Making a travel budget is useful in many ways. It can help with planning your trip and prioritizing what’s most important to you and your family. Additionally, it can keep you out of debt and provide a framework to make informed decisions on where to spend your money on your vacation. It can also give you a peace of mind knowing you aren’t overspending. In this post, I will explain what parts of travel to budget for and how much to include in a travel budget. Plus some helpful ways you can save money, so you can stick to your travel budget.
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Figure Out What You Can Afford
Average Travel Budget For a Family Vacation
As I was preparing for this blog post, I looked up what an average family would spend on a week-long vacation. What I found was that no one really knows! I saw many different numbers ranging from $4500 to well over $15,000 dollars.
So, what does this tell me?
Travel budgets are personal. We all have different tastes and preferences. The amount of money you will spend on a vacation depends on whether you want luxury stays, if you enjoy roughing it at hostels, or if your zone is somewhere in between.
To make a travel budget that works for you, you will have to think about your own needs and wishes. I personally have a hard time spending over $300 dollars a night on a hotel whereas others will see that number and think that is a cheap price for a hotel.
Our Travel Budget
For us, an average budget for a week-long vacation in Europe would be between $3,000 to $6,000 dollars depending on where we go and what we do. We aren’t budget travelers, but we don’t splurge on many things either. We find ways to save, but we don’t compromise comfort.
Your Turn – What is Your Travel Budget?
Now, it’s your turn. First look at your savings. What do you think you could comfortably save for your trip each month? Is it $1000? $500? $20? Maybe you want to spend $2,500 on your week-long trip. That’s definitely possible. You might not be spending that week in Singapore, but a trip to Mexico could be in your budget!
Now that you know how much you are saving each month, you can figure out how much money you will have for your upcoming vacation. If you prioritize travel and set aside that money right away, it will make paying for a trip that much easier!
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What Are Expenses to Consider in the Travel Budget
Now that you have your total budget, let’s look at what you can afford. These percentages below are rough estimates and based on our own personal experience and some research. Also, another thing to remember is that these numbers can be adjusted. You can move some of the budget around depending on where you go. For example, you could spend more on transportation and less on food and lodging and still have the same amount set aside.
Consider the Costs of a Destination
A lot of your travel budget will depend on the destination. Some locations cost a lot to fly to, but the costs of food or lodging are inexpensive. While for me, living in the Netherlands, I can hop on a flight to London for under 100 Euros per person, but hotels, food and entertainment will be much higher than many other destinations.
An easy way to give a rough estimate of costs in a certain location is by going to budgetyourtrip.com or nomadlist.com.
Budgetyourtrip.com will give you average costs per day for each destination you search. I did a quick search of Cartagena and compared what it said to how much we actually spent there. For us, we spent a little more than average. I did this comparison with a few other places and it was about the same. This is good for me to know, so that when I plan another trip, I can get a pretty close estimate to the amount we will spend.
Nomadlist.com gives you a little extra information that budgetyourtrip.com doesn’t give you. This well-organized website is geared more for digital nomads looking to see the average living expenses of different locations. However, it does go into details that I find interesting for regular travel like the cost of a cup of coffee or average night at a hotel. It also gives safety ratings and other interesting insights.
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The Travel Budget – Broken Down
Your travel budget should include the following items: transportation, lodging, food and drinks, sightseeing and entertainment, gifts and souvenirs and extras. Below I breakdown each category and give you an example using a weekly travel budget of $6000 for a family of 4.
Transportation – 40% of the Travel Budget
Getting from place to place usually is the biggest part of your budget. This includes your flights, rental car, public transportation, taxis, and gas.
Let’s take that budget total of $6000 dollars for a week-long vacation as an example. That gives you roughly $2400 dollars to spend on transportation. A big chunk of that will go to your flights, but don’t spend it all there. You will need some money to get around while you are at the location. I would recommend spending about two thirds to get there and back and one third of the budget for transportation while you are there. That means you are aiming for $1600 for flights and $800 for other transportation like a rental car or public transportation and taxis.
Lodging – 25% of the Travel Budget
Where you stay will also be another big chunk of your budget. This includes any costs for a vacation rental, hotel, hostel or resort costs.
With our budget of $6000 dollars, that puts you at $1500 to spend for the week. That is about $215 dollars a night. Depending on your location, this is completely doable. You will not be staying in the most luxurious hotels with panoramic views, but you will be comfortable and the rooms will be safe and clean.
If you are staying at an all inclusive resort or going on a cruise, the amount you can spend will go up because your food and drinks are included. So in that case, add the next category together with this one to get 40% of the budget. That means for 7 nights, with a travel budget of $6000, you can spend $2400 dollars or about $350 dollars a night on a cruise or all-inclusive resort.
Food and Drinks – 15% of the Travel Budget
The cost of eating on vacation can vary greatly depending on what and where you eat. Don’t forget to add in breakfast, lunch, dinner, snacks and drinks!
Our budget of $6000 gives us roughly $900 to spend on food and drinks. That is about $130 dollars a day. This means you most likely won’t be eating out at nice restaurants for every meal, unless you are in Colombia (food is so cheap there! 🙂). But don’t worry, you won’t starve. Find out ways to minimize the cost of food below under the Saving on Food and Drinks section.
Sightseeing and Entertainment – 10% of the Travel Budget
When you travel you are going to want to have some fun. Not all activities come with a price. There are plenty of free or inexpensive ways to enjoy a new destination like going to the beach, taking a free walking tour or going on a hike. I would recommend prioritizing a few activities that you don’t want to miss that cost money and then filling the rest of your time with free or cheap entertainment.
For all those activities, you have $600 dollars to work with.
Gifts and Souvenirs – 5% of the Travel Budget
Many of us when we travel, like to bring something home with us to remember the trip and a little something for our loved ones that stayed behind. Don’t forget to allocate a small part of your budget for this.
With 5% of the budget going towards gifts and mementos, I would have $300 to spend. Honestly, our family is not one to bring home a lot of souvenirs for ourselves, so we rarely meet this part of the travel budget. That means more seafood for me! 😉
Extras – 5% of the Travel Budget
There are a few items that tend to be left out of a travel budget that should still be considered. You might not have to pay for all of these items each vacation, but remember things such as travel insurance, phone expenses like an e-sim*, passport and visa costs, vaccinations, pre-trip costs**, and leaving some money set aside for incidentals.
With only $300 dollars for this part of the travel budget, it may not seem like much money to pay for all of the items I just listed. However, I would hope that you wouldn’t need to pay for all of these items every time you take a trip.
*For an e-sim, I would recommend getting one from Airlo. Their rates are a lot less expensive than if you were to buy international minutes from Verizon for example.
**Pre-trip costs could be buying any luggage, swimsuits or other essentials for the trip.
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Tips on How to Save Money and Stick to Your Travel Budget
Saving on Transportation
Since transportation costs are the biggest part of your travel budget, saving in this category will help your budget the most. There are so many ways to save, so let’s dive into it.
Use Miles/Credit Card Points
The best way to save on transportation costs, especially flights, is by using credit card points and miles. You can save hundreds by using points. Get credit cards with good sign-on bonuses. Use the credit cards to pay for necessary items you need around the house like groceries and gas. The points will add up naturally.
Use Public Transportation
Second best way to save on transportation is to use public transportation. Buses, trams and trains are significantly less expensive than taking a taxi in most parts of the world. It is usually less expensive than renting a car and paying for gas and parking too.
Walk
My kids hate me for it, but walking is also a great way to save money. Plus an added bonus for me is that you get to see more of a place when you walk around.
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Saving on Lodging
Lodging is also a big part of your budget and there are a few tricks to save some money on this category as well.
Use Credit Card Points
You can also save money on lodging using credit card points. Do you have a hotel chain that you consistently use? Consider getting their card. Hotels give you the best bang for your buck when you are loyal to them. The more you stay, the better the value.
Booking.com Reward Program
Don’t have a hotel brand that sticks out to you? Consider using Booking.com to book all your stays. This is what we do. Booking.com has a Genius reward program where you get discounts depending on your level. I am currently at a Genius level 3 which means I get up to 20% off on stays, 10% off on rental cars, free breakfast on select stays, free room upgrades on select stays and priority support. I like their program because they have a huge selection of hotel and apartment stays to choose from, and I can still get a discount even if I don’t always choose one brand of hotel.
Location
Another way to save on lodging is to consider staying a little out of downtown or the main touristy area. We choose this option sometimes if public transportation is close by or if we have rented a car during our trip.
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Saving on Food and Drinks
The easiest way to save on food and drinks is to not eat out every meal. We like to eat out for at least one sit down meal a day. For the other meals we either pick up a cheap treat like a pastry in the morning or cook our own meals.
Another way to save money is to eat at food trucks or markets where food prices are lower. Even choosing restaurants outside of the more touristy areas of a city will be less expensive.
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