How to Set a Realistic Travel Budget – apply the simple steps below to calculate the overall cost of the dream trip and then the daily expenses.A realistic travel budget makes your dream trip attainable. It is the natural culmination of all your budget travel research. It is the price tag for the whole trip. When you set your budget, you also set the manner in which you will live as you travel. You should be prepared to make some decisions and stick to them with discipline. At this stage of your travel planning you should already have good cost estimates for:
• transportation • lodging • passports and visas • service charges • travel medicine clinic consultation fees, vaccinations and pills • travel guide books
• alcohol • souvenirs
• luggage • travel insurance • a house sitter • any other expense related to your vacation.
The worst thing that will happen if you over-estimate the cost of your vacation by including an item is that you will have money left over at the end – and that’s not a bad thing.
Don’t worry, they will be incorrect; but remember that you are only estimating your travel budget.
1) Enter all of your cost estimates into a spread sheet for ease of calculation. 2) Organize your expenses into two groups: a) Those expenses that are spread out over the whole vacation (food, lodging, sightseeing etc.). b) one-time expenses (airfare, passport, visa, travel health, service charges etc.). 3) Determine the sum total of each group above. 4) Combine the two sums from Step 3. 5) Reduce the uncertainty of your cost estimates by applying a safety factor to the total from Step 4. Deliberately overestimate the cost of your vacation by a percentage that you set for yourself (i.e. 20-25%, or any other percentage you wish).
Your goal is to acquire (legally, of course) the amount of money required for your vacation.
1) Use the group of expenses that are spread over the whole vacation - see Step 2a above. 2) Multiply each individual expense within this group by the same safety factor that you applied earlier. These are the revised estimates. 3) Divide each of these revised estimates by the length of your vacation in days. This is your daily expense allowance for each item. Your task is to live within each of these restrictions when you travel on a budget.
If the budget that you set is still too large, cut back on your expenses. Focus on the daily expenses. 1) Start with the sightseeing and entertainment expenses. Scale back before making any outright deletions. Go to your travel itinerary and review your activities. Begin with the activities of least importance to you. Don't be too much of a “slasher” because it was these sights and activities that made your destination a dream vacation in the first place. Transportation costs may drop in tandem as destinations are deleted. Furthermore you could consider alternate modes of transportation if available. 2) Review your other daily expenses and make cuts as necessary. Begin with souvenirs and alcohol then move on to the food and lodging. Keep in mind however that you require food and a place to stay. Focus on cheaper meals and cheaper lodging. 3) Remember to update your travel itinerary and travel route.
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