I am not the one to come to for budgeting advice. Fortunately, I have people in my life who are money gurus. My mom is the family finance babe and is forever updating budgets for me and my sister to follow (with various levels of success).
Fortunately, I’m a little more motivated to budget for travel than I am for everyday life. Travel is one of my main priorities. And since I travel so frequently, I have to be wise about my spending. This plan is intended for those who travel frequently but of course, works for the occasional traveler. This is what works for me and how I budget for a travel lifestyle
1. Set A Goal.
As with any goal, you got to start with the End in Mind or Begin with your WHY. Budgeting for a travel lifestyle is no different. Start by thinking about what you’re saving for. I have two goal-setting methods.
Method 1 Travel Budget Based On Location
Decide on a vacation. Price out all the expenses for that destination. Then save toward that trip. For example. Perhaps you want to go on a Mediterranean cruise. The cruise itself is all-inclusive and costs $2000. The Flight to the port will cost you $400. Airport parking or transportation to the airport will cost about $150. Then you want to save $1,000 for excursions, additional meals on shore, massages & facials, gifts, and other extraneous purchases. Pet sitting or house sitting during the trip may cost $1,000.
This trip will cost you $4,550
Take your time and start saving. Give yourself as long as it takes to reach your goal. The world isn’t going anywhere (for the most part…I mean climate change and political upheaval can certainly put a wrench in travel plans). There’s no need to rush or put yourself in a financial fix or mental health predicament by overextending yourself over a travel budget.
I like this trip savings calculator by mint. Travel Budget Calculator – MintLife Blog (intuit.com)
Method 2 Travel Budget Based On Time
Save your money for an allotted time, then determine where you will go based on how much you have. The key here is to find the best deal based on the money you have. Perhaps you know you want a birthday trip but not sure where you want to go just yet. Or maybe you want to go somewhere for summer vacation or to ring in the New Year. So your travel dates are 4 months out. Start Saving putting away money and as time grows closer (say, six weeks out), decide where you’ll go based on what you can afford.
With $1K USD, you might travel somewhere in the off-season but that’s enough for a solo belle (or beau) to take a nice trip. You might be limited on how far you can go and how long you can stay but, you can go somewhere. With tour agencies, like G adventures, you can take an 8-day trip around Morocco for as little as $800. With a budget of $2,000 so much of the world opens up to you.
Since I travel internationally multiple times per year, I do both Travel Budget Goal-setting methods.
So now that we have two goal-setting methods to budget for travel let’s figure out how to budget for those methods.
2. Assess How Much Money You Have and Where you Are Spending Your Dollars. Pull out all your bills, bank statements, and receipts (even those sent to your email) to track and account for every penny of your past three months. You’re likely to be surprised when you’re not guessing where you spend the most money. See how much money you have to work with after the bills (including your savings) are paid. See where your frivolous spending adds up ($20 shopping sprees at the Dollar Tree buying…random knickknack anyone? No? Only me? Ok.)
3. Reduce Spending. Figure out where you can cut your expenses. Start with subscriptions. Do you really need both an Audible, Book of the Month, and Scribd subscription? Can you cut one of your movie subscriptions?
If you cut a $15 Audible subscription, $12 Prime subscription, $10 Netflix subscription and put that $37 a month directly into a travel sinking fund — You’ll have $444 in a year. That is a plane ticket for most places within your own hemisphere. Or a month’s stay in a hostel.
Search for free entertainment activities. Don’t center your social events around restaurants. Wait a day or two before you impulse buy nonessential items. Cook what you already have in your pantry.
4. Make More money! Side hustles, second job, make it happen. My best job was working after school program for the YMCA. I had so much fun spending my afternoon with little kids. IT didn’t pay much. But those little $200 checks here and there, that I wouldn’t have been getting otherwise, really added up when applied to a travel saving. There are tons of ways to pinch pennies here and there when you’re focused on a goal.
5. Set up a separate fund dedicated specifically for your travels. Shop around for banks with high-yielding accounts and savings programs. Then automatically deposit a recurring set amount each month or with each paycheck. Of course, you’ll want to travel credit card (compare Chase and AmEx) that works for you.
6. Claim Your Travel Lifestyle. Some people have a sports lifestyle. They buy season tickets; they go to away games. They invest in the big screen, surround sound, host game parties, rent the camper for tailgates, have the outfits…the whole 9 yards (10 yards? 50 yards? Idk, I’m not a sports person). And they don’t get married during football season. And maybe spending a lot of time and money going to art galleries and buying sculptures is not their thing.
If travel is your lifestyle, maybe you’ll do less of everything else so you can travel more. Perhaps you’ll have a smaller home (since you’re hardly there anyway). Perhaps you miss exquisite parties that require a new outfit and hair in favor of an extravagant hotel on the cliff. Maybe, instead of spending money on luxuries at home, you hold off until you can do them abroad (nails, hair, and massages are often cheaper in other countries).
7. Do not neglect your long-term savings & rainy day fund. Travel is not an excuse to dip into your future. Your sinking account for travel is not the same account for long-term savings. You never know when a global pandemic (or other semi-natural disasters) might come along and you’ll need your savings to live.
It might not be fast turnaround but little by little you’ll watch your travel budget grow and have a decent-sized travel fund before you know it.
