One of the common questions that first time travellers ask is, “how much money do I need to save up for travel?”
The answer is “It depends.” It depends on where you are going, how long you will be there for and what kind of travel experience you want to have.
As you make these decisions about your trip you will be able to calculate your expenses and add them up – coming up with a ballpark figure of how much your travels will cost. You might find it helpful to make a spreadsheet or to write your numbers on a piece of paper to help yourself add everything up. From there, you can make a savings plan to reach your goals and make your travel dream a reality.
First of All – Where Are You Going and For How Long?
First of all, before you start making a travel budget you will need to figure out where you are going and how long you plan to stay there.
How Long Will Your Trip Be?
Are you taking a couple of weeks off from work to travel, or will you be quitting your job and backpacking for six months or a year? The length of your trip will determine how much you need to save up. Of course, if you have more time than money – you might need to find a way to make money as you travel, such as taking a working holiday and doing odd jobs along the way.
Where Are You Going?
The other factor to consider is where you are going. This will make a big difference in how much you will need to save for your travel. If you plan to travel around Southeast Asia for a few months, you will need a lot less money than if you are travelling in Europe or North America for the same amount of time because the day to day costs of accommodation and food will be cheaper.
Once you have decided where you are going and how long you are going for, you will be able to start adding up your one time expenses and your day to day travel expenses. This will add up to the total amount that you need to save before you go. During these calculations you might find that you adjust your plans, deciding to stay for a longer or shorter time or adding or subtracting destinations once the numbers come into focus. It’s all part of the travel planning process and the more you research the clearer it will become.
Start By Adding Up Your One Time Expenses
The first step is to start adding up the big expenses. Here are a few of the major one-time expenses you will need to pay for.
Your flight might be one of the biggest expenses of the trip, depending on how far you are going. Take a look online to get a ballpark figure of how much it is going to cost. Remember that if you can be flexible with your travel dates you will have more of a chance to find cheaper flights. The website Skyscanner is a great one to use because it allows you to look at the prices for flights over an entire month and choose the cheapest day.
It’s definitely worth having travel insurance, because if things go wrong they can get expensive very fast. When Lee broke both of his wrists while travelling in Canada he was glad he had travel insurance, or it would have cost us thousands of dollars. Take a look at the different options for travel insurance and make sure that they will cover the types of activities you will be doing.
Backpack and Other Supplies
If you don’t have luggage or a backpack, you’re going to need to purchase that before you go which will be another one of your one time expenses. Backpacks or luggage really vary in price, so it’s up to you how much you want to spend. If you think you will be a long term traveller or you will be carrying your backpack a lot, such as on a long distance hiking trip, you mind want to invest in a high quality backpack. If you are going on a short trip, you’ll just need some luggage or a bag that will be suitable for carrying your stuff for the short term.
Another cost to factor in is whether you will require travel immunizations for your destination. In some situations, you might find that it is cheaper to get your travel shots when you arrive. We found that getting our Southeast Asia travel vaccinations in Bangkok right after we arrived cost $26.60 CAD compared to the $525 CAD that the same shots would have cost in Canada.
Also, you will obviously need to factor in the cost of any other specific items you need to buy for your trip. For example, if you wear contact lenses or take certain medication you will need to stock up. If you need specific clothing such as hiking boots or a warm coat for your destination you’ll have to factor that in too.
Figure Out What Your Day to Day Costs Will Be
One you have added up all of your one time expenses, the next step will be to figure out how much you will need to spend per day. Of course, some days you will spend more than others – so this will be an average.
I would recommend coming up with a daily budget that reflects prices in the mid-range of what you will spend rather than the cheapest price you can get. For example, in Bangkok you could possibly eat noodles from a street food cart for 30 baht ($0.84 USD) but to budget this much for every meal would really limit you. Sometimes you will want to spend $4-$5 to order an entree in a sit down restaurant and on a few nights you might want to treat yourself to a nicer meal and a few drinks. Your budget should reflect an amount that will allow you to have this flexibility – so that having a cheap meal is a bonus to your budget rather than a necessity.
Your daily budget should include the cost of breakfast, lunch and dinner as well as anything else you might eat or drink during the day such as water, soft drinks and beer. Also, it includes a night at the hotel, hostel, guest house or wherever you are staying. Don’t forget to factor in the cost of any activities you plan on doing, such as museum admissions and tour prices. If you think you might do some shopping while you are there too, add this to your daily budget.
Once you have come up with a number of what you would spend per day – multiply it by the number of days on your trip.
A Note on Travel Style
Think about what type of experience you really want to have. Some people love the budget backpacker experience, but others desire a little bit more luxury. There are an entire range of accommodations out there, from cheap hostels to simple guesthouses to luxurious apartment suites and everything in between – so it’s up to you to find the right balance between price and your enjoyment of the experience.
If you don’t mind sharing a dorm room with strangers then budget for cheap hostels and you’ll have more room in your budget for other expenses. I don’t mind a bargain hostel or hotel that is a little bit rough around the edges, but I know it’s not for everyone. If you think that staying in the cheapest hostel isn’t right for you and you would feel more comfortable in a private room, allow for this in your budget.
It’s no use trying to have the cheapest trip possible if that means that you are really not going to enjoy it. It might take you a little longer to save up, but you’ll have a travel experience that will make you happier.
However, on the other hand there is no need to pay more if the basic budget option doesn’t bother you. For example, I don’t mind taking a sweaty and hot bus in Bangkok with no air conditioning because it doesn’t take much longer and costs 8 baht (22 cents) to get across the city rather than the 80 baht ($2.25) it would cost in a taxi. I can handle a long bus ride between two cities because it is significantly less than the cost of flying there. I know what’s worth it and what isn’t for myself – but it’s up to you where you draw the line between comfort and savings.
Determining Day to Day Expenses
So, how do you find out how much your daily purchases will cost without actually being there? It can be tricky, but there are a lot of ways that you can get an idea of the price before you visit somewhere. Here are some ways that you can find out.
- Take a look on booking websites such as Booking.com and Agoda.com to find out what the average price of hotels, guesthouses or hostels will be.
- Make a post on a travel forum (like reddit.com/r/travel) asking for information from others who have been to that destination about what prices they paid when they were there.
- Use websites that offer data about the cost of living somewhere. For example, Numbeo is a great website that has a huge database of user-contributed data about the cost of food, entertainment, accommodation, groceries and more from cities all over the world.
- Ask someone you know who has been to your destination recently. Make sure that they travel at your same budget level – if they tend to travel in a luxury style then their numbers won’t be that relevant if you are planning a budget trip.
- Read Tripadvisor reviews of local restaurants, as reviewers will sometimes mention how much they paid for their food.
- You can also usually find menus online on the websites of restaurants, which can give you an idea of how much food costs.
- Look for travel blogs written by people who have visited that destination. Many bloggers will publish a detailed breakdown of how much their trip cost.
Add 25% Extra Just in Case
Once you have come up with your per-day budget, multiply it by the number of days you will be travelling. Then, add that amount to the total of your one-time expenses to get the total for your trip.
Then, add 25% extra to that total just in case.
This extra is there to help you out if things go wrong. There is always a risk that you might get overcharged for something, you might get pickpocketed, something might cost more than you expect or you might want to have the option to do a really cool spontaneous activity that you didn’t plan for.
Instead of saving up an extra 25% you could also bring a credit card with you. I don’t usually advocate relying on credit cards as a way to fund your trip, but it could serve as a backup if you need it.
Having an extra cushion on your travel budget allows for this flexibility – you never know what might happen.