If you’re going to travel the world this summer you’ll want to make up a travel budget before you hit the road. This budget will help you understand how much you need to save before leaving home so that you don’t need to call mom and dad, begging for help halfway through your trip.
Without a budget you’re likely to run out of cash. This is a big damper on the fun, relaxing vacation you were looking forward to. Here are three tips to help you plan your finances for the trip you have planned for this summer vacation.
1. Pick A Location That Fits Your Budget
More than anything else, the countries you choose to visit will have the greatest impact on the necessary size of your travel budget. Road tripping across America or backpacking through Europe, while popular, are two of the more expensive options for a vacation. In contrast, a visit to Asia or South America will be much less expensive than back home.
You know roughly how much living expenses cost in the USA and Europe. In Asia, however, you’ll pay much, much less. With hostel rooms easily available at $4 per night (I’m in one right now!) and food conveniently priced at $1-$2 per meal, it’s hard to go wrong.
If you spend your entire summer abroad, these changes in price will make a huge difference in your day-to-day costs and your overall travel budget.
2. “Fun” Activities Are Expensive
At first glance it makes sense to plan your travel budget around three major costs…
Paying for these necessities is part of travel, but you might be surprised to learn that they could add up to less than half of the money you’ll spend abroad. If you’re like me, your ‘dream vacation’ includes more than sitting in your hostel bunk bed.
When I was living in Chiang Mai, Thailand, I owned a small apartment and ate delicious Asian noodles 3 times per day. With the room at $5 per night and meals for $1, I spent about $8 per day.
One of the coolest things to do in Chiang Mai is to go on a zip line adventure. It cost me $60 to get into the trees, which is about what I paid to live for 1 week in Asia. If you’re in “vacation mode” and want to go on an excursion every day, you’ll easily spend five times as much on “fun” as you do on necessities. This is true all over the world, so make sure you plan excursions into your travel budget ahead of time.
3. Plan For The Unexpected
You won’t always be prepared for everything that comes your way while traveling. You’ll want at least $1,000 in unallocated funds to help you deal with the unexpected.
First, there’s the good kind of unexpected…
When I was traveling through France on my summer vacation three years ago, I had no idea that the annual bull running festival was happening in Spain. A traveler who had just arrived from Spain told me about the festival and because I had some extra cash I was able to change my plans and attend!
After dodging horns for three days, and even having a bull leap over my head, I’m glad I had the extra money to spare.
There’s also the bad kind of unexpected…
When I entered Thailand I didn’t put a reminder on my calendar about my visa expiration date. I ended up overstaying by nearly 1 month! When I crossed the border in Laos I was politely informed I owed the Thai government nearly $400!
Ouch… Thankfully I had enough money to pay the fines. If I hadn’t, I most likely would have ended up in a Thai jail cell for a week!
Giving yourself an extra “cash cushion” is vital to your safety and the enjoyment of your trip. Especially if you’re new to travel, knowing that, if necessary, you could buy a one-way ticket home from anywhere in the world is a comforting thought.