How to Budget for a Trip

Making a budget is the most important step to Bottom Dollar Backpacking. It will push you to travel cheaper, so you can travel longer and more often. In this post, you’ll learn how to budget for a trip!

You will also have a better idea of how easy it can be to travel. Anyone can do it! We’ve traveled all over the world, with dozens of people. Nearly all of them make less than $30,000 a year.

During college, I was able to travel to over 10 countries while going to school full time, working part time, and making less than $15,000 a year. It all comes down to strict budgeting.

Budgeting will also show you how much you need to save for that trip you’ve always wanted to do.

There are several methods on how to budget for a trip. Our preferred technique for making trips as affordable as possible is bottom-up budgeting, which I describe below. You can achieve a Bottom Dollar budget for every country using this method.

Many of the tools discussed here are described in depth in our general Saving While Traveling section. In this article, we will be actively applying those tools.

Once you have a trip budget, you then need a time frame for when you would like to go.

Let’s say it’s currently March, and you’d like to go on a trip in September for $1,500. You will need to save $250 per month to afford this trip– sounds pretty doable!

The further ahead you plan, the easier it becomes. Saving $300 per month for a year would allow for either three $1,200 trips, two $1,800 trips or one epic $3,600 trip!

Read about How to Save While at Home to start making those trips happen!

Bottom-up budgeting uses the tools described in How to Save While Traveling to find the Bottom Dollar budget for a trip. Instead of having a set budget before you even look into a trip, you create the lowest possible (“Bottom Dollar”) budget.

Rather than saying “I’ve saved up $750, so that’s my budget,” you ask “I’d like to go to [Paris]. What is the cheapest way I can do that and still see everything I want?” The former is an example of top-down budgeting, which we describe in detail below.

With bottom-up budgeting, you’ll start by looking for the cheapest flights and hostels. Between those costs, you can usually get a good idea of how much the budget for a trip will be. When hostels are affordable, generally that means everything else will be relatively cheap.

The “Base Budget” for a trip consists of the unavoidable costs: flights, ground transportation, accomodation, visas, etc.

Note the difference between a Budget Vacation and a Budget Trip.

A Budget Vacation usually doesn’t involve much travel, just flying to one place and staying there. A Budget Trip involves a lot of moving around, which adds more transportation cost.

I will give three examples of a trip’s Base Budget. First, a one-week vacation to Cozumel, Mexico. Next, a two-week trip to Thailand.

The third is an actual trip I am currently planning to Israel, Jordan, and Egypt. During this three-week trip, I will visit many of each country’s top attractions, including Jerusalem, Petra, and the Pyramids.

All of these budgets are from the point of view of a single traveler in Boise, Idaho. Feel free to follow along using your own hometown.

You will notice that I round up all prices. I do this to stay on the safe side, as taxes and variable prices can change the cost quite a bit. Any extra saved can go towards amazing food and activities, or the next trip!

When planning your trip, use every tool you can to save money. I suggest using several of the tools described in Saving While Traveling to find the best deals on flights and accommodations. (Of course, all of these trips would be a bit cheaper with flight benefits and staying with locals!)

To keep it simple, I’ve used the three websites which usually find the best prices: Google Flights, Rome2rio, and Hostelworld.

Using these helpful sites, I will form the Base Budget for each trip.

For a vacation, it’s fairly easy to get a general idea of the cost because you’re staying in one place. All we need to consider for this trip are transportation and accommodation costs.

First, let’s look at flights. When going to Cozumel, it’s cheaper to fly into the larger airport of Cancun.

Check out the above Price Graph from Google Flights. You can see that for a seven-day trip, you can easily get round-trip tickets to Cancun for less than $500. (Although, I’ve seen rates as low as $250 before!)

We’ll round up and set the flight cost in our example to $500.

From Cancun, you will then need to get to the island of Cozumel.

Rome2rio is a good website for finding the best way from Point A to Point B. Always double-check the prices though, as they are sometimes incorrect.

For example, it says the cheapest bus to the ferry terminal costs $6. However, on the ticketing website, we can see this is the locals-only price.

If you’re not a local, the bus ride will cost $10 each way. A round-trip ticket for the ferry is about $25.

Now let’s look at hostels. Here is a screenshot of the two cheapest options from a quick search on Hostelworld.

Not too bad. I actually stayed at Amigos Hostel for a few nights on my own trip to Cozumel– it was very nice!

Since they both have good ratings, let’s go with Blue Magic Hostel, as it’s closer to the city center.

Only $80 for a week-long stay in one of Mexico’s best snorkel and diving locations!

Total Base Budget for 1 week in Cozumel, Mexico: $625

• $500 round-trip flight
• $45 other transportation costs (bus and ferry)
• $80 accommodations

Now for a more complicated trip. For two weeks in Thailand, you’ll want to look into what cities/areas you would like to see. Only 3-4 cities max would be best, in order to have enough time in each.

The three most popular cities to visit in Thailand are Bangkok, Phuket, and Chiang Mai.

Looking at round-trip flights, I found it is cheapest to fly into and out of Bangkok.

Round-trip tickets to Bangkok can be found for just under $1,000 easily. You can see these prices are consistent over time, so we’ll use $1,000 as our base cost for the flight there.

While it may seem more expensive to get to Thailand, you will really save once there!

For example, let’s look at a flight from Bangkok to Chiang Mai 5 days later.

No, your eyes are fine. It really is only $18! Flights from Chiang Mai to Phuket are $31. Phuket back to Bangkok costs $21.

With pretty gracious rounding, we’ll say all the flights are definitely able to be done for $1,100 with proper planning.

Other transportation costs to consider:

Bottom Dollar Backpackers’ go-to transportation is walking. Walking to most attractions and taking a few cab rides in each city will keep other transportation costs low.

The average 20-30 minute taxi ride in Thailand is under $5!

We’ll add on $50 to the transportation budget for a few taxi or tuk tuk rides in each city.

At this point, I look into everything I would like to do in these cities and make a general time frame for each. Let’s split the two-week trip up like this: 5 days in Bangkok, 4 in Chiang Mai, and 5 in Phuket.

Let’s go to Hostelworld!

Less than $20 for 5 nights in Bangkok, close to the city center. Accommodation in Southeast Asia is super affordable. After looking at hostels and flights, I can assume food and activities will cost less too!

Sorting by lowest price first and searching for hostels close to the city center with high ratings, I was able to find 4 nights in Chiang Mai for $15 and 5 nights in Phuket for $35.

Total Base Budget for 2 Weeks in Thailand: $1,220

• $1,100 flights
• $50 other transportation costs
• $70 accommodations

You can see now that flights are a huge limiting factor, most often your greatest expense. This is why we recommend looking into flight benefits!

While 14 nights of accommodation in Thailand is about the same as the week in Mexico, the flights make the Thailand trip much more expensive.

Now that you understand the basics of creating a Base Budget, let’s look at an even more difficult trip. My trip to Israel, Jordan, and Egypt includes three land-border crossings, nine cities, and lots of modes of transportation.

Here’s the Base Budget breakdown:

Israel visa – $0

Egypt visa – $25

Jordan Pass – $106 (includes: Jordan visa, 2 days Petra entry, Wadi Rum entry, and more)

Flight to Tel Aviv, Israel – $800

Bus to Jerusalem, Israel – $3

3 nights accommodation in Jerusalem – $57

Bus to Bethlehem, Palestine (round trip) – $5

1 night Bethlehem – $20

Bus to Eilat, Israel – $25

1 night Eilat – $28

Israel exit tax (into Jordan) – $33

Taxi to Jordan border, taxi to Aqaba, Jordan – $10

2 nights Aqaba – $20

Bus to Wadi Musa, Jordan – $15 (or cheaper local bus)

3 nights Wadi Musa – $35

Bus to Aqaba – $15 (or cheaper local bus)

Jordan exit tax – $12

Taxi to Israel border, taxi to Eilat – $10

Bus from Eilat to Egypt border – $5

Israel exit tax (into Egypt) – $30

Egypt entry tax – $22

Bus from border to Dahab, Egypt – $6

4 nights Dahab – $20

Bus from Dahab to Cairo, Egypt – $8

3 nights Cairo – $19

1 night train from Cairo to Luxor, Egypt – $10

2 nights Luxor – $27

1 night train from Luxor back to Cairo – $10

Flight home from Cairo, Egypt – $550

Total Base Budget for three weeks in Israel, Jordan, and Egypt: $1,935

• $1,350 flights
• $125 other transportation costs
• $230 accommodations
• $230 visas and taxes

Here is an example of how much having flight benefits can help. With Katelyn’s benefits, she and I can fly to Tel Aviv for $112. That’s less than $60 each!

From Cairo back home will be less than $300 each.

Personally, I think the cost for the trip in the last example is a bit high. I prefer to spend less than $30 per day while traveling.

In places like Cairo, where the hostel is $6/night, that’s easy. In all of the Israeli towns, where even the cheapest hostels are over $20 per night, that’s difficult.

To lower costs for my trip, I will be using Couchsurfing and some other tools described in our How to Save While Traveling posts. Staying with a local for even 2-3 nights will bring the budget down.

Many low-end budget travelers prefer Couchsurfing. This is the lowest level of comfort most travelers will opt for.

All three of these trips are great examples of how affordable travel can be. All you really need are back-of-the-plane seats, somewhere to sleep at night, and some form of ground transportation. (Yes, ground transportation can include your feet!)

For more tips on how to lower your Base Budget for even cheaper trips, check out our posts on How to Save While Traveling. For a comprehensive e-book of our best budgeting tips, sign up for our email list!

Top-down budgeting is for those who would rather have a set overall budget for a trip. For example, you have $1,000 saved up and want to go Belize for 10 days.

To make the following examples simpler, I will not include flights. The previous bottom-up examples showed how you could incorporate them into your Base Budget.

Flight prices vary a lot, and we will have a separate post on How to Get the Cheapest Flights Possible. In this Belize example, the $1,000 would be for accommodation, transportation, activities, food, and drink.

With this budget, you could move that money around in many ways to choose more luxuries or activities.

You could stay in the cheapest hostel and spend more on excursions, restaurants, and bars.

Or you could spend more on an amazing Airbnb. You would make your own drinks and food, and relax in a large house with a pool, private beach, and game room. (If you’re with a group, a top-tier Airbnb can cost less than $20/person!)

Whether you choose bottom-up or top-down budgeting, you need to make a daily spending, lump sum or categorical budget.

The Belize trip above is an example of a lump sum budget. It’s where you start with the amount you want to spend.

Lump sum budgeting is how most people budget for a trip. It’s method for inexperienced travelers.

Instead of thinking about how much to spend per day, you budget one large amount for the trip. Usually, not much thought is put behind the how or what to spend money on beforehand.

Once your flight lands, you start spending on whatever you’d like, only slowing down when your money runs low.

This method is fine. However, it doesn’t push you to make trips less expensive. Your plan is to spend all of that money on that trip, regardless of whether it could be done cheaper.

Lump sum budgeting doesn’t follow the Bottom Dollar Backpackers’ philosophy of saving for the future.

When you start to put more thought into what you’re spending your money on, you’re getting into categorical budgeting. This is often the first step most people take in learning to budget for a trip.

A categorical budget can be created from bottom up or top down.

You can start at the bottom, researching how much hostels and food seem to cost in the country, then form a budget.

Most people, however, go from top down. They then split their lump sum into the food budget, drinks budget, etc.

Using categorical spending in a top-down manner still pushes you to spend all of your trip savings.

We don’t recommend saving for, or spending on trips in this way. You worked hard for your savings, and you should get as much out of them as possible!

Categorical budgeting from the bottom up has been great for us. Generally, we have one budget for activities and one for food/drinks.

Looking at how much food costs, then forming a general budget is useful. For example, in Belize a nice meal costs around $15.

As a general rule of thumb, I’ve found that you can make three good, homemade meals on $10 of groceries per day.

If we then made a food budget of $160, we could afford to eat out for 4 meals, and spend $100 on groceries. Additionally, we’d have our separate activities budget.

What’s nice about budgeting this way is that if food at the grocery store is cheaper than you expected, you can eat out more. If restaurant food ends up costing more than you anticipated, you can plan accordingly before spending too much.

Similarly, if you score a deal on an activity you want to do, you’ll have a bit more in your activities budget to maybe splurge on another excursion.

We haven’t always been good at budgeting. On our first trip to Europe, we ended up spending nearly $1,000 on food and drink in three weeks.

We saw that entrees cost 10-15 Euros and thought they were pretty affordable. After paying for water, a couple glasses of wine, and taxes, most meals came out to be $20-30 per person. (Not to mention the 15 Euro beers at Oktoberfest– at least they were big!)

Had we formed a budget and paid attention like we do now, we probably would have saved $500 each.

Katelyn and I learned from that experience. We knew that we had to get better at budgeting, or we wouldn’t be able to travel as much as we wanted to.

There are two ways to use daily budgeting.

For short-term travel, you will probably book your hostels ahead of time. In this case, accommodations will be included in your Base Budget. The Daily Budget will then include only food, drinks, and activities. A daily budget never includes flights.

For long-term travel (weeks to months at a time), hostels are generally booked as you go. Accommodation would then be included in the Daily Budget.

Long-term travelers tend to use the daily budgeting method. This makes it easier as they travel for months at a time.

Instead of planning trips as in-depth as the examples above, they use the daily budget technique to know how much they can spend each day. 

If a long-term backpacker wanted to travel for 100 days on $50/day, they’d need to save up $5,000. A full year on a $30/day budget would come to about $11,000.

Often, they’ll purposely spend less than their daily budget for several days to “save up” for a more expensive tour or activity. 

For example, a friend we met in Turkey had a budget of $30 per day. In order to afford the iconic Cappadocia hot air balloon ride, she made all of her own food and only did free activities for a week, spending max $15 per day. 

By doing so, she was able to “save up” enough for the excursion.

Before creating a daily budget, it’s important to research the cost of things in the area you’re going to. Also make note of any of your “must-do” activities. 

This will give you a good idea of a reasonable daily budget. Thirty dollars a day can get you pretty far in Istanbul, but not so much in Barcelona! 

Bottom Dollar Backpackers suggests bottom-up budgeting as much as possible. Even if you’ve got the cash, there’s always a way to make your dream trip more affordable! 

By doing the research (or using our research) to form a Base Budget, you are well on your way. You can then use Categorical Budgeting or Daily Budgeting to form your Overall Budget. 

Most short-term travelers budget for flights, transportation, accommodation, and visas separately, as these are usually purchased pre-trip. The Daily Budget in these examples will include food, drinks, and activities.

Let’s do an Overall Budget for our example trips using a Daily Budget of $30/day and $50/day. Remember that food can easily be done on $10/day when making your own meals.

$30/day x 7 days = $210 

$50/day x 7 days = $350 

Consider that the beach and snorkeling with your own equipment is free. (We highly recommend this). 

These daily budgets can then definitely afford a few restaurant meals and drinks from the bar. It would also allow you to book some scuba diving or snorkeling tours!

Base Budget + Daily Budget = Overall Budget

$625 + $210 = $835 on $30/day

$625 + $350 = $975 on $50/day

$30/day x 14 days = $420

$50/day x 14 days = $700

That will go a long way in Thailand!

Base Budget + Daily Budget = Overall Budget

$1,220 + $420 = $1,640 on $30/day

$1,220 + $700 = $1,920 on $50/day

$30/day x 21 days = $630

$50/day x 21 days = $1,050

The Jordan Pass was already included in our Base Budget, so some activities are already accounted for.

Base Budget + Daily Budget = Overall Budget

$1,935 + $630 = $2,565 on $30/day

$1,935 + $1,050 = $2,985 on $50/day

Let’s factor in $10/day for food using the lower daily budget for the Mexico and Egypt trips. That leaves $20 per day for activities.

In Mexico, where you’re probably doing more free activities like going to the beach, that budget is fine.

On the Egypt trip, it’ll require a few “save up” days to afford activities like the Pyramids of Giza, with a ~$30 entry fee. With most other excursions being free or cheap (museums, etc.), this should be an easy budget to stick to.

All of these trips are possible for $50 (or less!) per day.

Forming an Overall Budget is now as easy as calculating a Base Budget, and adding on $30-50 per day for most countries!

You’ll stay at highly-rated hostels, do paid activities or eat out every other day, and see all the country’s highlights.

Some people say a budget this small isn’t possible for the USA, Europe, Africa, and other “expensive” areas. In our How to Save for Travel posts, I’ll show you how it is possible with a few tricks. 

We did a week in Hawaii, one of the most expensive states, for less than $50/day– twice (the Big Island and Kauai)! In Kauai, we challenged ourselves and did the trip for less than $20/day.

Two weeks in Peru? Flight cost + $700. One week in Costa Rica? Flight cost + $350. 

We will post a “how to budget” for every country we’ve been to, showing you how to travel for as little as $10 per day. 

In those posts, I will use a few unique terms:

• True Bottom Dollar Budget
• Preferred Bottom Dollar Budget 
• Supreme Bottom Dollar Budget
• Extravagant Bottom Dollar Budget

For those traveling on less than $30/day.

The toughest of budgeters fall into this category. Sticking to this budget can be accomplished with lots of forethought and planning. 

A True Bottom Dollar Budget uses techniques that might be uncomfortable to the average traveler, like couchsurfing, hitchhiking, and camping. You will learn quickly that these tricks both save you money and allow you to meet more locals. 

Often, a True BDB includes working a few hours a week. The traveler may help out at a hostel or do some under-the-table work for extra cash (waitressing, bartending, dive shop, etc.). 

One benefit of this type of travel is that you get a deeper understanding and connection to the country. 

These are seasoned travelers.

For those traveling on $30-50/day.

When you reach this level, you’re really getting the hang of budgeting for your trips.

You are experienced enough to learn how to do things yourself. You don’t need tours and restaurants. Instead, you just need bus tickets, a good pair of shoes, a kitchen, and a local cooking class.

In addition, you take home more wild experiences and knowledge on each and every trip (not to mention the money you save). You know how to cut corners and cut deals.

All you need to be comfortable, anywhere in the world, is a confirmed spot on a one-inch thick mattress. You are a gifted traveler who seldom falls for the scams and high prices that are pushed on you.

You don’t need cell service, because you already know where you’re going. And if you don’t, you’re confident in your ability to figure it out.

For those traveling on $50-100/day.

Having a comfy bed and eating out for every meal is a well-earned luxury for these travelers. After a long day of do-it-themself tours, they like to enjoy a delicious meal and beer at a local restaurant. 

They hunt for and eat bargains for breakfast (literally). Finding hole-in-the-wall restaurants and off-the-beaten-path attractions is a skill. 

These travelers know what they want, and they get it. They are more spontaneous, as their budget allows them to be. Private room upgrade? Sounds nice for a night. Tour guide to learn more about the history and culture? Why not! Going out for a raging party or splurging on a fancy coffee won’t break this budget. 

They’re also keen to rough it a bit for a few days, to afford high-end activities like scuba diving, golf, or ziplining. 

For those traveling on $100-200/day.

The highest end of budget travelers. (Any higher than this and you’re a budget hotel stayer, which is a different and more complicated game.)

This is the kind of traveler who can afford to dive in a bit more. You most likely won’t see them cooking for themselves– after all, they’re on vacation. 

Occasionally they head out to try some of the nicer restaurants, but they mostly eat at local joints. Drinking at a rooftop or beachside bar is a great way to end the day with this budget range. 

Mostly these travelers stay in small Airbnbs or private rooms in hostels. This provides privacy for one or two people to relax in their own space during the trip, whenever they’d like. 

The Extravagant BDB could also work for one tough family. At three to fives times that of the lowest two ranges (True and Preferred), a small family could definitely travel on $100-200/day total. 

Occasionally eating out, with two- or three-bed private rooms, this budget is great for a small family willing to rough it a bit to show their kids the world. During my travels, I’ve seen many families having a blast in their own private rooms of the hostel. 

The important part of budget traveling is actually making a budget for yourself and sticking to it. It is essential to do this both at home and abroad.

Just like everything in life, you have to make specific goals and commit to them. You will be surprised at how much you can save with just a few changes!

With our tips for Saving While Traveling and Saving at Home, you’ll be well on your way to the trip of your dreams.

For one two-week trip a year, a $1,500 budget would cover a lot of countries, including flights.

Using Google Flights and setting it to a max of $800 for flights (+$700 at $50/day for 14 days = $1,500), look at all the places you can go!

Over 12 countries in Central and South America are accessible from most major US cities with this budget. All of the blue dots are flights that are in this price range.

I found 13 countries in Europe that are accessible on this budget too! When I increase the price range for flights to $1,300, every major airport in the world turns blue.

For a one-week trip, nearly every country is possible with $1,650 ($1,300 + $350 for a week at $50/day). For $2,000 ($1,300 + $700 at $50/day for 14 days), you could take a two-week trip to almost any country in the world!

If you stuck to just one $1,500 two-week trip per year, you’d be busy for the next 25 years!

Now all you have to do is save that money. To save $1,500 for one two-week trip a year, you need to put aside $125 per month. (Or $95/month for a $1,150 one-week trip.)

That’s less than $35 per week that you need to cut out of your at-home budget. I’m sure you can do this with our budgeting tips!

If you save $250 a month, you can afford two two-week trips a year. Saving $500 per month, you can do four!

A nice part about saving is that a good portion of the cost is the flight. Once you’ve saved up enough to buy the flight for about seven months out, you just need to save $100 or less per month during those seven months before your trip!

It’s also a lot easier to save when you have an end-goal in mind. Once you’ve bought the tickets, putting $100 a month in your travel savings account will get you excited!

This means you don’t have to wait until you’ve saved up $1,500 then buy everything at once. You could start saving now, buy tickets in 3-6 months, and head out on your first trip within the year!

We hope that this post has opened your eyes to just how cheap traveling can really be. Let us know if this has given you inspiration to get started budgeting for your own trip.

We’d love to know where you plan to go now that you know you can afford it!