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What to Consider before Creating a Travel Budget

Written by Jared on March 20, 2011

Choosing the tools and processes you will use to create and maintain your financial plan is the first step towards budgeting for your travels. To help get started, ask yourself the following questions:

  • How do you currently keep track of your personal finances?
  • How much time do you want to spend updating your budget?
  • What financial details are important for you to keep track of?
  • Do you prefer paper or digital records?
  • Do you currently use software to assist with financial planning?

Create a Process

Figure out what makes a budget useful to you. If you don’t see any benefit from budgeting, it’s a waste of time. Create a process that fits your travel style and is simple enough that you can stick to it on the road. Keep in mind that most of the benefits to having a travel budget aren’t obvious until you’re on your way. If this is all new to you, know that you’ll get out of it what you put into it.

Our process goes something like this:

  1. List start up costs.
  2. Estimate weekly expenses per destination.
  3. Add other expensive travel-related stuff.
  4. List monthly bills.
  5. Calculate a total for the trip -- add up 1 through 4.
  6. List estimated savings and income.
  7. Compare #4 and #5 to make sure we’re in the black, if not, revise the plan.
  8. On the road withdraw spending money (cash) as per #2.
  9. Revisit and revise the budget every couple of weeks.

Several realizations lead us to this process:

  • We need to know what our trip will cost so we know if we can afford it.
  • Prior planning is the best way to get the most out of our money.
  • We’d rather spend more time preparing and less time worrying about money on the road.
  • We don’t want to think about how much cash we need all the time.
  • When we know the big picture we make smarter daily decisions.

If you do a good job estimating your costs you hardly have to do any work on the road. Easier said than done, but in our experience still better than improvising. Let your budget do the thinking so you can focus on more interesting things.

Keep it Organized

Keeping you budget organized will make it easier for you to see the benefits of your efforts. We like to divide our budget into these categories:


  • Start up costs: Gear, visas, immunizations, initial transportation.
  • Daily expenses: Food, lodging and location transportation.
  • Big travel expenses: Tours, attraction fees, flights, rail passes.
  • Monthly Bills: Insurance, phone, bills from home like storage or car insurance.


  • Savings: money in the bank.
  • Expected savings: money we hope will be in the bank.
  • Expected income: money we’ll earn on the road.

Dividing your budget in this manner will keep your documentation more organized and easier to update. For example, before your trip you will focus on start up costs and estimating big expenses. On the road you’ll rarely need to refer back to those sections. There’s no sense in cluttering up your budget with information you don’t need.

Digital vs. Paper

Recording your budget in digital or paper format is a personal choice. In our experience both can work equally well. For longer trips we prefer a combination of both methods. The choice is about what is most convenient for you. Below is a list of pros and cons that may help you decide:

  Digital Paper
  • Easier to make backup copies
  • Much quicker to do math
  • Goes well with online banking
  • Convenient on the road
  • Faster to add new records
  • Receipts make it simple
  • Requires a laptop
  • Software experience needed
  • Power & Internet limitations
  • Easy to lose or spill coffee on
  • Time consuming to analyze
  • Papers grow in size over time

Our personal choice depends on the type of travel we’re doing. If it’s a short trip we’ll use paper and convert that to a digital format after returning home. On long trips we use a combination of both paper and digital records.

Combining methods is the most flexible approach. We do our initial budgeting at home with spreadsheet software. This allows us to tweak numbers and immediately see how  it affects the bottom line. On the road we’d rather use paper to keep track of important numbers as a reference. Every other week we refer back to our digital budget to get an idea of how the numbers are adding up. More info on this in our article about using a travel budget on the road.

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