How to set a travel budget, and how not to blow it
Most travel budgets break on small daily spending, not on the flights. Here is the four envelope method and the costs everyone forgets to plan for.
A travel budget almost never breaks on the big items. The flight and the accommodation are booked in advance, you know the amount to the euro, and they don’t move again.
What blows a budget is the fifteen euros a day you counted nowhere. The morning coffee, the taxi you take because it’s raining, the museum ticket, the souvenir. Over ten days, fifteen euros becomes a hundred and fifty, and a hundred and fifty on a thousand euro budget is fifteen per cent.
The four envelope method
I split every travel budget into four blocks, because they don’t obey the same rules.
1. Long distance transport. Flights, trains, car hire. Known in advance, paid in advance, fixed. It is the only envelope that stops moving once booked.
2. Accommodation. Known in advance too, unless you’re improvising. Allow one spare night if your route isn’t fixed.
3. Daily spending. Food, local transport, drinks, small entry fees. This is the envelope that drifts, and the only one you need to track day by day.
4. The exceptional. A dive, an excursion, a concert, the good restaurant. These are large and rare. List them before you leave, with their price: they are decisions, not accidents.
How much to put in the daily envelope
Here are the orders of magnitude I use, per person per day, excluding accommodation and long distance transport.
| Destination | Frugal | Comfortable |
|---|---|---|
| Southeast Asia | €25 | €50 |
| Southern Europe | €40 | €75 |
| Northern Europe | €70 | €120 |
| Japan | €60 | €110 |
| United States | €75 | €140 |
Multiply by the number of days and the number of people, then add 15 % of margin. That margin isn’t excessive caution: it is the line that absorbs the rainy day, the bad meal you replace, and the one taxi too many.
The five costs everyone forgets
- Getting to the airport, both ways. Long stay parking, or a shuttle for two people: often 60 to 100 euros.
- Bank charges. Between 2 and 3 % on every payment outside the euro zone, plus a flat fee per withdrawal. On 800 euros spent, that is 25 euros that buy you nothing.
- Tourist taxes, paid on arrival and rarely included in the advertised price.
- Travel insurance, if your card doesn’t cover the destination or the activity.
- The first and last day, which always cost more than the others: you arrive tired, you eat next to the station, you take a taxi.
Tracking during, not just planning before
The part almost nobody keeps up is tracking during the trip. And yet it is the only one that lets you correct course: knowing on day 4 that you are 20 % above the planned rate leaves six days to adjust. Discovering it on the way home only buys you regret.
Tracking fails for the same reason every time: it asks you to enter a expense at the moment you least want to get your phone out, which is on a terrace, with other people, with a share that isn’t yours.
The fix is to cut entry down to the bare minimum: an amount and a category, right away, even rough ones. Currency conversion and everyone’s share can wait for the evening, when you have a quiet minute. A plain note on your phone is enough on your own; with a group, a shared spreadsheet saves the awkward sums when you get home.
The travel budget calculation, in one line
Transport + accommodation + (daily × days × people) + exceptional + 15 %.
The only hard number in that line is the daily figure, and it is also the only one you can refine with every trip, provided you measured it once.