Managing a travel budget while on the road can be really difficult
If you find yourself struggling to keep track of spending while you’re distracted by the excitement and adventure of being in a new place, you aren’t alone.
For many of us, the distraction and excitement of travel can make it easy to spend more than we anticipated and, as a result, quickly go over budget or even into debt while traveling. In this article, I share a few of the strategies that the WanderBig community of travelers uses to stay on budget and manage money while traveling.
Choose to be Mindful of Finances
To stay on top of your budget while traveling: first, be intentional about your mindset when it comes to budgeting.
It’s easy, in the heart of the trip, to not look at finances for a few days and, after time, to just avoid looking completely.
Although it may soothe anxiety at the moment not to look at debts and balances, it’s better to manage small amounts of budget-related anxiety mid-trip than it is to nurse a growing mountain of dread.
Avoid falling into this trap and landing in financial trouble during your travels by committing to regularly check balances and track expenses. Just 2 to 3 minutes at the end of the day can help you continue with your travels confident of your budget and how much you can spend. With that knowledge, you can make adjustments to your travel and know that the decisions you’re making that are good for your travel budget.
Use an Expense Tracking App
There is no shortage of apps for tracking expenses – Mint (mint.intuit.com) being the most popular. Now that mobile data and wi-fi are available just about everywhere in the world (read how I checked email and shopped online from a floating island in Lake Titicaca), it’s never been easier to stay on top of finances while traveling. Researchers know that novel experiences, like travel, make us more inclined to spend money (source), so it’s particularly important to choose a way to keep on top of spending while traveling even if it’s not an issue when we’re at home.
Set up Custom Expense categories
For best results using an expense tracking app for budgeting during travel, set up some custom expense categories before leaving home.
For example, an expense tracking app might group hotels, museum entrance fees, tours fees, and flights all under the category of “Travel” but to effectively manage a budget while traveling, you’ll need a better breakdown. Instead, create custom categories like “Hotels and housing,” “Transportation,” “Dining,” “entertainment,” and “souvenirs.” Having these buckets already set up in your expense tracking app will make it much easier to quickly categorize your expenses at the end of the day and help you stay within your travel budget
Budget for Daily, Weekly, Monthly, and Trip-Long Expenses
If your trip is more than a few days, you’ll need to think about how your travel budget breaks down over time.
If you leave for a month in Europe with $10,000 budgeted for the trip, but neglect to designate how that money will be spent, you could easily end up two weeks into your trip without enough money to pay for even basic accommodations for the remaining weeks of your trip!
For that reason, every traveler should give some thought to a daily budget. Knowing roughly what you can afford to spend each day helps you make better decisions throughout the day in regards to money. Knowing a weekly budget means that you can make good decisions and adjust for travel days that are particularly expensive or that come in under budget.
Don’t Spend all your Money Traveling
When budgeting for travel, it’s best to avoid planning every penny of what you’ve saved to travel with. Unexpected travel expenses will pop up. Just like in everyday life, it’s important to have a little bit of a buffer or emergency fund to pay for emergencies. Keeping about 10 to 15% of your travel budget on reserve means that you’ll be able to adapt if needed.
Hint: for American digital nomads who are living abroad for a time, it’s particularly important to budget sufficiently to have enough money to re-establish yourself in life when you return to the United States. Since many apartments require first month’s rent, last month’s rent, and a deposit, you may find it hard to rent an apartment if you’ve depleted your budget on international travel.
One Major Travel Budgeting Tip
If nightlife is part of how you enjoy new cities, you’ll want to monitor your spending on alcohol.
One of the best ways to do this for travelers is to budget a small amount of paper currency for drinks and take only that amount of money when you go to a bar or club (alternately, a secondary debit card loaded with only as much as you’ve budgeted to spend for the night can also help keep spending on drinks and nightlife in check).
If you know that you can be an it impulsive spender – especially after a few drinks- leave your credit card behind locked in the hotel safe or hostel locker and instead take only enough cash to drink as much as you decide in advance you want to spend. This tip can prevent unplanned expenses that could throw off your budget for the rest of the trip.
Keep your budget in check by booking hotels in advance
Whether your preference is hotels, hostels, or Airbnbs, one of the best ways to manage your budget while traveling before you ever leave home is to book your lodging in advance. Booking places to stay while you’re still at home and able to evaluate all your choices can be a great way to help make sure that you keep your budget in check throughout your trip.
This can, occasionally, backfire if you are likely to change plans spontaneously. If you enjoy the freedom of an open-ended itinerary, avoid potential cancellation fees by instead booking your travel city by city, with a predetermined budget in mind.
Lynli Roman’s unique approach to travel is informed by a Masters Degree In Counseling Psychology, previous work as a research assistant, and decades of experience growing up on the road with a traveling family. When she’s not writing Seattle-focused content from her Pike Place Market apartment, Lynli writes on-location while conducting hands-on research in each destination she covers. Lynli’s writing has been featured by MSN, ABC Money, Buzzfeed, and HuffingtonPost. She is passionate about sharing information that makes travel more accessible for all bodies.