Keeping The Budget In Budget Travel
It's easy to forget about the budget when you are traveling or on vacation. After a day of relaxing, extra expenses don't seem like such a big deal. In a new place there is so much to see and do, how could you justify missing something based on its cost? New acquaintances invite you to dinner, and an exciting new nightlife begs to be explored. Before you know it your carefully collected trip fund has vanished with days left before your flight home.
Neglecting to monitor spending when traveling does not only lead to a trip going over budget. After months saving, hoarding sick days, and even making some sacrifices, many people are reluctant to spend their hard earned money on anything, even if it is reasonable. By focusing on saving money without realizing what they are actually spending, these people run the risk of missing out on things they could have easily afforded.
As an incorrigible member of the second group I have come to learn that tracking spending and expenses while traveling is vital for keeping perspective of a trip's cost. To make this easier on myself, I have broken the process down in to four steps (really three) that do not interfere with the day to day enjoyment of my travels.
The Pre-trip Budget
Developing the pre-trip budget requires some decisions and research, but ultimately ends with a total estimated cost for the trip. This total is dependent on how you like to travel and the place you will be visiting.
I do not stop my budget planning once I have arrived at the total estimate. Instead, I take that number and create a spending plan using the "zero-based budget" technique. I treat my target savings amount as my "income" for the trip and then whittle it down to zero by estimating all possible expenses. Pinpointing certain things that you are willing to spend extra money on is very important at this stage.
If you bring a copy of this budget along, either as a paper printout or a file stored online, you will be able to reference it frequently as your trip progresses. Hopefully, this will put spending in perspective andprevent you from going crazy re-evaluating your expenditures every moment of the trip.
Now, I am no fan of rigid travel plans be they in the form of itineraries or budgets. This is why I like to add some flexibility by allotting myself a certain amount of money per day. In the morning, I take the daily total from my pre-trip budget plan, subtract the cost of lodging and acontribution to an emergency fund (always a good idea, even when traveling) and put the rest in my pocket.
This "back pocket" method of budgeting lets me keep track of my daily expenses without worrying too much about the arithmetic. If I spend less on lunch than I had planned and want to know if I have enough for a fancy dinner, there is no need to dive into the books or power on the calculator. I simply reach into my pocket and discreetly count the money I have left for the day. If you are nervous about being caught without enough money, take a traveler's check or two as an emergency cushion.
As an added benefit, only carrying one day's worth of money on your person acts as a bit of protection in the unfortunate event you are mugged or pick pocketed.
Personally, I don't like to keep detailed, itemized, expense reports while traveling. However, if you travel for business or use a credit card to pay for everything it is a good idea. There are many resources for tracking spending and managing your money online. If you will be traveling with your cellphone, a service like xspenser would may be a good option. Of course, there is always the pen and paper method. Having a pen and small notebook handy is also great for taking notes about your experiences.
Whether you have been using the "back pocket" method, keeping a detailed expense report, or some combination of the two, frequent reviews of your spending and pre-trip budget are key to staying on track. Depending on the length of your trip take time every few days or every week to evaluate how much you have spent, how much is left, and how you stand in terms of the initial plan. These frequent reviews will help catch problems before they get out of control, and allow you to get the most out of your savings.
A final budget review after you have returned home is a great way to assess the status of your now depleted trip fund. It is also a great time to create a savings plan for the next trip.
How do you keep track of expenses when you travel?