How to Make a Travel Budget and Stick to it

Estimated read time: 5 minutes

Travel is one of life's greatest pleasures, with the planning, the anticipation, the new experiences, the memories, but too many people deny themselves the experience because they think it's too expensive.

What Kind of Vacation Can You Afford?

The first question is international or domestic? In most cases, if you choose international it means buying a plane ticket, which will be a big portion of your travel budget.

The next question is how long will your trip be? Obviously, the longer the trip, the bigger your travel budget.

If you can't afford airfare or don't have a lot of vacation time, you still have a lot of options. You could take a cruise, drive to a nearby area with a lot of attractions, or even check into a hotel right in your own city for a staycation. (A staycation in your city is a really underrated option!)

Once you answer those questions, choose your destination.

When checking out things to do on your trip, see if there is a local Groupon, LivingSocial, Travelzoo or similar deal site.

Research Potential Costs

A word about choosing a destination. Don't get too attached to a particular one. The one you have your heart set on may be out of your budget. It's better to have a type of destination in mind, like "the beach," "a city," or "rustic retreat."

Come up with three or four different places that fit the bill. Once you have the list, start doing preliminary research into each. Look at things like the cost of flights, transportation, lodging, food, and activities.

Once you find the destination that best fits your travel budget, you can take a deep dive into the cost of things.

How Much Will I Need?

This is the best travel budget tip you will ever get. If you're traveling internationally, make two budgets. One in American dollars and one in the local currency. You can enter your allotted budget amount into a currency calculator and get the conversion.

This tip is important because traveling abroad can be disconcerting. You're in a foreign (literally and figuratively) place, you're jetlagged, and the currency is different. It's not the best time to put your math skills to the test. "Is €18 too much for a glass of wine or a great bargain!?" In the heat of the moment, your brain can't always keep up (and for the record, €18 is too much).

Once you have your dual currency budget, you can start budgeting for the various expenses that are part of traveling.

Transportation

A plane ticket is what comes to mind when most travelers are planning their transportation budget, but it may not be the only transportation expense. I was in for a rude surprise the last time I went home to New York. The trip from JFK to Manhattan after tolls, tax, and tip is about $80. I had to pay the same $80 to get to the airport for the flight home.

Transportation can also include airport parking, a rental car, ride shares, and public transit.

Lodging

Not long ago your options were limited to a hotel, a hostel, or crashing on the couch of an accommodating friend or family member. Now we have things like Airbnb and Couchsurfing to give us more, and often times lower cost options.

When choosing an area to stay in, consider how far it is to the areas you plan to go sightseeing. This can make a difference in your transportation costs.

Food

This is the most fun category to budget for and one where you can save a lot of money. No matter how much money you have for your travel budget, no one needs to eat out three meals a day for their entire vacation.

If your hotel offers free breakfast, eat it. A lot of it. If your lodgings have a kitchen or even a fridge and microwave, find a grocery, and buy some things like yogurt, fruit, cheese, and bread. Eat breakfast "at home" before you head out. Breakfast is the least fun meal to eat out anyway no drinks (unless you're in New Orleans), no appetizers, no dessert. Why spend money on it?

Activities

People often overschedule their vacations. You can't do it all in one trip, and a vacation is supposed to be relaxing! Pick just one major attraction to visit each day, like a museum, a walking tour, or an amusement park.

Look for discounts. Students, seniors, children, military members, and members of certain groups (AAA, AARP for example) may be eligible for discounted entry to tourist attractions.

Tips for Saving Money on Your Trip

If you can be flexible with your travel times you can often get cheaper prices on airfare and lodgings. Both have certain times of the year and days of the week that are lower cost. Summer and weekends are some of the most expensive times to travel. The same goes for your destination. Beach towns are more expensive during spring break, for example.

If you're staying in a large hotel, they may offer a shuttle service to and from the airport, which will be cheaper (sometimes free) than a cab or rideshare. Many public transit systems offer discounts for buying rides in bulk. In Paris, if you buy a carnet of metro tickets (10 tickets), it's cheaper than buying ten individual tickets.

If you want to eat at a pricey restaurant, see if they serve lunch. You can often get the same food (sometimes in slightly smaller portions) for a much cheaper price at lunch than at dinner.

America invented Happy Hour (one of our better ones), but it's not exclusive to us. Find a few good Happy Hours in your destination city. Plenty of bars and restaurants offer not only drink specials but food deals too.

When checking out things to do on your trip, see if there is a local Groupon, LivingSocial, Travelzoo, or similar deal site. You can not only find deals on events and tourist attractions but restaurants too.

When choosing a credit card to use on your trip, if you're going abroad make sure to choose a card with no foreign transaction fee. The charge can be as high as 3% on every transaction.

Be sure to call your credit card company and let them know you're going on vacation and to where. Many companies will shut down a card if they see transactions well outside of a card holder's normal location as a way to avoid fraudulent charges.