After the isolation of the past two years, global tourism is expected to rebound by around 60% in the coming year. The world is slowly getting back to normal, and that means planning trips and vacations. But do you know, or can you even remember, how to budget for them?
Your travel budget and planning can make or break your holiday. Read on as we help you work out the perfect travel budget.
Consider the Location
The first step to take is to know where you are going. The world is a wide and varied place, with price differing hugely in various areas. For example, visiting countries like Switzerland, where taxation and prices are high, will have a huge budget difference to countries in southeast Asia where accommodation and food can be extremely cheap.
You need to do some research into prices at your destination before. There are many places you may assume will be cheap, but actually come out very expensive. Many countries in South America can often end up like this, as many of their goods are imported.
There are a number of price comparison sites online that let you view the cost of living in different countries. They will give you average values for eating in low, mid, and expensive restaurants. You can also look at accommodation costs on the major booking websites.
Think About Your Level of Luxury
Another consideration is the level of comfort or luxury you wish to undertake when travelling abroad on a budget. Accommodation can take many forms, from cheap backpacker hostels to five-star hotels. Generally, the more you pay, the better the accommodation should be.
This also works in other areas of your trip. Will you want to eat at Michelin star eateries, or dine on cheap and easy supermarkets and street food? Will you travel on first-class flights, or ride economy class on the train?
You can of course mix and match these, but it helps to know when you will be spending big and when you will be cutting back. This is particularly useful if you plan to travel the world on a budget.
Tips for Backpackers
When you travel the world on a budget, it is inevitable a time will come where you need some comfort and rest. No matter how enthusiastic you may be to meet others in hostels and camp wild when you start, it wont last. You will get fatigued, you will want privacy, homesickness will set in and you may even fall ill at some point.
For these occasions, it helps to plan a contingency fund. This is for staying in a good hotel for a few nights, or eating at a decent food joint. If you get to the end of the trip and you have not used this money, then you can always treat yourself before heading home.
Planning Your Budget
Planning your budget is much easier than you think. For many people, a lot of the costs will be paid in advance, making it even easier to create.
Big Ticket Items
Big-ticket items are your largest expenditures, which are usually your flight ticket. If you are booking a package deal, this will usually include the hotel and flight in one large sum making traveling abroad on a budget easier to manage.
When booking individual flights, you can save money by being flexible on dates and times. Many flights vary by the time of day, week, and even year they fly. You may even save money by pushing flight times back or moving them forward a day or two.
Also bear in mind that flight prices change depending on how many people book the flight. If the number of seats sold is low, then prices will drop to fill the flight up. When it is getting full, then prices will go up.
You can often breakdown costs by going indirect and doing a stopover. For example, instead of flying straight from the UK to Australia, you may be able to spend a few days in Singapore or Kuala Lumpur, then get a cheaper flight to finish the journey.
Make sure you also do your research into how you will get to and from the airport. Some European budget airports can be a long way out of the city, and the cost of transport can be as much as the flight itself. Others may have direct shuttles and train lines to get you where you need to be.
After travel, accommodation will be your next big expense. You need to decide if you will be staying in one place, or moving around on the trip. Also factor in the level of luxury spoken about previously.
Luckily, it is easier than ever to book accommodation. Go to one of the major booking sites, put in your dates and select a hotel. You can search by accommodation types, price and even the level of service.
Paying in advance means you don’t have to worry about the costs while on the trip. Some places may even include the cost of breakfast, or even be half or full board. If they are, you can eliminate these factors from the rest of your expenses.
Even before you begin, you will find a range of costs is required for your trip. The first of these is travel insurance. Do not go away without it.
It may be tempting to dismiss it, and put it down as an unnecessary expense. Hopefully, it will be, and you will never need it. If you do have an accident or emergency, travel insurance can get you out of a lot of sticky situations.
Prices for travel insurance can vary depending on the level of coverage and where you are travelling to. Many high-risk activities will not be covered, so if you plan to do these you need to check with your provider beforehand.
Another precaution is to get your vaccinations. Your foreign office will have a list of requirements for each country. You may need them in advance so you can get a vaccine passport to enter.
Certain countries may also require a VISA for entry. Some places allow you to get them on arrival, and others have strict requirements that may require you to apply in advance.
Must-Do and See Activities
If you have chosen to visit a certain place or country, there will be be a reason you are visiting. This may involve visiting landmarks or tourist attractions you have to go to. Very few of them will be free.
They may vary in price. For example, three days in Disneyland will be a much higher budget requirement than visiting a beach for a day. Do your research beforehand, and factor in the cost of any guides, transport and expenditure while at the sight.
Transport When You Get There
Once you are at the destination, you will have a number of options for transportation. If you are staying at one place, such as a resort, this may not matter so much. However, for roaming trips and city breaks these prices need to be considered.
Firstly, decide if you will use public transport or hire a car. Cars can be rented fairly cheaply, but you also need to factor in costs for parking and fuel.
If you use public transport, then research the price of tickets to the destination. Very often, you can get combined travel cards for tourists. They will give you access to the networks and discounts or entry to attractions, meaning you can save even more.
Creating the Travel Budget
You should now have all your expense laid out in front of you, from accommodation costs to how much you will need to get by each day. You can begin to collate them into a budget.
Split all the costs into two camps. These will be advanced costs and trip costs. Create a pre-budget for anything you will pay in advance, such as accommodation, flight tickets, and any costs included related to additional fees.
From here, you can add up the costs for the rest of the trip and divide them by the number of days you will be away. Add a contingency of 10% to each day so you are never left short.
How Will You Finance It?
Now you know the budget you have, you have to think about how you will finance the trip. You can either use your own money or apply for a travel loan.
If you decide to go it alone, then start saving as early as possible. You will know how much you need each day, so work out the length you have to the trip and how much you need to put aside each payday. Make sure this in a secure place where you can not be tempted to spend it.
For a loan, there are surprisingly more providers than you may think. This holiday loan by Plenti is a great way to begin your search for lenders.
Expecting the Unexpected
Now you know how to create a travel budget, always remember to expect the unexpected. Emergencies and accidents may happen, so ensure you have an emergency line of credit such as a card or extra savings. This way you will get peace of mind when on your trip.
Are you still considering where to go on your big trip? We have lots of articles on world and local travel. Visit our blog and let us help plan your next adventure!