When planning a trip, it is easy to underestimate your costs and go over your travel budget. There are lots of little expenses that add up. This guide explains how to create an accurate budget for traveling.
In this guide, I will outline every expense that you’re likely to incur and explain how to estimate it. We’ll cover transportation, accommodation, food and drink, admission tickets, tours, activities, visas, travel gear, and more.
This process works for all budget ranges and trip lengths. It doesn’t matter if you’re planning a weekend getaway, an international vacation, or an extended round-the-world trip. If you follow this guide, you’ll end up with an accurate trip budget. I will also explain how to track your spending while on your trip to help you stick to your travel budget.
In the past 12 years, I’ve traveled to almost 70 countries. I’ve spent several year-long stints on the road. During that time, I have developed an easy and precise way to budget my travel expenses. In this guide, I’ll share how I create a travel budget, step-by-step.
Key Takeaways- How to Create a Travel Budget
– Step 1: Identify your biggest expenses. For most trips, this will be airfare and tours.
– Step 2: Estimate your expenses for accommodation, food, and drinks.
– Step 3: Estimate your expenses for ground transportation. Consider bus and train tickets, regional flights, taxis, Uber, and public transportation.
– Step 3: Estimate your expenses for visas, travel insurance, travel vaccines, and other documents you may need.
– Step 4: Consider additional expenses. Think about the travel gear you need to buy. Think about other small expenses like SIM cards, laundry, haircuts, etc.
– Step 5: Re-evaluate your budget. Consider your priorities. Think about where you want to splurge and where you want to save.
– Step 6: Save up for your trip. Make sure you have an emergency fund in case of unexpected expenses.
This guide is broken down into 5 categories:
- Transportation
- Accommodation
- Food and Drink
- Entertainment, Tours, Admission Tickets, and Activities
- Additional Expenses: Insurance, Visas, Vaccines, and Travel Gear
After calculating all of our travel expenses, you will add them up to see what your desired itinerary would cost. From there, you can make adjustments to fit your total trip budget. At the end of each section, I include some helpful money-saving tips that I have picked up on the road.
How Much Does it Cost to Travel?
The cost of traveling depends on a variety of factors, so it is hard to give an exact answer. Generally speaking, the farther and longer you travel, the more expensive your trip will be.
Your destination is the main factor that determines how much your trip will cost. You’ll spend a lot less while traveling in Southeast Asia or Central America than If you were traveling through Western Europe. Traveling locally is cheaper than traveling abroad. When you travel abroad, you can expect your travel expenses to increase due to the high cost of airfare.
Budgeting for your trip is also highly dependent on personal preference. How much luxury do you need? Do you plan on staying in luxury hotels or budget hostels? Do you want to try out local restaurants or cook your own meals? Can you travel by bus or do you need to fly? Do you enjoy expensive activities such as Scuba diving or taking hot air balloon rides? All of these factors can drastically affect the total cost of your trip.
Traveling can range from relatively inexpensive to quite costly. The good news is that there are plenty of ways to save while still having a wonderful experience. You can shop for deals on flights and accommodation. You can stay in hostels instead of hotels. It’s possible to enjoy a great trip with a surprisingly small amount of money. Budget travelers can travel on just $1200-$1800 per month. If you’re traveling in an expensive region, you might spend $2500 per month.
Transportation Budget for Traveling
Getting from point A to point B is a major travel expense. Maybe even the biggest expense depending on where you’re traveling. According to this guide, travelers spend an average of 44% of their travel budget on transportation. Transportation costs include flights, parking, a rental car, bus and train tickets, and public transport. In this section, I’ll explain how to estimate your transportation budget for travel. I’ll also share some tips to help you save on transport.
Airfare Budget for Traveling
The single largest individual expense of your trip will likely be your airplane ticket. Airfare is expensive. A round-trip intercontinental ticket can cost $1000-$1500 or more. A round-trip domestic ticket in the U.S. is around $300.
You can use a flight booking tool such as Skyscanner, Kayak, or Google Flights to estimate the cost of your flights. These tools can quickly give you an overview of flight prices for the entire month. This gives you a good idea of ticket prices. You can also use these services to find cheap flights.
There a few ways to save money on airfare. When booking your ticket, try to be flexible with your travel dates. Generally, it’s cheaper to fly during the week than on weekends. Flights during the off-season and shoulder seasons are cheaper than flights during peak seasons and holidays.
You can also save money by flying into a different airport. Many major cities have multiple airports. For example, if you’re flying to New York, check the price of flights to LaGuardia (LGA), John F. Kennedy (JFK), and Newark (EWR) airports. Sometimes flying into one is cheaper. Most booking sites allow you to search multiple airports.
Sometimes you can save money by flying to a city that’s in the same region as your destination but cheaper to fly into. For example, maybe you want to fly to Kuala Lumpur, Malaysia. You might save money by flying into a major hub city like Bangkok. From there, you can take a cheap flight on a budget airline to Kuala Lumpur. Some major hubs around the world include Dubai Airport, London Heathrow, Istanbul Airport, Chicago O’Hare International, Incheon Airport, and more. You can often find cheap flights flying into and out of these airports.
You may also save by flying to a nearby city and then taking ground transport to your destination. Sometimes cities are cheaper to fly to than others. For example, instead of flying directly into Orange County, California, you may find a better deal on a flight to Los Angeles International Airport(LAX). From there, you could take a shuttle, bus, or rental car to your destination. Most booking sites allow you to search nearby airports.
You can also save by flying budget airlines rather than big-name national airlines. Budget airlines offer fewer services but cheaper flights.
Another way to save on flights is to take advantage of credit card offers. I flew round trip between Los Angeles and Africa for free with credit card miles.
If you’re planning on taking an extended trip around the world, you may be able to save by buying a round-the-world ticket. Many airlines offer round-the-world tickets with stops on different continents. Several third-party services are also available to help you mix and match. For more info, check out my guide to planning a round-the-world trip.
Regional Transportation Costs Between Cities and Countries: Buses, Trains, Flights, and Ferries
If you’re traveling to multiple cities or countries during your trip you must also consider the cost of transport between destinations. You’ll have to fly, take a bus, or take a train, between each city or country you plan to visit. Generally, a regional bus trip that lasts 6-12 hours costs around $20-$100. A train journey from one city to the next could cost $50-$200. A one-way regional flight costs around $100-$300.
Before your trip, be sure to research the price of bus and train tickets and flights on all of the routes you plan to travel. Most bus and train companies list ticket prices on their websites these days. To save time, you can use a booking site to find the cost of tickets. A great resource for finding bus and train routes and prices is rome2rio.com. This site makes it easy to research transportation options and estimate the cost of tickets. Another great booking site for finding bus ticket prices is Busbud. For train routes and ticket prices, seat61.com is an excellent resource. You can use a flight booking tool such as Skyscanner, Kayak, or Google Flights to estimate the cost of regional flights.
Regional transportation costs are usually pretty affordable. If you’re traveling around a lot during your trip, transport costs can add up. Generally, the cheapest way to travel from one city to the next is by bus. Trains and flights are usually more expensive. It’s still worth checking prices. Sometimes flying is the cheapest option thanks to budget airlines.
Local Transport: Public Transportation, Rental Car, Taxis, and Uber
Next, take into consideration transport costs around the towns and cities that you will be visiting. This includes taxi, Uber, metro, city bus, and tuk-tuk fares. To estimate this, look at the locations of the sites that you plan to visit within the city and research the transportation costs between there and your accommodation. You can usually find average one-way transport prices online.
If you don’t feel like taking the time to estimate the cost of local transportation, you can simply raise your daily spending money budget by the average price of a round-trip public transport ticket. Sometimes you can buy a weekly or monthly unlimited pass and add that to the cost of your trip.
Rental Cars
If you plan to drive a rental car, you’ll need to factor in the cost of the rental, gas, and insurance. Visit your favorite booking site to check the price of car rentals. Discover Cars and Kayak are popular options for booking a rental car. On average, renting a car costs $40-$80 per day.
Remember that the price of rental cars varies throughout the year. Prices increase during the busy season and during holidays because demand increases. Rental car prices also vary greatly by location.
Tips for Saving Money on Transportation
The cost of local transportation can quickly add up. If you take a taxi or Uber or take multiple metro trips daily, you could spend hundreds of dollars per month. There are a few ways to save.
To reduce your cost of local transport, try to walk more. Instead of taking an Uber, walk from your hotel to the museum. Walking is free. As an added benefit, walking helps you get to know the city better. It’s also healthy.
When taking a taxi or tuk-tuk, negotiate hard. Taxi drivers love to rip off foreigners. If a cab driver won’t give you a reasonable rate, keep asking drivers until you find a driver that wants the fare.
Cycling is also a great way to get around cities. Many cities offer affordable city bike rental programs. These programs are often open to tourists. Cycling is a cheap and healthy way to get from point A to point B. If you’re on an extremely low budget, you could consider hitchhiking.
Accommodation Budget for Traveling: Hotels, Hostels, and Airbnbs
After transportation, your biggest travel expense is probably accommodation. After all, you will need somewhere to sleep every night of your trip. It’s easy to go over your travel budget if you overspend on accommodation.
To estimate your accommodation budget, go to a booking site like Booking.com or Agoda and research the price of hotels at your destination. Airbnb is also a great option in some regions. If you’re on a tighter budget, check Hostelworld for the price of dorm rooms.
When searching for accommodation, check the prices of multiple properties in every city that you plan to visit. Try to find an average price. Sort properties by most popular instead of cheapest. This can take quite a bit of time but it is necessary to get an accurate idea of your accommodation cost. If you’re conservative with your budgeting, you’re less likely to overspend.
Remember that accommodation prices change based on the season in many places so this must also be taken into consideration. In general, traveling during the summer is more expensive because demand is higher. Traveling during holidays and festivals is also more expensive than traveling during the normal season. For example, in Rio de Janeiro, the price of hotels doubles during Carnival. Some properties also charge more on the weekends than during the week. It’s important to consider the season when estimating the price of accommodation.
Once you have found the average cost per night for each city that you plan to visit, simply multiply the nightly price by the number of nights that you plan to stay. Next, add them all up. This is your total accommodation budget for the trip. If you’re not sure how long you plan to stay in each destination, you can calculate an average nightly accommodation cost based on hotel prices in each place you plan to visit.
There are a couple of ways to save money on accommodation. You could stay in a dorm room in a hostel. A bed in a dorm costs 25-50% of the price of a hotel room. If an average hotel room costs $100-$150 at your destination, a hostel dorm bed might cost $20-$40.
Camping is also a great way to save money on accommodation. Oftentimes a campground costs $15-$25 per night. There are also plenty of free campsites if you look around. In some countries, wild camping is legal. Some hostels allow you to pitch your tent on their property for less than the cost of a dorm bed. These days, I sometimes travel with a small tent or hammock to save on accommodation.
Another great way to save on accommodation is to travel at night. By taking overnight buses, trains, and flights, you save on a night of accommodation every time. This can really add up if you move around a lot during your trip. Even though sleeping on a bus is uncomfortable, the money you save may be worth it depending on your travel budget. For example, if you travel to a new city every 4 days, you can potentially cut your accommodation budget by a quarter by sleeping while you travel.
Food and Drink Budget for Traveling
Food and drinks are some of your biggest travel costs. It’s difficult to estimate the cost of food and drinks. This is one thing that varies quite a bit from person to person. Everyone enjoys different types of foods. Some people prefer to eat in restaurants every day while on vacation. Others don’t mind cooking for themselves. Some people drink and others don’t. Some people are happy to eat local foods and street food. Others prefer eating more familiar foods. Of course, the cost of food and drinks also varies greatly by destination. In some countries, you can eat a meal in a restaurant for $10. In other countries, a meal costs $25. For this reason, food and drink is the hardest part of the budget to calculate.
To give you an idea of how much food might cost you, on average Americans spend $35 per day on food while taking an international vacation according to this guide. It’s easy to spend much more or much less than this depending on your eating habits. There are also a few ways you can cut your food budget.
When calculating your food budget, think about what you plan to eat, where you plan to eat, and how much you need to eat. You’ll have to budget more for food if you plan to eat in restaurants for every meal. Restaurants are expensive. If you’re a foodie who likes to sample different foods and eat in fine restaurants, you’ll need to budget plenty for food. If you’re staying in a hostel or Airbnb with a kitchen, you can buy groceries and cook some of your own meals. This is cheaper. Also, consider how much you like to eat. If you’re a big eater, you’ll spend more on food.
Also, think about what you like to eat. Some travelers happily eat local food while others are picky and prefer more familiar foods. It’s also important to remember, you’ll probably need to eat more than you’re used to because you’ll be more active while traveling. Travel is exhausting. You’ll burn lots of calories while sightseeing and moving around.
If you cook all of your own meals it’s possible to eat for just $5-$10 per day in much of the world. Eating all of your meals in restaurants costs around $30-$50 per day in most countries. If you enjoy a mix of restaurants, street food, and cooking for yourself, you can eat well for $15-$25 per day.
If you want to create a more accurate food budget, you can do some research on food costs in the region you plan to travel to. Look up some restaurant menus online. If you can, look at the cost of groceries. Create a rough daily food budget 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.
You don’t need to spend the same amount on food daily. You can average your food budget out across your trip. For example, maybe one day you splurge on a nice steak dinner and spend $50 on dinner. You can cook a cheap meal to balance your travel budget the next day.
Another important cost to consider is alcohol. If you are a drinker, you could spend more on alcohol than you spend on food. Consider how much you drink, how often you drink, and what you drink when calculating your alcohol budget.
Drink prices vary greatly around the world. For example, in some countries, you can buy a beer for $3. In other countries, a beer costs $15. If you prefer cocktails, you’ll spend more. It’s easy to spend $100 on alcohol on a night out.
To get an idea of how much you’ll spend drinking, look up some restaurant menus in your destination and check the price of drinks. Consider how many drinks you like to have with your meals and while going out. Also, think about how many times per week you plan to go out drinking. Most people tend to drink more while on vacation than while at home. You may spend more on drinks than you expect.
Drinking too much alcohol is one of the easiest ways to go over budget. If you’re on a tight budget, you’ll need to be careful with drinking and partying while you travel. I have met travelers who had to cut their trip short because they partied too much.
There are a few ways to reduce your travel budget for food and drinks.
One of the best ways to save money on food is to cook for yourself. It’s far cheaper to buy food in a grocery store and cook it than it is to eat in restaurants. If you are on a very low travel budget, you can travel with your own cooking gear. A camp pot and stove are easy to pack and allow you to cook while traveling. Of course, you won’t want to cook all of your own meals. You’ll still want to go out once in a while to sample the local cuisine.
One of the easiest ways to reduce your travel budget is to drink less alcohol. Drinking is expensive. It’s easy to overspend and blow your budget when you go out to a bar or club. Reducing your drinking or giving up drinking altogether will greatly cut costs. When I was younger, around two-thirds of my food and drink budget went toward alcohol. These days, I like to pick and choose my going-out nights carefully rather than drinking every night. I spend far less on alcohol. Another option is to buy some drinks in a grocery store or liquor store and drink in your hotel room instead of going to an expensive bar.
Another great way to save is to book hotels and hostels that include breakfast. This saves you at least a few dollars per day because you won’t have to buy coffee or breakfast in the morning. It’s also one less meal to worry about. If there is a continental breakfast, you may even be able to sneak a bit extra out for later.
Another way to reduce your food budget is to maintain a vegetarian diet. If you’re willing to live on cheap foods such as rice, beans, eggs, and fresh vegetables, you can eat cheaply anywhere in the world.
Admission tickets, Tours, Entertainment, and Activities Budget for Traveling
Next, you need to budget for all of the activities you plan to do during your trip. This includes admission tickets, entrance fees, tours, permits, guides, tips, equipment rentals, entertainment costs, etc.
To calculate the cost of activities you must research the costs of all of the activities you plan to do and add them up. For example, if you plan to visit an amusement park, go to their website and check the cost of tickets. If you plan to go skydiving, visit the company’s website and check the prices. If you’re visiting Machu Picchu, check the price of tours.
When you book tours, calculating the cost of activities is pretty easy. You pay one price that includes a guide, entrance, and transportation. If you plan to piece things together and go independently, it can become a bit more complicated. You’ll have to consider the price of transport, parking, tickets, a guide, etc.
Doing your research and knowing the rough price of everything that you want to do during your trip helps you avoid expensive surprises. Sometimes activities cost much more than you think. For example, I was surprised by the ridiculous entry fees to Serengeti National Park while going on a safari. I spend a couple of hundred dollars more than I expected to spend.
There are some additional major travel expenses that are easy to forget about. For example, if you’re driving your own vehicle, you may have to pay for parking. Parking in a crowded city could cost you $20-$50 a day. You’ll also have to consider the cost of tips for your guide. While you’re doing an activity or sightseeing, you might also be forced to eat in expensive touristy restaurants. Sometimes food options are limited.
There are a few ways to save money on activities while you travel.
In most cases, you can save some money by doing activities independently instead of booking a tour. Take public transportation to your destination, forgo a guide if you can, and pack your own food. I did this when I went on a safari in the Maasai mara in Kenya. The tour cost was $350 but I was able to organize the safari by myself for less than $200.
Another way to save money on activities is to book locally instead of booking in advance. Waiting until you arrive allows you to shop around locally and negotiate directly with tour companies. You can often score 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. In this case, it’s best to book in advance.
You can also save money by simply skipping some stuff. You don’t need to visit every attraction just to say you’ve been. If something doesn’t interest you, skip it. If you think a particular activity or attraction is too expensive or offers a poor value, skip it. Spend your day doing something you enjoy instead. It’s your vacation.
You can also save by taking advantage of discounts and free days. Some museums offer free entry once per week. 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.
There are also plenty of free things you can do. You don’t have to spend money every day. Check out my guide, 30 free things to do while traveling for some ideas.
Additional Expenses to Consider While Making Your Travel Budget
There are a number of additional expenses you’ll incur including travel insurance, visas, and vaccinations. These additional expenses can add up.
Travel Insurance
Travel insurance will be one of your major travel expenses if you’re traveling long-term. The cost of travel insurance depends on the kind of coverage you buy, the amount of coverage you buy, the amount of the deductible, where you’re traveling, and your age.
Travel insurance can cost anywhere from $20-$150+ per month depending on the coverage. The more coverage you get, the more the policy will cost. Most travelers should have a minimum of $100,000 in coverage. If you’re traveling to the U.S., you should have at least $250,000 in coverage.
Older travelers pay more for travel insurance than younger travelers. Those traveling to dangerous regions also pay more. Policies with a lower deductable or no deductable have a higher premium.
If you’re on a budget, you can opt for medical-only travel insurance. Travel insurance that covers your luggage and trip interruptions is significantly more expensive. If you carry expensive equipment with you, like cameras and computers, you may need to buy separate insurance if you want everything covered.
In most countries, travel insurance is optional but highly recommended. I use SafetyWing Nomad Insurance. They offer affordable insurance for long-term travel.
Many budget travelers consider travel insurance to be unnecessary and a waste of money. Personally, I disagree. I consider travel insurance to be essential. Particularly for travelers who participate in extreme sports or visit destinations that could be considered dangerous. A good travel insurance policy can cover you in the event of an injury or unexpected illness. Some policies can cover theft, damage, or loss of your belongings and trip interruptions. It’s worth it for the peace of mind.
Vaccinations, Medications, and Other Health-Related Costs
Travel insurance doesn’t cover everything. You might have other health-related costs that you have to budget for.
Depending on your destination, you may need some travel vaccinations. For example, a few countries require you to have a Yellow Fever vaccine. This is a common entry requirement in many countries in Africa and some South America. You need proof of vaccination to enter. Some vaccinations are highly recommended but not required. For example, before you travel, you may want to get typhoid, hepatitis A and B, and rabies vaccines.
Travel vaccines can be expensive. You may spend several hundred dollars on a medical consultation and vaccines. In the U.S, a Yellow Fever vaccine can cost $200 alone. If you’ve never had any travel vaccinations before, you could easily spend $500 on vaccines before your trip.
In addition, you may also need to buy malaria pills if you’re traveling to a region with malaria. Before your trip, you’ll need a malaria consultation and a prescription for malaria prophylaxis. One of the most popular types of malaria prophylaxis, Malaraon, can cost $200 per month. Cheaper options are available.
If need to take any medications, you may need to buy a supply for your trip. If you run out, you may need to buy some while you’re abroad. Maybe you want to go to the gym while you travel. You’ll have to budget for gym entry fees.
Visas
Before your trip, you should check whether or not you need a visa to visit your destination. Whether or not you need a visa depends on the passport you’re traveling with, which countries you’re visiting, how long you plan to stay, and the purpose of your trip.
For most international trips, visas are a minor expense. Most tourist visas cost $20-$50. Many visas are free. There are a few expensive ones that cost $100-$300 dollars.
Sometimes there are additional costs involved in obtaining vias. For example, if you have to apply for a visa in advance, you may have to pay to ship your passport to and from the embassy. For complicated visas, you may have to hire a visa agency.
If you’re taking a round-the-world trip, visas may be a major expense. For example, when I traveled through Africa, I spent about $600 on visas in 5 months of travel. Most countries in the region charge $50-$100 for a tourist visa.
Some visas are more expensive than others. For example, residence visas, digital nomad visas, working holiday visas, student visas, etc. are often more expensive than standard tourist visas.
Your passport can also determine the visa cost. For example, when I traveled to Tanzania, I paid $100 for a visa with my U.S. passport. My friend paid $50. We both received the same visa. Mine cost more because of my nationality. Some countries charge reciprocal visa fees. This means they charge foreign visitors the same price that their citizens pay for a visa to your country.
Travel Gear: Equipment, Clothing, and Electronics
Another major cost that many people don’t take into consideration is travel gear. Before your trip, you may need to buy luggage. A good backpack or suitcase can cost $100-$200. You might also need to buy a daypack, luggage locks, packing cubes, a toiletries bag, a money belt, and other accessories. In addition, you’ll have to buy travel-sized toiletries including soap, shampoo, sunblock, bug spray, etc.
If you travel regularly, you might have all of the gear you need. If you’re taking your first big trip, you might need to budget $200-$300 for travel gear.
You may also want to buy some new clothing before your trip. One of the mo