Everyone plans to stick to a budget when planning out their trip.
Videos by TravelAwaits
In my experience, sticking to that budget during the booking phase is easy. I might even end up a little more in the green that originally planned.
Then comes the tough part: Creating a realistic budget for the day-to-day of the trip. While it’s easy to compare flights and room rates before committing, it’s tougher to keep track of all those dollars when the rubber hits the road, so to speak.
A little souvenir, a tour add-on, a fine dining splurge—spending can quickly spiral when we’re on vacation. And that’s not counting any unpleasant surprises and expenses, like missed trains.
In short, having a functional travel budget formula is more useful than you might think. If you’ve found yourself overspending on recent vacations, here’s how you can use it to stick to your spending goals.
Financial tools manager shares his travel budget formula
Christopher Harris is the financial tools manager at Calculating.com, which is an ‘intuitive calculating platform’. That means they create calculators that make it easy to analyze your life, from percentage calculators that help you forecast tips to steps-to-calories calculators.
When it comes to travel, Harris uses this formula to figure out how much to spend each day:
Total savings available for the trip (your budget) ÷ number of travel days = daily spending limit
That probably seems a little basic—and Harris admits that it is.
He says, “…That simplicity is exactly what makes it work. People often think about their travel budget as one big pot of money. The moment you break it down into a daily figure, your spending becomes something you can actually manage in real time.”
In other words, breaking down your overall budget into daily limits gives you a clearer spending limit for the day—not the entire trip. That’s less mental math for you to do.
Harris also says that this formula can prevent you from overspending early on the trip. It can also help you forecast big-spend days versus cheaper days. For example, if you know that you’ll spend more than your daily limit on one day, you can easily adjust your daily spending limit for the day before or after.
How to use the travel budget formula for your next trip
When should you use this travel budget formula? And how?
Personally, I think it’s worth using when you’re going on a high-spend trip and/or a long vacation. When you know you’re spending more than usual, it’s important to stay on top of your budget. The same is true when you need to account for budgeting for two weeks or more. It’s easy to lose track of the smaller expenses.
Here’s how Harris recommends using his travel budget formula (total savings available for the trip (your budget) ÷ number of travel days = daily spending limit):
- List out all fixed costs (flights, hotel, other pre-booked activities)
- Subtract the fixed cost total from your budget—that shows your true budget for the rest of the trip
- Divide that new total by the number of days your trip will last—now you have your true daily budget
- Add 10% to your total budget to keep with you just in case—this isn’t for splurging, it’s for emergencies
