How To Follow A Travel BudgetPosted on Oct 29, 2011 | 17 comments
What does budget travel mean to you?
My first thought was cheap deals and discount airfare, but then I realized that budget travel is about so much more.
A budget is about discipline, it's something to be followed. To me, budget travel means having the ability to make your travels fit your budget so you can sustain a travel lifestyle.
Recently, there was an article by Warren and Betsy Talbot at Married with Luggage that showed, down to the dollar, all the money they spent in a year traveling the world, and they didn't spend much. It cost the couple only $24,140 to travel for 365 days to countries like France, Belgium and Argentina. By simply tracking their expenses and taking advantage of opportunities such as housesitting, the Talbots were able to travel extensively for very little money.
I have found that the cost of long-term travel varies greatly for each individual or family. Some, like Nora Dunn, claim that you can travel for a year for under $14,000, while others may spend up to $80,000.
For me, the cost of your long-term travels comes down to two things:
Are you willing to sacrifice for your budget? Can you walk away from the pull of a 5 star hotel that's only going for $130 a night?
2) Budget Tracking
Are you disciplined enough to follow and track you daily expenses so you can stick to your budget?
Both are essential for staying under budget and traveling on the cheap.
How We Always Stay Under Budget When We Travel
This is as easy as it gets folks, and I guarantee that if you follow this method closely, you will save a ton of money while traveling.
Decide On Your Travel Budget
We set our travel budget at $100 a day or $36,500 a year. You just have to pick a reasonable, achievable, annual budget for your family and divide by 365. This will give you your Daily Travel Budget and this is the number you need. Like I said, for us, our Daily Travel Budget is $100.
Calculate All Your Pre-Trip Expenses and Adjust Your Daily Rate
It's up to you to include what you want in this, but if you are saying it costs $25,000 a year to travel the world and you are not including passports, visas, insurance, and pre-booked flights, then you're not really giving an accurate assessment for others or yourself. You may think you're spending $25,000 a year, when in fact it is much more like $35,000, and this can be a big shock when you come home.
Once you decide what to include as "pre-trip expenses", total up the damage and deduct it from your overall budget.
Annual Budget: $ 36,500 - Pre-Trip Expenses: $6,000 = Adjusted Budget: $ 30,500
New Daily Rate: $83.50
Now you have a nice new number and don't have to worry about your past expenses while you travel.
The Notebook, and Finding Your Magic Number
I don't believe you can keep an accurate daily budget on an app while you travel long-term. Connectivity and power are just too unpredictable. Budgeting needs to happen daily, almost hourly. You need something small and handy in which you can document your spending right away - before you conveniently forget that $5 cup of coffee you had in Paris.
Get a cheap, small notebook. This will be your daily travel budget log. Don't worry about losing it, we will deal with that in a bit.
Simply begin to track everything you spend.
Every day you track your expenses make a note if your balance is + or - and by how much. This is the only number you need to keep in your head. This is your Magic Number.
Monday you were $20 under budget, so you're magic number is $20, but Tuesday you went over by $12, so you're magic number is now only plus $8. And if and when you lose your notebook, you can just start again as long as you know your magic number.
Here's an example:
October 2, 2011 - Magic Number $65 - Philadelphia Day Trip
Breakfast and Coffee: $13
Gas: $45 fill up.
Lunch: From grocery shopping day before.
Dinner: $24 Philly Cheese Steak at Gino’s
Ice Cream: $10 Capagiro’s Gelato
Museum Entrance Donation: $7
Total For Day: $125
Budget Difference: $41.50 ($125-$83.50)
New Magic Number: $23.50 ($65 -$41,50)
What our family does is tend to splurge when we have worked our budget up to plus $300 or so. We lay low and run around the campsite for a few days and then head off to the big city. It works. And after a year of doing this you may become so aware of your budget, you won't need to track it anymore. Until then, I seriously recommend daily budgeting if you want to travel long-term.
Many will say that budgeting this way kills travel. That it crushes spontaneity and adventure, but I haven't found this to be the case. In fact, it does quite the opposite. It takes the second guessing out of the equation for you. When you find yourself standing in front of a place that is just begging you to indulge, you no longer have to ask the question,
Can we afford it?
Now, you just look at you notebook. Either you have a big enough magic number that day or you don't, and you move forward. And if in fact you know you will be in Paris in a few weeks and need to have that cup of coffee or climb the Eiffel tower, than start building up that magic number in advance. Just because you're budgeting, doesn't mean you lose freedom and the power of choice.
Next time you take a short trip, give this a try. Or you can even try it at home. It works. And if your funds are limited and you want to travel forever like us, it's pretty much a must.
OK Escapists, that’s it for now, but make sure you come back and check in on our progress in our quest to travel forever. We promise we’ll put everything we’ve got on the table for you.
Thanks for the visit, and best of luck with your adventures!