Planning the financial aspects of your trip and figuring out how much money you are going to need is an important part of any backpacking experience. By crunching some numbers, you will have a better idea about how much money you need to save up to make your trip possible. A financial plan is essential to the success of your trip.
Your travel budget should be considered long before you leave. Knowing approximately how much money you will need gives you an idea about how much you will need to save. You must set a goal well in advance so that it can be reached by the time of your departure. Planning ahead for your budget isn’t very difficult. Consider the following expenses:
- Airline ticket
- Visas and other documents
- Transportation in and around the country (countries)
- Sight-seeing and museums
- Incidental expenses
Planning your budget
To figure out how much money you will need, you must first consider where it is you are traveling to. Much of the world is quite inexpensive, but there are places that will drain your wallet faster than others. London, anywhere in Scandinavia, and Japan are some of the most expensive places to travel in. On the flip side, you can live and travel in parts of the Philippines for a couple of dollars a day.
Next, break down your expenses into initial costs and daily costs. Initial costs include your airline ticket, your backpack, passport, guidebook, hostel card and all other equipment purchased before you leave. Already have some of this stuff? Can you borrow any of it from friends? If so, you’re saving money already. If you are headed for Europe, a Eurail pass would also be a wise initial expense.
The next thing to consider is how many days you will be away. Obviously, the longer your trip, the more money you will need. Now you can figure out roughly how much you will spend on the following each day: accommodations, food, transportation and sight-seeing. A typical travel budget for one day in Europe might look something like this:
You can now multiply your total daily budget by the number of days you will be away. For example, if you were to be gone for one month (30 days), your total cost would be around $1200, just for daily expenses. Then add on your initial costs to get your total travel budget:
Daily budget x Number of days + Initial costs = Total budget
Remember that these prices are only an example and that your daily budget will be an average. Obviously you won’t be paying for museums everyday, but $5/day is a good average. Prices are so variable everywhere you go that a daily budget could be half this (or double). Check your travel guide to get a good idea how much your accommodations might cost. They usually list visa prices as well. And don’t forget to allow for any extra expenses.
If your calculated total travel budget is much higher than you think you can manage to save up, you shouldn’t let that stop you from going abroad. There are plenty of options to travel on the really cheap, and you can always consider finding work abroad.
Travel Budget Variables
Except for sight-seeing and museums, many expenses are unavoidable. The difference is how much you spend on each.
- Airline ticket prices vary so much from day to day that you have to be constantly watching for deals and bargains as they come up. Your airline ticket purchase allows for the greatest opportunity to save money if done properly.
- Transportation costs will depend on where you’re going. How you get around can either save you money (hitch-hiking) or cost you plenty. If Europe is your destination, consider buying some sort of Eurail pass (which can be expensive initially, yet will save you money in the long run). Taking taxis in cities on a regular basis will lighten your wallet very quickly.
- Your choice of accommodations leaves room for financial flexibility. Hostels are obviously your best bet and are actually quite affordable. But there are even cheaper ways to sleep than hostels.
- Deciding on where you eat and what you eat will change your food budget considerably. Buying your food at supermarkets and making it yourself will be cheaper than eating at tourist-type restaurants all the time. Alcohol can be another expensive food purchase, if you can call it ‘food’.
- Your official documents shouldn’t set you back by too much. Your passport should be ordered and paid for well in advance of your departure. Money for visas and exit/entry fees will vary depending on how many countries you are going in and out of. Europe is relatively free of these costs while Africa is riddled with extra charges to come and go.
- Sight-seeing and museums and their value while traveling is subject to personal opinion. Our view on the value of sight-seeing is that if you are going half way around the world to travel, visit, see the sights and learn about the culture and history of a place, do it right. Saving a few dollars while away will only make you regret it later as you say to yourself, “I should have paid a little more to go into the pyramids!” Student travelers could apply for an ISIC student card to help cut costs.
- The gap year budget
A backpacker’s breakdown of his travel budget for a round the world trip.
Useful articles on money: saving up, calculating your budget, and how to spend it.
- Discussion and more information in the Budget Travel Forum!