Introduction to Travel Budgeting
Written by Jared
March 23, 2011
Financial planning is one of the least glamorous aspects of being a world traveler. The good news is that maintaining a budget gets easier as you go along. Given time and effort it becomes an indispensable tool rather than a mindless chore.
A budget is your safety net against the financial risks of traveling. It helps to you validate your plans before you leave. On the road it keeps you aware of your financial situation. It is also a guide for making daily decisions and for planning the next leg of your trip.
All Travel Budgets Are Created Equal
Creating a travel budget is the same process whether you’re planning a two week vacation, a four month road trip or a two year round-the-world extravaganza. It doesn’t matter if you’re funding your travels from savings, income earned on the road, or both. The process is the same, only the numbers change.
The following articles outline the steps we recommend for creating and maintaining a budget and will answer the most common questions about travel budgeting:
- What to Consider before Creating a Budget. What processes and tools should I use to create my budget? How should I organize it?
- How to Create a Budget. What goes in my budget? How do I estimate my expenses?
- Financial Planning for Emergencies. How do I plan for the unexpected? What kind of backup plans should I have?
- Handling Credit Cards, Cash and Bank Accounts. How do I manage my cash on the road? How can I keep from getting ripped off by my bank?
- How to use a Budget on the Road. How do I keep my budget updated on the road? How can a budget make my life easier while I travel?
- A Sample Budget. Help! This seems like a lot of information, can I see how you guys do it?
Not All Travelers Are Created Equal
There are a plenty of options for creating and keeping a budget, as with any type of planning. Some people prefer simplicity and flexibility over the hassle of maintaining a detailed budget. We’re not here to advocate one method over the other. We’ve done both in the past with equal success. You shouldn’t lose sleep over your financial situation. Whether that means staying up all night totaling receipts, or having nightmares about running out of money in a foreign country.
Crunching numbers is unavoidable for a digital nomad, your livelihood may well depend on it. Travel budgeting isn’t the same as household financial planning. Day-to-day tends to be simpler but initially there is much more to be done.
If you’re good at managing your personal finances at home then some of our advice will be familiar. If you’ve never heard of financial planning, let alone a spreadsheet, you have a bit of catching up to do.
These Are Not The Budgets You Are Looking For
The articles in this section explain how you should create and maintain a travel budget. There are additional money management articles on becoming financially literate, saving and living cheap later in this section.
We have found it more practical to keep the accounting of our remotely operated businesses separate from our travel budget. For information about managing business finances and working while you travel, please refer to our Freelancing and Managing a Business sections.