How to budget for a vacation? How do you create a travel budget for a trip to Europe? Most people avoid the question and just start spending money when they travel. However, I think it’s really important to understand the limits of your travel budget so you can create an efficient travel itinerary so that you can feel confident when you travel and enjoy every minute without worrying about your bank account.
Unless you are super rich, you have a limited travel budget for every trip you take. But how do you create a realistic travel budget? How do you put together a travel budget plan that makes sense to you and your family? It is one thing to know general costs for traveling to Italy or England, but it’s a whole different thing for you: how do you budget for your vacation? In this article we’ll explore 5 simple steps for creating your own realistic travel budget.
We’ll be working together to create a travel budget plan. As a plan, our travel budget will change and adapt as you add more details to your travel itinerary.
Remember that your travel budget goes hand in hand with your travel itinerary.
1. Create a Rough Itinerary
Making your own travel budget starts with creating a rough travel itinerary. Your travel itinerary and travel budget are completely connected. However, when you start, you don’t need a perfect itinerary which has all the details but an itinerary with some dates when you can travel and some places you want to visit.
A realistic travel budget includes two parts: the money part and the time part. While everyone thinks about the financial part of a travel budget, how much time you have available for travel is equally important.
Both, money and time are part of a realistic travel budget.
So, when starting to think about travel, think of a rough itinerary and a rough budget which includes both money and time.
Something simple like this would do for a start:
“I want to visit Venice Italy area for one week in May with day trips to Verona and Padua. In addition I want the trip to be no more than $5000”.
2. Make a Travel Budget for Transportation
If you’re flying, enter your dates in a travel app like Hopper or Google Flights and look at the flight connections available and the prices. Hopper will also give you changes in prices around your dates. Since at this time everything is tentative, see how you can save some money by changing your dates.
However, at this point focus on getting rough transportation cost. Make sure you include your car rental cost, gas, Uber and other transportation related expenses.
The main goal is to have a rough budget, so don’t focus on every small detail, but rather get the big pieces and assign a cost to them. For example, your transportation budget might look like this:
- Plane tickets: $1200 per ticket
- Rental Car for 3 days: $100
- Train/Bus tickets: $50 per person
- Water bus: $50 per person
My rough transportation budget comes to about $1400 per person for one week in Italy.
3. Make a Travel Budget for Accommodations
When you try to figure out a travel budget for your lodging, use a hotel aggregation site that gives you the cost quickly. I like using Booking.com for making all my hotel reservations. This site is great in helping me figure out my rough lodging cost per night.
For example if I travel to Northern Italy, I take a look at places like Verona, Milan and Venice to get an idea. I figure about $200 per night should be sufficient, including all the taxes and fees and with breakfast included. Then I multiply by the number of nights I plan to stay.
For example, my 1 week trip to Venice area, which is 6 night, would cost me around $1200…roughly.
4. Make a Travel Budget for Food
To get information about food prices you can easily do some searches on the internet. Again, look for a rough estimate of the food cost.
Going along with the Northern Italy example, for me $40 per day is sufficient.
Continuing with my travel budget example for Venice Italy, food would cost me around $250 roughly per person.
5. Make a Travel Budget for Activities
When it comes to figuring your activities budget, this can vary quite a bit depending on what kind of activities you like. If we’re continuing with my example for Venice area, I would include admission tickets to museums and churches in Venice, Verona and Padua. These tickets roughly cost $60 per person.
Bring it All Together
Putting my travel budget together is simple now. If I add up my travel budget for transportation, accommodations, food and activities for visiting Venice for one week, I come up with roughly $2900 or to have a round figure: $3000.
Now, you can easily see where you can reduce this rough number. If hotels that are in the $150/night range seem fine to you, then you can save $300. If you vary your travel dates and find cheaper plane tickets you can save about $200. So, you can probably do this trip for $2500. However, if you travel with friends and family and can split the hotel cost, then your travel budget becomes even more reasonable.
At this time you can also start exploring different options like: what if I stay two more days? Can I afford one more week? At this point you can start planning your vacation on a budget, which is your budget.
Maximize Your Travel Budget
Let’s talk about making the most of your travel budget. These are my favorite ways to squeeze the most money and time from my vacation budget. I have used these for over 20 years and they always work.
- Get a good travel credit card. My favorite travel credit card has a $750 travel money sign up bonus in addition to saving you about 5% on every travel purchase (no foreign transaction fees + 2% travel credits).
- Fly on the off season. If you don’t have school age children, flying in the off-season will save you between $200 and $600 per ticket for a flight from USA to Europe.
- Use Booking.com to book your hotels. With a very large selection, Booking.com really gives you the best deals on hotels.
- Try leaving on a Thursday instead of Monday so you can add an extra weekend to your time off. For example, if you want to go for a week, see if you can work an extra Saturday or some other extra time so you can leave on Thursday and thus add 3 more days to your trip. It makes a big difference.
- See if you can incorporate a national holiday that is off anyway. Yes, it’s true that there might be more tourists traveling then, but US holidays like Thanksgiving can be perfect for easily adding more time to your travel budget.
Should You Create a Travel Budget Before Your Trip?
Of course you should! Having a rough travel itinerary together with a rough travel budget (which includes both money and time) will give you an easy way to explore your options and see how you can maximize your travel time while you try to fit your trip within a realistic budget. Remember that the point is not precision to the dollar and cents but rather a rough budget that gives you a good ideas if your travel itinerary is achievable.
