How to Create a Travel Budget Without Losing Your Mind (or Your Savings)

Let’s talk about budgeting. Now, before you roll your eyes and click away to watch another cat video, hear me out. Budgeting isn’t some dreary chore designed to suck the fun out of travel. It’s more like a gentle safety net to catch you when you inevitably stumble upon something irresistible.

Full disclosure: I’ve been terrible at budgeting for most of my adult life. I mostly just ignored budgeting and hoped it would all “just work out” until my 30’s. Terrible strategy; I don’t recommend it. It wasn’t until I decided I really really wanted to travel extensively that I buckled down and started budgeting seriously. The result: being able to travel to 18 new countries over the last six years and not stressing out about money because, for each trip, I created a realistic travel budget plan, saved a specific amount, and (mostly) stuck to it.

Budgeting isn’t about being cheap or saying no to indulgences. It’s about being smart with your money so you can say yes to things that are really meaningful to you.

In this guide, I’ll help you learn how to create a realistic and flexible travel budget. We’ll dive into everything from setting your travel priorities to building a travel budget planner that doesn’t require an accounting degree. By the end, you’ll have a plan that keeps you financially sane without sacrificing any fun. Because that’s actually possible—really!

Step 1: Set Your Travel Priorities

First things first—what do you want out of this trip? Are we talking luxury or shoestring? Adventure or relaxation? Because, spoiler alert, your priorities will steer the budget ship.

This is the big question to ask yourself before you even start packing. Are you dreaming of lounging in a five-star hotel, sipping cocktails by the pool? Or are you more about the thrill of the open road, with a backpack and a bed in a hostel dorm? Maybe you’re like me and want a bit of both worlds—a dash of luxury here, a sprinkle of adventure there. The good news? You can have it all, but you’ve got to be strategic about it.

Your priorities will shape your budget. Want to splurge on a swanky hotel for a couple of nights? Go for it! Just know that it might mean eating like a local the rest of the time (and by that, I mean street food, not Michelin-starred restaurants). Craving an adrenaline-pumping adventure like bungee jumping or a helicopter tour? Amazing. Maybe offset that cost by taking public transport instead of Ubering everywhere. It’s all about balance.

Now, this doesn’t mean you have to compromise on every single thing. It’s about deciding where you want to put your money. Think of it like a travel budget menu—you get to pick and choose what’s worth splurging on and where you’re happy to save a few bucks. It’s perfectly fine to mix a little budget travel with a taste of the high life. We’re aiming for that sweet spot where you get to experience the best without having to sell a kidney to fund it.

Actionable Tip: Make a list of your must-haves and nice-to-haves. Must-haves are the things that will make or break the trip for you—whether that’s staying in a central location, eating at that famous Michelin-starred restaurant, or taking a guided tour of the city. Nice-to-haves are those extras that would be great if they fit into the budget but aren’t essential to your experience. This little exercise helps you see where you can allocate funds and where you can potentially save. Plus, it makes budgeting for travel feel a bit more like planning your perfect adventure and less like a math class.

Step 2: Research, Research, Research (But Make It Fun)

Time for some good old-fashioned research. Think of it as a treasure hunt where the prize is knowing how much you’ll actually need for your trip—or at least not being floored by the price of a beachside cocktail.

The Power of Information: When creating a travel budget, knowledge is power. Knowing the average costs for flights, accommodation, and activities helps you set a realistic budget. It’s the difference between a trip you can afford and a sad spreadsheet full of wishful thinking. And it’s better to find out now that a 15-minute taxi ride will cost you a small fortune than to be shocked after the fact.

Tools and Tricks: Luckily, we live in the golden age of travel tools and apps to make this easier. Start with flights—Google Flights and Skyscanner are my two go-to’s for setting up price alerts. For accommodation, Hostelworld is a great option for true budget stays, and Airbnb offers everything from a cozy room to an entire villa. Then there are the classics: Booking.com and Hotels.com. I’ve found some incredible deals on really nice boutique hotels on several of my trips using these sites, proving that a little digging can lead to some major savings.

Dig Deeper: Travel blogs covering your destination (like this one!) are a great place to start for firsthand tips from someone who’s been there, done that—perfect for uncovering those unexpected expenses. If you need more info, Reddit and TripAdvisor are other good places to research.

In short, research isn’t just about finding the cheapest flight or the most Instagrammable Airbnb. It’s about arming yourself with info to create a travel budget plan that won’t leave you in a money panic on day three. Plus, it can actually be a fun part of the planning process—like laying the groundwork for your epic adventure.

Step 3: Create a Travel Budget Spreadsheet

Alright, it’s spreadsheet time! Before you start zoning out, hear me out. Creating a travel budget spreadsheet can actually be kind of empowering—especially when it means more money for sunset cocktails and fewer surprises along the way. Plus, there’s something satisfying about seeing all your expenses neatly laid out, like you’re the CEO of your own vacation.

Breaking It Down: The key to a good travel budget planner is breaking everything down into categories: flights, accommodation, food, transportation, activities, and those inevitable extras. Start with the big-ticket items like flights and accommodation. Use your research to estimate costs and plug those numbers in. Then, move on to daily expenses—food (breakfast, lunch, dinner, and snacks), local transportation, and activities. Don’t forget a cushion for unexpected costs, like that impromptu night out or the artisanal cheese you couldn’t resist. Lastly, include a section for extras such as travel insurance, visas, and that all-important “overages” category for those little splurges.

Accommodation Hacks: Consider alternatives like hostels, couchsurfing, or pet-sitting. Hostels aren’t just for the backpacker crowd anymore—they offer clean, affordable options, often with private rooms. Couchsurfing provides a free place to stay and a chance to connect with locals, while house-sitting lets you enjoy a whole place to yourself in exchange for looking after someone’s pets.

Eating on a Dime: Food can be a big expense, but eating like a local can save you a lot. Seek out street food stalls, explore local markets, and cook your own meals if you have access to a kitchen. Not only will this save you money, but it’s also a delicious way to experience the culture. I’ve had many an incredible meal that has been an impromptu picnic with fresh, local goodies picked up that morning.

Transportation Tips: Walking is the cheapest and often the most rewarding way to explore a city, letting you discover every nook and cranny along the way. Public transport is also a great option—many cities offer affordable day passes or tourist travel cards. And while I usually avoid taxis or Uber to save money, there are times when it’s worth the splurge—like when you’re dealing with horrendous jet lag and luggage, it’s late at night, or safety is a concern. In those cases, spending a bit more for convenience and/or peace of mind is totally justified.

Free Activities: Don’t overlook free experiences. Hiking, beach days, and free walking tours (though tips are appreciated on tours) can be incredibly memorable parts of a trip. Many cities also offer free museum days. Sometimes, the best moments don’t cost anything at all.

Use Airline Miles and Hotel and Credit Card Points: Another way to stretch your budget by using airline miles or hotel points to offset the cost of your flight and accommodation. If you don’t have enough points to book, keep in mind that certain credit cards like Chase Sapphire or most Amex cards accrue points that you can then transfer to airline and hotel partners.

So, grab your laptop, open up Google Sheets, and start plotting out that travel budget. A little prep work now means a lot less stress later, letting you fully enjoy your adventure with the peace of mind that comes from knowing you’ve got your finances under control.

Step 4: Be Realistic About Your Budget

Okay, real talk—it’s time to get honest with yourself about what you’re actually going to spend. This is not the time to picture yourself as some ultra-disciplined budget traveler who subsists on granola bars and magically avoids every tourist trap. Inconvenient truth: you’re going to spend more than you think.

I’ve been there—mapped out the perfect, tight little budget, imagining myself living off street food, walking everywhere, and saying no to that tempting extra glass of wine. Or maybe you planned to walk to the museum, but then it started pouring, and suddenly you’re in an overpriced cab. Things happen.

Case in point: I love souvenir shopping, and sometimes my self-control goes out the window. Reykjavik last summer is a prime example. I went shopping for souvenirs on my last full day in town. I meant to get some fridge magnets (my thing I buy everywhere I go) and maybe a small piece of local artwork that I could easily fit in my suitcase (tons of really amazing local art for sale there). Fast forward a few hours, and I am the proud owner of two new hats, a silver necklace and earrings, not one, not two, but five small-ish pieces of local artwork, and two expensive but incredible-smelling candles and reed diffuser, oops. (Stormur from the Icelandic brand URÐ; smells amazing, no regrets!).

But here’s the catch: I had some contingency funds in place in a category I call “overages.” So, as it turned out, despite my obvious lack of shopping self-control, I didn’t actually blow my budget completely out of the water (still admittedly a wee bit over, but I managed).

Revise that spreadsheet you just made: So let’s pull up that spreadsheet again and revise all the aspirational budget savings to reflect how you know you’ll act IRL. Here, it’s better to overestimate than underestimate. If you think you’ll spend $50 a day, budget for $70. If you’re sure you’ll only buy one souvenir, maybe factor in two. You want a buffer for the things you won’t see coming—like surprise fees, extra transport costs, or that spontaneous cocktail at a rooftop bar. You don’t want to be the traveler who’s digging through their pockets on day four of a seven-day trip, wondering where all the money went.

Add about 10–15% extra to your estimated costs for each category. That might sound like overkill, but it’s a lot more fun to end the trip with money left over than to cut back on experiences because you didn’t plan for those sneaky extras. This way, you’re covered for everything from an extra appetizer to an unexpected adventure (and probably both), and as a bonus, you might come home with extra funds to put toward your next trip!

Step 5: Save Money Before the Trip

Now that you’ve got a budget plan, it’s time to actually save some cash for this adventure. Enter: the savings plan. This is where we find ways to cut back on everyday expenses so you can build up that travel fund without feeling like you’re sacrificing your soul—or sanity.

The Savings Plan: First up, take a good look at your daily spending. Where can you cut back? Simple tweaks can make a big difference over time. Start cooking at home more often instead of ordering takeout, or maybe skip the daily latte run and brew your coffee at home. That $5 cup of coffee may not seem like much, but it adds up fast. It’s all about making small changes that still let you enjoy life while stashing away more for your travels.

Set Realistic Goals: Setting a savings goal is key. It gives you something concrete to aim for and keeps you motivated. Break it down into smaller, manageable targets—if you need to save $1,200 in six months, that’s $50 a week. This way, it feels a lot more doable.

To help with this, consider using a budgeting app. Personally, the app You Need a Budget (YNAB) was the game-changer for me. It’s what finally helped me learn how to—and learn to love—budgeting. YNAB connects directly to your bank and credit card accounts and offers a high level of customization for budgeting and long-term savings goals. Plus, it’s great for tracking expenses on the road since you can quickly log expenses and instantly see how much is left in each spending category. There is a monthly cost associated with a YNAB subscription after the free trial month, but it’s helped me save so much money in the long run, it’s well worth the cost in my opinion.

So, start trimming those expenses, set a realistic savings goal, and give YNAB a try (at least for the free trial month) if you want that extra level of control and peace of mind. The more you save now, the more freedom you’ll have to fully enjoy your trip—whether that means splurging on a fancy dinner or picking up a few extra souvenirs along the way.

Step 6: Monitor Spending on the Road

Now that you’ve saved and planned, it’s all about sticking to that budget while you’re actually on the trip. But here’s the trick: track your spending without letting it take over the experience. You don’t want to be obsessively calculating every penny while you’re trying to enjoy that sunset, right?

Track, Don’t Obsess: Keeping an eye on your daily spending helps you stay on budget, but the key is not to let it ruin the moment. At the end of each day, take a quick look at what you spent. This way, you can make adjustments if needed and avoid any unpleasant surprises later. Think of it as a gentle check-in rather than a strict audit.

Tools: And you already know I’m a huge fan of YNAB for this. It’s perfect for tracking expenses on the go because you can log each purchase right in the app and see instantly how much is left in each category. If you’re not using YNAB or another budgeting app, no worries—a simple note on your phone works just fine. The idea is to keep it easy and stress-free so you can focus on enjoying your trip.

Conclusion: Budgeting = Freedom (Really!)

So, here’s the thing: budgeting isn’t about being cheap or limiting yourself. It’s about making the most of your travel experience without the post-trip financial hangover. By setting a realistic budget and tracking it, you’re giving yourself the freedom to enjoy every moment without the stress of wondering if you’ve overspent.

A well-planned budget doesn’t mean less travel; it actually means more. More trips, more adventures, more memories.

Got your own travel budgeting tips or questions I haven’t addressed here? I’d love to hear them—drop them in the comments below!