How to Have a Budget so you Can Travel the World
Going off my earlier post I wrote on Friday it’s important to have a budget so that you can actually travel the world. People seem to think that traveling is very expensive but the truth is, if you spend your time and money and make an effort to have a budget… travel is actually in anybody’s reach. But to start seeing the world you must have the following…
Your Finances in Order
And how do you get this in order?
Have a Budget!
And also you must ask yourself these questions
Where would you like to travel to?
When would you like to go? (this could make the price of your trip drastically expensive or drastically cheap).
How much will this trip cost you ALL together… including hotels, food, excursions, and any other extras you want to do.
Do you have any frequent flyer miles or hotel points so you can save money for your trip?
The best advice I can give to anybody is to look on forums that exist on sites like lonely planet, websites like mine or ask any of your friends if they have traveled to wherever you want to go. Word of mouth is probably the most powerful form of knowledge and having a first hand account is more valuable. Knowing what you would like to do while traveling and what you wouldn’t like to do is also important to consider. Remember that it’s okay to be spontaneous while on your travels. Save extra money and time during your vacation so you can do something that wasn’t included on your original travel budget!
Picking a Place to Travel to…
So you have picked a place!? For my example, in this post, lets say you have picked Paris, France and you live in the continental US (where you live in relation can drastically effect the airline ticket price). So to go through an example I will use my city, Chicago, IL, as a starting point to show y’all how I figured out how much money I need for this vacation. This vacation will be in 1 person pricing and is for 11 days. Note: Most people have a partner or more… so cost can be shared!
Chicago, US to Paris, France
(as of March 2013)
Dates of Travel
I want to travel during the summer; so anywhere between June 2013 to August 2013. I want to be flexible with my travel plans so that I can find the best deal (but sometimes you can only go on a specific day). Work with the dates and see what comes out as the most expensive. Traditionally flights in June and July are the highest for European cities like Paris. Websites like Kayak have a cool toolbar where you can play around with the dates to compare airline prices. Use multiple websites to compare prices for the same period you want to travel to (it just gives you a clear idea and the cheapest ticket for the time period you want to travel).
A list of all the websites to consider using…
The prices I’m going to list are for one person. So if you are traveling with two people or three people… then just double or triple everything.
So I’m trying to get to Paris during the summer. Typically this is the height of travel for Europe. If you go in winter you can save more money compared to the summer. The cheapest month for booking now is clearly August. So if it’s not a problem to go to Paris in August for you it will cost you around $950 for a return ticket to Paris and back. This is also with a connection in Stockholm, Sweden with a long connection on the way back from Paris. For all example purposes lets just say you’re comfortable with the long layover in Stockholm (gives you a chance to see Stockholm for a day).
(click the picture below for a bigger picture. This search was for Sat, Aug 17th to Wed, Aug 28th, 2013)
When getting hotels I would look at website like hostelworld.com (if you’re into that type of travel) or if you can afford a normal hotel… look at websites like hotwire.com or travelocity.com. For this example I want to get a hotel from the 17th to 28th. I would like a decent hotel near the city. In this example I found a room for as little as 100 dollars a night for 11 nights. This total would come out to around 1,100 dollars for an 11 day stay in Paris (which is actually not that bad at all). So if you are traveling with a partner your grand total would be 550 dollars. Not bad for an 11 day stay in Paris.
(from Hotwire.com for Aug. 17th to Aug. 28th, 2013)
Well you have to eat while you travel! The way I’m going to add this up is I’m going to give an estimate… I’m going to give an average comfort level of eating food that is somewhere between fast food and a sit down meal.
While you are traveling do you plan to go to the grocery store to save? Are you eating out every meal? Have a realistic budget before you go… If you are dying to go to a certain restaurant then put money aside and have no regrets about spending money there. Places like Paris have fantastic food and this is equally part of the experience being in France.
For one person I’m going to budget about 10-30 dollars for food per meal in Paris. 30 dollars will get you a nice set down restaurant while 10 dollars will get you a fast food (like sandwich’s or street food drink included). Don’t be afraid to try their local grocery stores or markets so you can make your own food (this is actually a lot of fun, you will save off the estimated price and I highly recommend it).
Any Excursions (museums, entrance fees, etc…)
Have a set budget the what you are going to do while at your destination. What does you destination have to offer!? For a city like Paris you are going to want to travel up the Eiffel Tower, or go to one of the several museums, etc… So for general purposes I will budget around 100 dollars for excursions in Paris. This is a general number and it really depends on how much museums and monuments you would like to do. Also this is to help you plan for your next trip and get you thinking about these type of extras when you travel.
Any Extras (souvenirs, miscellaneous)
I would budget in extra money, just so you have backup for when of an emergency and if you want to buy souvenirs. These days I actually don’t buy many souvenirs or extras because it can be a waste of money. If you really do like an item then make sure you have enough room to carry it back in your suitcase. Make sure the item is safe in your suitcase so that it gets back in one piece. (I’ve carried back many heavy chess sets from Mexico and it can be exhausting)! For our fictional trip to Paris I will budget about 200 dollars for souvenirs and any extras needed.
Look Over How Much You Can Save
Do you have any miles that you can use for your trip? Can you save on the hotel by using points or miles? Find any way possible to save on your trip. For our fictional trip I’m just going to say that we are NOT using any miles for our trip (which would save on the airline ticket) and we are paying out-of-pocket for the hotel. My website is designed so that you never have to pay full price while you travel but the reality is that most people still do.
And now for the full price of our fictional vacation….
1 person, 11 days, comfortable hotel = $2,700
2 persons, 11 days, comfortable hotel (splitting) = $2,150
1 person, 11 days, comfortable hotel, ticket paid using frequent flyer miles = around $1,800
2 persons, 11 days, comfortable hotel paid using points, airline ticket paid using frequent flyer miles = around $1,200
2 persons, 11 days, hostel or couch-surfing or hotel using points, airline ticket paid using frequent flyer miles = under $1,000
If you notice there is a range of prices for the same vacation above. All are possible prices to pay for the same trip to Paris but the less you pay means the more points and miles you are using to save on your costs or you are sacrificing your hotel and staying in a hostel or couch-surfing. (There are always tricks and ways to save money). To help you with further travel info on how to save on any vacation I plan to introduce a Credit Card Page (giving you information to the best travel credit cards to have), Frequent Flyer Page (how to use your frequent flyer miles to travel the world), Budget Page (how to budget for you trips both before and during your travels) and Travel Deal Page (up to date travel deals that are worth looking into). Look for the links within a month from now.
Have a Plan to Pay for your Vacation
So now that we have our trip in mind and know how much it’s going to costs… How are you going to get the money to pay it off? Maybe you already have money saved up and this trip could already be paid in full. Therefore make the purchase and have a great time!
But if you don’t have any money saved up or very little… Make a plan! How much time do you have before you need to make your purchases? How much can you save each month? Get a calculator out and start to make calculations with how much money you need to save with every paycheck. This will give you a clear idea if this trip is affordable or not. And if not then edit your trip or pick a cheaper place to go to.
Have a Time Frame
Look at your schedule and see how many paychecks you have until you need to make all of your purchases for your trip. You should know how much money you will be making and how much you need to save before you can make all of your purchases. Of course you will probably have to make some sort of sacrifice to your lifestyle and learn to save. Make a budget and look at what you spend your money on. What can be cut back? What can’t? Write it all down and see how much money you can save each month with the amount of income coming in. Is it enough? Can you still live comfortably and still save for you trip? Some people only need a couple of months to save up and some people need longer…
Pick Up Extra Hours
If you need to work extra hours to cover the money for the trip than I would suggest a second part-time type of job or pick up more hours if possible. For me I would work for any type of vacation. Perhaps you can edit your vacation to make it a little less expensive. If you want, you could couch-surf or stay in hostels to lower the costs. Do you have could credit? Than use a free ticket using your miles. If you’re not comfortable with this perhaps pick a destination that is cheaper. If you don’t want to do that then you’re going to have to find a way to make extra money for your trip. For many any amount of work is worth it to travel and it’s better to know how much money you actually need to be comfortable.
Find new ways to save money (Travel Hack)
Maybe you want to extend your vacation and you are already saving and working hard. Find new ways to Travel Hack. Look at cheap destinations, couch-surf look for cheap hostels, eat at local grocery stores, sell any possessions you have. Many people travel the world for months and sale all of their possessions. I guarantee that you will not regret that decisions. Experiences will stay with you for a life time while possessions are only temporary.
Like I said above, I plan to introduce more ways on how to Travel Hack so that you can save while traveling. I want to give more Travel Hacking ideas so that you know how to plan think like a master traveler.
Bottom-line… I use to travel without a well-defined plan on how much money I could spend, etc… I use to go to countries and not worry about the exchange rate or how much money I could actually spend in one day while traveling. Dream up a destination and look up the prices for when you want to go. Do your research and look on forums and websites that will help you get idea. You can easily gather information on travel costs and how much money and time you need to spend in one place.
In Europe your money won’t get you as far as Asia… so destination do matter. It’s always great to plan well in advance so that you have time to save money. If you’re comfortable with cheap hotels or hostels than that will definitely save you cost during your travels. If you’re not comfortable with this idea, don’t do it. Save your money and spend it on a quality hotel. Traveling is stressful enough and you want to be comfortable while doing it. If you are not; it can be a distraction from your trip.
- First priority is research.
- Second priority is understanding the daily costs during your travels.
- Third priority is to know when you are going and for how long.
- Fourth priority is do you have money now or do you need to save? When do you need to have the money by?
- Fifth priority is to make a plan to save if needed. Work extra hours. Cut back on your expenses. Make sacrifices. Plan a budget and follow through.
- Sixth priority is to review your plan and account for any mistakes or extras that need to be on the budget. Make changes if you want to do less or more on your travels.
- Seventh is to conquer the world!
I hope this mini-guide helped so you can start planning your next vacation. Remember that when you plan and budget your travels you will have a smoother time. No one wants to worry about money while traveling! Stayed tuned for new pages that will help you with ideas on budgeting for your travels as well as new ways to travel the world, without sacrificing quality, for next to nothing prices!
images by: shawnvoyage, flickr