problem is that tours are usually much more expensive. Research public transportation options first. It may be just as easy and half the cost to go independently. I did this when I was going on a safari in Kenya. The tour cost was $350 but I was able to organize the safari by myself for less than $200.
  • Book when you’re on the ground rather than in advance online- Waiting until you arrive allows you to shop around locally and negotiate directly with tour companies. You can get some great last-minute deals if are willing to wait a few days. The only time this doesn’t work is if you are working with a tight schedule and you must do an activity on a particular day.
  • Skip some stuff- You don’t need to see every single site just to say that you’ve been there. If something doesn’t interest you, skip it. You can also talk to other travelers to get recommendations on their favorite thing they did in the city or country. 
  • Take advantage of discounts and free days- Some museums are free once per week for example. If you are a student, many tourist sites offer student discounts. Sites will be more crowded on free days but if you are willing to put up with more people, you’ll save money.

Additional Expenses to Consider While Making Your Travel Budget

One of the most important costs that many people don’t take into consideration is gear and clothing replacement. Stuff tends to wear out quicker when you are on the road. For example, your electronics will be exposed to more vibration, humidity, and dust than back home. Your clothes will be worn more often and for longer periods of time. This is not good for the longevity of your possessions.

If you are traveling long term like a year or more, you will want to add $50-$100 per month to your budget to replace gear as it wears out, breaks, gets lost, or stolen. For example, maybe your phone gets pickpocketed and you need to purchase a new one. If you accounted for gear replacement, this unexpected expense is already accounted for in your travel budget.

Other additional costs that must be taken into consideration include:

  • Travel insurance- This is optional but highly recommended. I always use World Nomads and have had good luck with them. For more info, you can check out my travel insurance page.
  • Expenses you have back home- This includes bills, rent, payments, and anything that you must keep paying while you are away.
  • Phone service- Will you be buying sim cards in each country or just rely on WiFi? This is another optional expense.
  • Laundry cost- Do you plan to wash clothes in the sink or send them to be washed for you? Washing in the sink is free but sometimes it’s nice to have clothes cleaned properly.
  • Health-related expenses- Do you take any medications that you will need to purchase abroad? Will you need to purchase malaria tablets? Do you need any travel vaccinations?
  • Emergency cash– You may want to stash away a bit of cash in case your credit or debit card is lost or stolen. I usually bring $300-$1000 depending on where I am traveling and if I plan to spend the cash or not.
  • Haircuts- If you’re traveling for more than a month, you’ll have to cut your hair. To save some money, you could cut your own hair. 

After You Have Found All of Your Travel Costs

The next step in creating your travel budget is to add everything up and see what your desired itinerary costs. You may want to divide the total by the length of your trip to get an idea of average monthly, weekly, and daily cost.

Chances are, your desired trip costs more than you can afford. At this point, you can make adjustments to your trip budget to make it more affordable. Changes you can make to reduce costs:

  • Skip some cities- This will cut out transportation costs and activity costs associated with that city. Sometimes it’s nice to spend more time in one city rather than moving around every other day. Remember, you don’t need to see everything.
  • Visit cheaper countries- Traveling in the developed world can cost more than $100 per day. You can get by on less than $20 per day in many developing countries. 
  • Travel more slowly- Rather than flying from one city to another, take a bus or train. To save even more, you can walk or bicycle tour. 
  • Stay in cheaper accommodation- Rather than hotels, consider hostels and camping.
  • Spend more time in each city- Sometimes I like to stay in one city for a month or more. You can find a better deal on accommodation if staying longer term. I recommend checking Airbnb if you decide to do this.
  • Shorten your trip- If you aren’t willing to make any sacrifices in terms of comfort, you can always simply travel for a shorter period of time.

Staying on Budget While Traveling

During the trip, you should keep a rough count of all of your costs. To do this, I recommend you use your phone. A notepad also works. Every time you spend money or at the end of each day, write down the amount that you spent and what you purchased.

This can be as detailed as you like. Generally, I’ll just add things up in my head and write down one or two numbers for the day. I don’t really care about the specifics of each purchase, just the total daily expenditure.

With this information, you should periodically check if you are sticking to your travel budget. For example, at the end of each month, I will add up all of my expenses to see how much I spent. I will also check my bank account and see exactly how much I withdrew. I subtract the cash that I still have from the total that I withdrew out to find out how much I spent.

Next, compare the amount that you spent with the amount that you budgeted. If you find that you are over budget, you can make adjustments as you continue your trip. If you overspend a bit one month, try to be more careful with your spending the next. Some months, you will have an unexpected expense and some months you come in way under if you were traveling in a particularly cheap location. It’s all about the average.

My Travel Budget Philosophy

Admittedly, I am very frugal. I walk for miles just to save a couple of bucks on transportation. I will sleep in a train station to avoid having to spend money on a hotel. My thinking is that the less I spend, the longer and further I am able to travel.

While making a budget, I am very conservative. I prefer to overestimate every expense and spend less rather than underestimating and potentially running out of money.

With that being said, I don’t like to miss out on anything. There is no point in going somewhere if you’re just going to sit around the hotel all day trying not to spend any money. There is a difference between cutting back on comfort to save money and cutting back on experiences. I would much prefer to spend money visiting a national park, museum, or concert than staying in a fancy hotel or eating a nice meal. 

To Wrap it Up: How to Make an Accurate Budget for Long Term Travel

Unless money is no object, it is a very good idea to make a travel budget before setting off on a long trip. Your trip will go smoother and you’ll probably end up saving money. I understand that this whole budgeting process can take many hours but it is a necessity for most people.

The level of detail that you need to go into will depend on how good you are with money. Don’t forget to track your budget as you go and make spending adjustments as necessary.

Do you make a budget for travel? Share your tips in the comments below!

For more help budgeting, check out my Guide to Ultra Low Budget Travel on $10 Per Day

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