Set Your Travel Budget

A realistic and workable travel budget makes your dream vacation attainable.

If you followed the instructions outlined earlier, you already have good cost estimates for:

1) sightseeing and entertainment

2) transportation

3) lodging

4) passports and visas

5) service charges

6) travel medicine clinic consultation fees, vaccinations and pills

7) travel guide books

Some costs were more difficult to estimate however. These include:

1) food

2) alcohol

3) souvenirs

You may also need to consider the following items in your travel budget:

1) new clothing

2) luggage

3) travel insurance

4) a house sitter

5) any other expense related to your vacation.


If you are in doubt about whether or not to include an item in your travel budget, include it. By failing to include the item, you underestimate the cost of 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.

What if your cost estimates are incorrect?

Don’t worry, they will be incorrect; but remember that you are only estimating your travel budget.

Determine the Overall Cost of Your Vacation

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).

Take the total from Step 4 and multiply it by 1.20 for a 20% increase) or 1.25 (for a 25% increase). This is the revised budget estimate and this is the amount of money that you require for your vacation.

Congratulations! You have accomplished something that few people take the time to do – develop a workable budget for your vacation.

Your goal is to acquire (legally, of course) the amount of money required for your vacation.

Determine Your Daily Expense Allowance

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 during your vacation.

Review Your Travel 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 iterary and travel route.


Once you finalize your travel budget, your travel itinerary and rough map are also finalized.

Chapter 13 of Turn Your Dream Vacation Into Reality: A Game Plan for Seeing the World the Way You Want to See It addresses budgeting in greater detail.

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