How to budget for a big trip

For some people budgeting is a way to get excited about a trip. They use it as the first step in the planning and a way to get themselves psyched up about a destination. Some people are, of course, certifiably insane.

For most of us, though, budgeting for a trip is like going to the dentist after bingeing on sugar for a few months. But budgeting is better than running out of money halfway through a trip and having to make an embarrassed call home to friends or parents. Here we answer some of the big questions around how to successfully save money and budget for a big trip.

Tandem free fall sky diving at 15,000 feet above Lake TaupoA good budget includes a little extra for trying those iconic travel experiences, like skydiving in New Zealand © Mohd Fuad Rahim / Shutterstock

How much will I need?

Start your budget with the biggest expenses first – usually this will be your flights, but accommodation also adds up. In the Lonely Planet guidebooks, free Guides app and destination pages of lonelyplanet.com(eg lonelyplanet.com/china) there is often specific information on a country’s average costs under the ‘practical information’ section, which can be an invaluable reference point when estimating expenses – you don’t want to show up in Singapore having budgeted for a week in Malaysia; you’ll starve.

With a rough idea of how long you’ll be away, you can work out a daily cost based on room rates and meal costs. Add in a little more for activities, museum entry fees, a couple of garish souvenir T-shirts you’ll probably never wear when you’re home and last-minute taxi fares to the airport when you’ve slept through your alarm.

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Allow for an occasional splurge. Add a little fat for a cocktail or two at Mumbai’s Taj Mahal Palace or skydiving in New Zealand. The worst budget is a chain at your leg pulling you away from the best (if slightly more expensive) travel experiences. Sure, it can be cheaper to self-cater your way around Europe, but if you’re missing out on tasting pizza in its birthplace or discovering the delights of vegan weed burgers in Amsterdam then you won’t enjoy the trip.

A hiker in full gear stands with a flock of sheep on a mountain with a view of the Matterhorn in the Swiss AlpsKitting yourself out in the correct gear is an important pre-travel purchase © Olga Danylenko / Shutterstock

What should I buy before I leave?

Add in pre-trip costs including visas, reliable travel insurance and immunisations. Some travellers skimp on travel insurance, but if you can’t afford travel insurance, you can’t afford to travel. Even if nothing goes wrong, it pays for itself in peace of mind and when something does go wrong (lost luggage or cancelled flights) you’ll find it invaluable.

Gear is another sizable pre-departure purchase. Travellers, especially first-timers, often overinvest in specialised travel gear, but prioritising is the key to saving money while still making a success of life on the road. A strong, comfortable backpack is the traveller’s linchpin, and it’s worth shelling out for a good-quality model (a good bag should last a few tours). An equally important investment is a pair of decent shoes – chances are you’ll be spending a lot of time on your feet, so making sure your footwear is comfortable, durable and is suited to your needs is essential.

Other gear to think about includes clothing, which should be suited to your environment, power adapters, and a good ol’ Swiss Army knife, but travelling as light as possible is always a good mantra.

Hot chocolate on a cafe table in Spain Saving money for all those tasty travel treats can be a real challenge © Neil Setchfield / Lonely Planet

How do I save money for a trip?

Once you’ve worked out how much you need, you’ve then got a figure you can save towards. Some people make this number their screensaver or put it on their fridge, using this saving goal as motivation to go to work everyday.

Have your very own telethon-style countdown as you save towards the goal. If you find saving tough, try budgeting software like Pear Budgetor Mint – the latter includes countdown functions for your savings and can suggest ways to cut your expenses. If you don’t hit your saving goal, then it might be time to go back and re-visit the budget – those fancy cocktails might have to be traded in for a bottle of soju and microwave ramen in a Korean convenience store, which, let’s be honest, is probably just as good!

With this in mind, being realistic is also an important part of the money-saving process. Can you truly afford that swim-up luxury apartment in the Maldives, or would you be equally content in a rustic beachfront bungalow in the Philippines for a fraction of the cost? If you’re struggling to reach your finance goals, being flexible with your trip itinerary can help get you on that flight a lot faster.

Money at the Zeniarai Benten Shrine in Japan; it is said money that is washed in the water here will doubleOnce you’ve saved up enough, don’t throw your money away © kenstockphoto / Shutterstock

How can I keep cash safe when I’m travelling?

Before you go, someone is bound to force one of those ugly, flesh-toned money pouches on you because it ‘saved their life’ back when they did their gap year. Not that there’s anything wrong with money belts or pouches, but you could probably do just as well by having your valuables in an inside pocket of a zipped-up jacket (or, for those who really like to keep their belongings close to their chest, a secret pocket of a scarf).

Carrying your money in a few forms and in a few different places is always good idea. Diversify your money so you hold a little cash, a credit card and an ATM card. Although there are good ATM locators for Visa, Mastercard and other major credit card providers, you’ll find that they can break down, run out of cash or otherwise fail just when you need to pay that slightly creepy taxi driver. Sometimes cash is still king. It’s a good idea to carry a ‘whip out’ – a small amount of loose cash to pay for things as you’re walking along. That way your wallet is conveniently stashed and potential pickpockets don’t know where to hit you.

Of course following the basics will also go a long way – don’t walk through dodgy neighbourhoods at night, don’t carry around massive wads of cash, and use hostel lockers and hotel safes where possible. It’s astonishing how many penny-pinching backpackers leave wallets and purses splayed across communal dormitory beds before heading off for a long shower; that’s one potential way to blow those hard-earned savings in record timing.

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