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How to Create a Realistic Travel Budget? Step by Step Guide

by Steph

Creating a travel budget is an important part of the planning process which you shouldn’t skip if you don’t want to run out of money halfway through your trip.

There are lots of things you need to take into consideration when budgeting for a trip. The most important ones are your flight ticket, accommodation, food, activities, how you’ll get around, etc. And then come all the other miscellaneous expenses. Once you have all this figured out, you can finally start saving for your trip.

In this article, I’m going to show you how to make a realistic travel budget and I also have a free travel budget planner that you can download and use to track all your trip expenses. 

Step by step guide to creating a travel budget
Photo by Ken Yam on Unsplash

***This article may contain affiliate links, which means that each time you click through and make a purchase, I may earn a small commission at no extra cost to you.

13 Things to consider when Creating a Travel Budget

Flight Cost 

The biggest part of your travel budget will most likely be your flight cost. After choosing your destination and dates, go to a flight comparison website (I use both Skyscanner and Expedia) to look for the cheapest flight. 

Although I never actually book through these websites, I only use them to determine which airline offers the lowest price and then book directly through the airline’s website. 

Since these comparison websites don’t usually include add-ons such as checked luggage, seat selection or food in the quoted price, you’d think that you’ve scored a great deal only to find out that there are additional costs.

If you decide to book through them anyway, just make sure to read all the fine prints to avoid overpaying for your checked luggage at the airport.

Another reason why I prefer booking directly with the airline is that it’s easier to claim a refund with the airline than with a third-party agent if the flight gets canceled.

Accommodation 

When budgeting for travel, you need to figure out how much you’ll be spending on accommodation. 

Do you prefer luxury or budget hotels? Do you want to stay in the city center within walking distance of all the popular attractions or don’t mind staying a little further away and travel back and forth? 

Booking sites like booking.com have a wide range of accommodation choices such as hotels, hostels and guesthouses and allow you to filter by price, accommodation type, included breakfast, free cancelation, and more. 

You can also use the “Map View” to see exactly where the hotel is located and all the nearby attractions. 

Once you’ve booked at least twice through booking.com, you can benefit from the genius discount which gives you 10-15% off certain accommodations! 

Alternatively, if you prefer to stay somewhere more local, you can rent apartments on Airbnb. These usually include a fully-equipped kitchen, so you can save money on food. Tip: I have a discount code that will get you up to US$ 50 off your first stay! Use this link to create a new account and claim your discount!

Consider your accommodation cost when budgeting for your trip
The view from my hotel room in Bali which cost only US$ 25 a night through booking.com!

Transportation

Think about how you’re planning to get around once you’re at your destination. I personally walk a lot when I’m traveling. This way I get to discover a few hidden gems that I wouldn’t find if I took transportation from point A to B and I get to save money in the process. 

Research about all the different transportation systems such as taxis, Uber (Grab in Asia), buses or trains. I prefer using Uber or Grab over taxis since I can see the price upfront and thus avoid getting ripped off by taxi drivers.

In some countries, you can also purchase a city pass that gives you unlimited rides on public transportations, so look out for those.

If you’re planning on doing a road trip, compare prices of car rental companies and research about the price of gas, parking fees, insurance, toll charges, etc.

Your transportation cost will depend a lot on where you’re staying, so keep that in mind when budgeting for your trip. And remember that you need to budget for your hotel transfer (Note: the fare is slightly higher when you’re being picked up from the airport). 

Renting a motorbike is very cheap in Asia and help to cut cost from your trip budget

Food 

When I travel to destinations like Asia where food is very cheap, I only budget about US$ 10-20 per day. Obviously, food is more expensive in Europe or the US, so make sure to do your research before your trip. 

Compare restaurant prices and check on Tripadvisor where you can find photos of the full menu with prices. Also, don’t rule out street food since they are usually cheaper and sometimes taste even better!

Tip: If you’re traveling on a budget, choose an accommodation that offers free breakfast or has a kitchen where you can prepare your own meal. But do note that in some countries like Bali, it’s actually cheaper to eat out than cooking your own meal. 

Smoothie bowl in Bali
Don’t forget to budget for delicious food like this smoothie bowl in Bali!

Activities and Tours 

The fun part of traveling is without a doubt all the fun activities that you’ll get to do! Google and Pinterest are your best friends here!

Search for “places to visit + destination” or “things to do + destination” and look out for travel blogs that provide valuable information and tips.

Once you’ve written down your list of activities with the estimated costs, make sure to check whether you can obtain discounts on some of them. Websites like Klook and GetYourGuide usually offer discounted tickets for activities and tours. 

For example, during my first trip to Singapore, I paid full price to visit the Gardens by the Bay only to find out that I could’ve saved US$ 5 per ticket by booking on Klook!

Girl visiting Gardens by the Bay in Singapore

ATM and Foreign Exchange Fees 

These costs are usually hard to avoid and unfortunately, you do need to account for them when planning your vacation budget. In Thailand, for example, you always have to pay a 200 baht (US$ 6.40) fee every single time you withdraw money. To avoid eating into your budget, make sure to withdraw as much as you can in one go.

Another thing to consider is foreign exchange fees. Avoid exchanging currencies at the airport since they offer the worst rates. If you absolutely need cash, only exchange a small amount for transportation and once you’re at your final destination, shop around for the best rates.

Related post: 20 Actionable tips to Save Money for Travel!

Travel Insurance 

As amazing travel is, there’s always a possibility of something going wrong. Whether it’s lost luggage, stolen items or canceled flight. Having travel insurance is a must if you want to avoid any unpredictable expenses.

Local Sim Card 

Roaming charges are very expensive and sometimes it’s not always possible to use your current phone plan in another country. If you want to save money, it’s better to buy a local sim card. Just do a quick search on Google to find out which company offers the cheapest rates.

Shopping 

You’re bound to do some some shoppping during your trip and you might also want to bring some souvenirs back home. Make sure to account for this when planning your trip budget.

Souvenirs in Ubud Bali
It’s very hard to resist buying souvenirs in Bali!

Vaccination and Medication 

Some countries will require you to have certain vaccinations in order to enter. Even if it’s not mandatory, it’s always a good idea to check with your doctor if you need to get any just to be on the safe side. 

Also, don’t forget to purchase some travel medications but be sure to check whether you’re allowed to bring certain medicines into the country or if you need a prescription.

Passport and Visa

Before you travel, make sure to check whether you need a new passport. Some countries won’t allow you to enter if your passport is due to expire within the next six months. 

Also, check the embassy website of the country you’re visiting to find out if you need a visa and how much it costs to apply for one.

Pre-Trip Expenses

There are usually some pre-trip expenses you need to take into consideration before you travel. For example, you might need to buy a new suitcase or backpack. Or if you’re planning on doing hikes, you might need to buy some hiking shoes.

If you take lots of photos, you’ll need a portable charger so you don’t run out of batteries or a universal adaptor to charge your devices.

Make sure to also check the climate and see if you need to buy some warm clothes if you’re traveling to a cold region or sunscreen if you’re planning a beach vacation.  

Koh Poda - Thailand Itinerary for 10 days

Emergency Fund

Finally, if you want to create a realist budget for travel, set some money aside for any emergencies or unexpected events that might crop up or expenses that you forgot to account for. 

In some cases, you might meet new people who invite you to join them on a night out or you suddenly discover that there’s a cool activity you could do once you’re at your destination. So, it’s good to have some extra cash lying around to allow for little splurges here and there.

Did you find this travel budgeting guide helpful? If so, let me know in the comments below! Also, make sure to read my article about saving money for travel which contains 20 tips to help you save money for the vacation you’ve been dreaming of!

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