Budgets are perhaps a little boring for some (not Jess, she loves a spread sheet!) but they are absolutely necessary to ensure that you can travel for longer and do everything that you want to do. Don’t get caught out and have to go home early, a little planning goes a long way! Here is our guide on how to budget for long-term travel.
Getting started – Save, Save, Save
- Firstly set your travel goal, and try to be specific. Where exactly do you want to go? Approximately how long do you want to travel for? Are there deal breakers that you must include in your itinerary? It’s a bit of a chicken and egg situation as you won’t know what you can afford until you know what you want to do and vice versa, but you have to start somewhere, and you can always scale it back.
- When you have a rough idea on point 1, break the plan down and set a saving goal for each item:
For example (fictional prices!):
- Flights £900
- Basic expenses for 3 months in Central America: £2,000
- 3 weeks of Spanish school in Antigua, Guatemala: £600
- 1 week diving course in Caye Caulker, Belize: £600
- Pleasure flight over the Great Blue Hole: £160
- Tours £200
- Travel insurance: £300
- Bags and preparation: £150
- Write your travel goal and your saving goal down, and put it somewhere prominent where you will see it every day. You are far more likely to follow through on a project if it has been crystallised in writing where you can tick off milestones that have been reached.
- It’s much easier to save if you don’t have the opportunity to go back on your word. Have an automated saving plan that takes money straight out of your account on payday, and puts it into a separate ‘travel fund’ account.
Make your monthly saving realistic, otherwise you are going to be constantly dipping into your travel fund when you run out of money.
Before you go – Spend, Spend, Spend
What can you buy in advance? If you are working now then its going to hurt a lot less to buy something that you need each month rather than trying to buy it all a week before you go. Examples would be the big three (aka the traveller’s holy trinity): flights, a backpack and travel insurance.
- Make use of Christmas and birthdays. Ask your loved ones to buy you specified items (don’t let them choose), or ask for a contribution towards your travel fund. This can help get some boring items out of the way. Parents (if they are still speaking to you after you announced that you are going travelling!) will always be happy to buy things that will keep you safe like travel insurance and vaccinations, as those are the sort of things they will fret about!
- Buying items for your travel in advance also gives you something to get excited about and makes your plan more real!
- .. don’t overdo it, set a small budget for buying items when you get there, chances are that things like clothes will be cheaper.
To keep in mind – Weather and public holidays
- Does the time of year that you are going affect your budget? Are you going in peak season, where the prices for flights, accommodation and activities will be higher?
- If you are going out of season, is the weather going to be markedly different? Bear in mind that you might need different clothes or equipment. Whilst it may be cheaper, bear in mind that some activities may be seasonal and that you might not be able to do everything you had planned.
Budgeting – Budget for the basics, set a daily limit
Budgeting for the basics need not be difficult; in fact, most budget travel guides have a summary section for each country which will tell you the prices for accommodation, travel and food. If you are travelling through multiple countries then you just need to make a quick average of the prices. It is then advisable to add 30% to allow for error and to cover unexpected expenses. For example in Costa Rica we had to book a flight from Tortuguero to San Jose. We had originally planned to travel by boat and then bus, but the water level on the rivers was so low that the boats were unlikely to run.
If budget travel is not what you are after, then you can make use of a website like AIRBNB which will tell you the average cost of accommodation, filtered by your preferences, per night.
Budgeting – Budget for your travel
Whilst most backpackers will use public transport, if you are not on the tightest budget, you will sneak in a few flights to cover long distances and you may also want to rent cars. Of course this type of travel will increase your budget and sometimes it is not as cheap as you were imagining it would be! The internet is your friend here so have a quick look at some comparison websites to get an idea of these extraordinary costs.
Budgeting – Budget for your activities
Once you have you basic budget, you will need to consider what the costs for tourism and specialist activities/sports will be. What are those tours or activities which you just can’t miss? Luckily the internet is awash with company websites and blogs, so you should be able to pull the data together easily.
Budgeting – Budget for your lifestyle
Do you like to treat yourself to a nice meal or a massage? Do you drink, do you smoke? Are you a keen diver? These are all extra costs to consider. Remember to also include a small amount for personal care items and toiletries and medicines.
Budgeting – Budget for gifts
Don’t kid yourself; you will end up buying a sack full of trinkets or indeed very high quality artisan goods. It’s nice to have mementoes of travel and even nicer to give gifts to your loved ones. Just set a small but realistic budget.
When you are there – Track your spend
It’s no use having a budget and then having no idea whether you are sticking to it. You could write down your daily expenses in a notebook, or, more conveniently you could download an app for your mobile phone. We used one called Trailfinder which allows you to enter a “trip” with a daily budget. You’ll be surprised how addictive it gets to record your transactions, and try to keep in budget. It will also help you get to grips with the local currency relatively quickly. You can create all the categories of spend that you like and then see them displayed in a pie chart.
Do remember that the way you are recording your expenses is not 100% accurate, make sure that you check your cash, credit card and bank balances regularly to make sure that the two are in sync.
Latin America 2015/16 – What was our budgeting experience?
As travellers, we are not really budget backpackers, but at the same time we wanted to travel for as long as possible and also as authentically and cheaply as possible. Our only real requisite was to always have a double room with a private bathroom, otherwise we were up for saving money wherever possible. That said, we did fly when we thought it was necessary, we did include some biggies like The Galapagos and Easter Island, and we did rent some cars in order to have more comfort and flexibility.
We planned to spend an average of £70 a day for two (to include everything), and in the cheaper countries such as Boliva, Chile, Peru, and Nicaragua, this turned out to be a reasonable budget. The more expensive countries like Argentina and Mexico saw us spending more and some of our more remote and extraordinary activities (Galapagos, Easter Island and Patagonia) made quite an impact on the overall budget. That is why it is so important to get a handle on the really big or special activities that you just can’t miss prior to setting off. It’s always going to be a trade-off between travelling for a long time and seeing those classic sights but don’t fixate on ticking the big items off a bucket list. Slow down, and explore off the beaten track, it will be cheaper and possibly more rewarding!
So, our budgeting kept us going for 14 months and it was incredibly helpful to track our expenses using the app, as it made us pay attention to what we were spending and where we could improve.