How to Create a Checklist for Budget
Resources updated 10/2015
by Transitions Abroad
Picture yourself in the legendary Ngorongoro
Crater in Tanzania just after dawn, sitting in the whicker
basket of a red and yellow striped balloon. After chuff-chuff-chuffs
from the burner fill the balloon with hot air, you ascend
slowly, sipping chilled champagne as you watch lions, rhinos,
and elephants drift past on the savannah below. Now picture
yourself left behind, standing on the floor of the crater
gazing up with envy, wishing you’d budgeted money
for this adventure.
As college-age backpackers, many of
us traveled on a bare-bones basis and kept going until our
money ran out. That sort of trip required eating on the
margins of nutrition and hygiene, living occasionally in
barely habitable accommodations, and foregoing most treats.
Sound like fun? It was back then, but now time, health,
and love of adventure are more important than a few dollars.
After all, one reason to travel is pleasure. If you make
informed choices, bargain a bit, and skip overpriced tourist
frills, you can easily have a fine trip within a reasonable
budget—one that includes hot air balloon rides.
Most people are about as fond of figuring
budgets as they are of calculating their taxes. But, as
with taxes, you’ll pay a penalty if you don’t
do it right. Let’s find out how it’s done as
we will supply a budget travel checklist at the end of this
Norway isn’t Guatemala
We’ll begin by acknowledging
one of life’s realities: travel costs vary wildly
around the world, and your choice of destinations must
take this into account. Travelers may choose to write
off Japan, most of Europe, and a few other high-cost
destinations until the U.S. government stops running
up huge deficits and the dollar becomes more robust.
A week touring Norway can easily
cost more than a month in Guatemala. Fortunately much
of Latin America is a relative bargain, even inexpensive
(see Numbeo.com for
a crowd-sourced estimate of cost for a given country).
But there are still enormous cost variations between,
for example, a highly-promoted Mexican beach resort,
a Brazilian metropolis, and a Nicaraguan seaside village.
The cost of travel in a given
country also depends in part on the strength of your
currency in relation to that country’s. In the
1960s, when the U.S. dollar had some muscle, Europe on
$5 a day was very possible. Today, when a martini can
cost $25 in some European capitals, imagine what you’d
spend for a serious night on the town.
You think New York City is expensive?
According to CNN Money (with data derived from the Economist's
annual survey), in 2014 it did not even rank in top 10
world’s most expensive cities, and came in at 22nd!
Singapore heads the list followed by Paris, Oslo, Zurich,
Sydney, Caracas, Geneva, Melbourne, Tokyo, Copenhagen.
A nice 3-star double hotel room
is easy to find for $50 in Antigua, Guatemala, but you’d
pay that in Amsterdam or London for two dorm beds in
a hostel. That $10 taxi ride from the airport in Mérida,
Mexico will run more than $100 in Madrid. A haircut that
costs $5 in Colon, Panama costs $65 in Tokyo. A simple
fast food meal that costs only $4 in Mexico City will
zap you for over $20 in Oslo.
The Accountant’s Travel Budget
Which is the chicken; which is
the egg? Do you plan your trip by choosing a destination
first or do you start by drafting a budget? That’s
actually a trick question. Obviously, the destination
matters most, so if money didn’t matter that’s
what you’d focus on first. But if money does matter,
you’ll have to bother with a budget. One way to
draft your budget, perhaps the one a responsible accountant
might calculate, is to choose the maximum amount you’re
comfortable spending on a trip. Then bump that up a bit
because of all the money you won’t be spending
at home for food, entertainment, utilities, and so on.
Let’s suppose you choose
to spend $2,500 and your roundtrip transportation will
cost $900. That leaves you $1,600 to spend “on
the ground.” Use the checklist (see box out below)
to estimate local daily costs and divide that into $1,600.
If that allows you 14 days, great. But what if it permits
only eight days and that’s just not enough time
to see everything you want to see. Does that mean you’re
condemned to yet another trip to Florida?
The Romantic’s Travel Budget
Not at all—because there’s
another way to approach a budget, one a romantic would prefer.
Choose your favorite destination and figure out how many
days it will take to experience everything on your “must-see” list.
Next, use the checklist to calculate how much that number
of days will cost. Now persuade yourself to spend that amount.
If you absolutely can’t make the case, or the cupboard
is too bare for the grandest scheme, cut back on the level
of accommodations and class of tickets, and figure out which
areas or attractions you can cut—until you have a
cost you can live with. The romantic will find a way to
afford what she or he really wants.
Constructing a Travel Budget
List all the things you expect
to spend money on, then plug in the length of the trip
and local cost estimates. Let’s practice by assuming
certain expenses for a hypothetical 30-day trip in Central
1. Pre-departure expenses. These
include the cost of visas, photographic equipment, medical
protection (e.g., shots, prescription, and over-the-counter
medicines), guidebooks and travel apps, new clothing,
and other gear. Let’s estimate pre-departure expenses
for this trip at $450. We will assume you have a laptop
if you want to bring one along.
2. Airfare. Assume
a cost for airfare (getting there, traveling around,
and returning home) of $900.
3. Other transportation. This
includes local buses, taxis, and other non-air transport.
Your working itinerary shows how often you’ll need
local transport and guidebooks give you a reasonable
idea of the costs. Estimate $100.
4. Lodging and meal
expenses. The best cost estimates come from
the Internet, current guidebooks, and from people
who’ve recently returned from your destinations.
Of course, before you’re actually there, it’s
hard to know exactly how much you have to spend for
meals and lodging that will make you happy. Nevertheless,
here’s the process for estimating these costs
for a 30-day trip in Central America.
- Subtract the number of days
when you’ll pay no separate charge for lodging,
such as when you’ll be trekking or on an overnight
plane or train. Let’s say there are five of
those days, leaving 25 days. An average cost of $40
per day (easy to do in Central America) times 25 gives
you $1,000. Adjust that upward by 15 percent to cover
price escalation and an occasional splurge and budget
$1,150 for lodging.
- An average cost of $20 per
day for meals times 30 gives you $600. Adjust that
upward 15 percent and budget $690. Remember that you’d
spend at least that much in 30 days at home.
5. Special experiences. If
you don’t plan for them, paying for special experiences
can wreck your budget. I’m referring to things
like the cost of scuba diving, sailing, trekking, rafting
and so on. Most of these opportunities will surface during
your research but you won’t recognize some as “musts” until
you get to your destination.
How much do these special experiences
cost? Check the Internet and guidebooks, call national
tourism offices, ask a knowledgeable travel agent or
someone who has been there recently. If you can’t
turn up anything, take a guess.
I suggest three rules of thumb:
- Special experiences in developed
countries cost more than you might expect and in developing
countries even less than you might expect
- If modern technology is involved,
such as a helicopter, they’ll be fairly expensive
- Prices quoted by a travel
agent for special experiences will almost certainly
be higher than you’ll pay if you make your own
For our hypothetical trip, assume
four days of scuba diving and several day trips with
guides. Estimate $550.
6. Miscellaneous. This
category includes odds and ends: clothing you buy on
the road, souvenirs, toiletries, beverages, books, postcards,
postage, tips, and so on. Your estimate here is a matter
of personal preference and available money. Whatever
you estimate, add 25 percent. For this hypothetical trip,
If you want to fine tune your
budget, find out whether your own currency has grown
significantly stronger or weaker since the information
you’re relying on was published. Stockbrokers have
this information. Check the web for current
exchange rates. In recent years the weakness of the
dollar has made Mexico and Central America very attractive
when contrasted with Europe. (In 2015 the
dollar rebounded against the euro
to make travel a bit more affordable for North Americans in many but not all European destinations.)
To be even more conservative,
add up all the categories and add an additional 15 percent
to the total to cover surprises and spontaneous splurges.
If the grand total is more money
than you have, don’t skip a beat. The purpose of
your estimated budget is to simulate reality ahead of
time and to put you on notice that you have to cut some
expenses or redesign the trip.
In summary, avoid an absolutely
bare bones budget if you can. Leave room for decent food
and shelter, small pleasures, and special experiences.
Before you cut back on your trip, consider investing
just a bit more in your lifelong memories.
Checklist for Building
Your Travel Budget
visas, and photos
other photo equipment
money belt, etc.)
buses, car rentals, gas, etc.)
charges (SIM card, temp phone, etc.)
|Meals and Lodging
activities such as museum tickets, concerts, tours, siteseeing
|$___________entertainment / nightlife
activities such as scuba diving, rafting,
gifts, tips, laundry
exchange, bank fees
|Your Own Additional Miscellaneous
|Total Trip Budget
|$___________add 15% for unexpected