Hopefully you’ve come to grips with the difference between a household budget and a travel budget. Understanding that difference is a key part of making your money last for the whole of your trip.
So far your only experience with budgeting might have been your weekly or monthly household budget. So when it comes time to budget for a 6 month trip or even a whole year away you might not be too sure of exactly where to start.
How do you make sure you allow the right amount for the four main categories you’ll need to include in your budget?
The key is to research, research, research!
You need to loosely work out the countries you want to travel through and then discover what you need to allow for each category.
Generally you can find good reliable figures with a bit of searching online. Sites like budgetyourtrip.com allow you to get travel budgets from real travellers based on whether you think you are a budget, mid-range or luxury traveller. Don’t underestimate how helpful sites like this one are. You need to have a good idea of the different costs before you set out and this site in particular will allow you to get budgets for each country in your own currency. This will make it super easy to add up all the different country expenses.
Prices for a family of four in Vietnam or Laos are a lot different than prices for a family of 4 in Denmark or Sydney. Take the time to work out a loose budget for each country based on how long you think you’ll spend there. This will give you an idea of whether your budget is realistic or not.
Before deciding what style of traveller you are, you need to be very, very honest with yourself.
Just because hostels exist for $4 per night does not mean they are a good idea for everyone! If you are used to luxury hotels, clean fluffy towels each day and sumptuous buffet breakfasts will you really enjoy yourself in 12 bed dorm rooms, with scratchy towels meant to last you a whole week and toast and jam in the morning?
There’s no shame in not being a budget traveller. Don’t kid yourself that you’ll enjoy roughing it if you know you absolutely won’t. Perhaps midrange guesthouses are more your style. Maybe you can do budget travel for a few weeks if you balance if out with a few weeks of comfort afterwards.
If you are travelling with children you might not want to stay in shared dorms with other travellers. If you prefer to have private rooms you need to budget for those from the start. If you have fussy eaters you might need to ensure you have cooking facilities. This can mean spending a little more on your accommodation budget. Or spending a lot less by getting yourself a house-sitting assignment occasionally.
Another item that has different categories of luxury is travel. Can you take a second or third class train and give up some of the luxuries or will you only travel first class between cities? Are you happy to take night buses or would you rather fly between cities? All of these details will be important as you spend time working out your travel budget. And they’ll be even more important when you set off on your trip and have to stick to that budget!
With so many variables it pays to have the best idea you can of what type of traveller you are. This means you’ll need to consider accommodation types, eating arrangements and the transport you’re happy to use before you set off.
Budgets are fluid.
Once your budget is finished you need to remember that it is really a fluid thing. If you discover after the first month that you are way over in one of your categories, you need to take steps to bring it back into line before you spend too much of your capital. Or maybe you’ll be over in one area but under in another. If you’re happy with your budget that way then leave it like that and continue on. There’s no set rule for budgeting, you have to do whatever works best for you and your family.
One important thing to remember after you set out and are wrangling your budget is to not be lulled into a false sense of security.
If you find that you spend a lot less in a particular country than you expected, DO NOT be tempted to live it up and use up that buffer. Somewhere down the track you are bound to go over your budget and will need the extra that you saved to cover this extra spending.
Trust me, I know!
We were about $1000 under budget after our 3 months in South East Asia. We were thrilled because that meant we could buy a new lens, battery and case for our camera. We let the kids have amazing yoghurt almost every day from this cool yoghurt bar that we found and we went way over our food budget for our last week in Vietnam. Things were looking great!
When we hit America we discovered a hire car would be a much larger expense than we had expected and we decided to buy a car to road trip around. That $1000 that we blew in Vietnam could have gone towards our car purchase. At the end of our time in the US we were $4000 over budget and regretted not pocketing our savings for a rainy day!
Luckily we learnt this lesson early on and were able to mostly get back on track in the following months.
As a service to other travellers remember to contribute your own figures to your favourite budget sites when you return home. This will help other travellers set their own realistic travel budgets based on real and current numbers.
Taking the time to get your budget right before you leave home will pay off when you don’t have to spend nights lying awake worrying about money on your trip. The idea of travelling is to enjoy yourselves, see the world and learn plenty. Not to be stressed due to money worries. If you wanted those you could have just stayed home!
The 3rd article will be: Different Styles of budgeting for long term family travel. Stay tunned!