Think it’s impossible to travel on a budget? Think again. Travel may be a luxury, but it doesn’t have to be an expensive one. And here’s how you can do it, step-by-step, without going broke.
1. Start With Your Budget
Before you pack your bags, know your budget. Can you afford to travel right now? If not, when? And if so, how much can you spend? Once you know your budget, figure out what destination makes the most sense (cents). Major costs to factor into your travel budget include:
- Lodging (per night)
- Food and drinks (per day)
- Entertainment (total)
- Souvenirs and gifts (total)
These costs can vary wildly based on your destination, the season, and whether you booked early or at the last minute.
2. Research Your Destination
Some destinations are pricier than others. Let your budget guide you. It’s harder to visit Iceland than India, as an example. And it’s cheaper to stay outside of major cities than in them, although this isn’t always practical. Say you were traveling to New York City, you could save a lot by staying in one of the outer boroughs or neighboring suburbs versus Manhattan. Here are some questions to ask yourself when researching your destination:
- Can you forgo convenience? The more you rough it, the more you save. Can you book your trip during an off-peak month, fly during off-peak hours, or take connecting flights instead of direct ones?
- What are your non-negotiables? If you want to dine out every night, that’s OK. Can you stay at a hostel, couch surf or find a cheap Airbnb rental to offset the cost? What about taking a red-eye flight? Rank your priorities then budget accordingly.
- Are you shopping around? It’s tempting to book the first place that catches your eye. But you’ll save money using price comparison tools like Skyscanner, Hopper, Kayak, and others. Third-party websites often undercut airline prices, but check them both.
3. Stick to Your Plan
All these plans are for naught if you don’t stick to them. Here are a few pointers on how to stick to your plan, travel, and come back with your pockets intact:
- Factor tips into your budget. Research the tipping customs in your destination and add this to your budget. Whether it’s for drinks, live shows or drivers, make sure you include it.
- Be realistic about your budget. If you like a bottle of wine with dinner, or want to go out for cocktails every night, then factor that in. There is no quicker way to blow your budget, then not planning for things you know you’re going to want.
- Set a daily budget. If you know your daily allowance, consider only taking that much money with you when you go out each day. You can’t go over budget if you don’t have the cash on hand.
- Look for free activities. Free walking tours and other activities abound virtually everywhere, you get to learn from locals, and the only cost is a small tip at the end.
- Add 10% to your budget for incidentals. You can’t account for everything, so it’s best to add a markup to cover any unexpected costs, since there are bound to be some.
4. Use Travel Credit Cards
Consider opening a travel credit card if you haven’t already, as many offer sign-up bonuses you can put towards airfare, lodging and other travel essentials. If you are diligent and responsible about paying off your balances monthly, there’s no harm in having a new credit card and it can save you considerable cash when booking your trip.
Then, once you’re on the ground, charge according to your budget. The more you charge, the more points you earn, and the more points you earn, the more rewards you get. The more rewards you have, the cheaper your next trip will be. But only charge what you know you can pay back at the end of the month, so you avoid paying interest.
5. Consider Travel Insurance
If you don’t have a credit card that offers travel insurance, consider buying it outright. Nothing can turn a leisure trip into an expensive nightmare faster than a missed flight, lost luggage or an unexpected medical emergency. Plus, many plans will reimburse you should you need to cancel your trip. Carefully review the policies of each plan so you know what’s covered.
Here’s what to look for if you want to purchase travel insurance:
- Medical coverage. If an illness or accident occurs during a trip, this will cover it.
- Cancellation coverage. This may cover you if you need to cancel your trip due to weather, sickness, injury, or work-related obligations.
- Interruption coverage. This coverage benefit may reimburse you for expenses incurred if your trip is interrupted once you’ve already taken off.
- Lost and damaged baggage coverage. This benefit may provide you with coverage if your personal belongings, like luggage, are lost, stolen, or damaged during a trip.
- Cancel for Any Reason (CFAR). This benefit may reimburse you for the entire trip (or a portion of the expenses) if you decide to cancel your travel plans for any reason.
Our Two Cents
If you want to travel on a limited budget, the first step is knowing your budget. How much can you actually afford, knowing you should add a 10% buffer on top of your budget to cover any accidents, emergencies or incidental costs? You don’t want to cut it that close in foreign lands. Then research your destination options and be clear about your priorities.
Want a beautiful view? Consider eating out less or skipping the gift shops. Want to fly in style or rent an exotic car once you land? Go for it. But consider cheaper lodging options. Be realistic about your budget so you can stick to it once you get to your destination. Think about using travel credit cards as a way to offset costs and accrue points to cover future trips, and buy travel insurance so you don’t have to worry.