The Rules of Travel Budgeting


A picture of a wishing well in New Mexico recently reminded me there are two types of people: those that wish and those that act.

Which are you?

I continued to think on this image and it led me to the following inspiration.

“Wishing wells are great for those who have a pocket full of pennies.”

“Wishing wells are not great for those who wish to see the world.”

“Wishing cannot make you get on a plane.”

“Wishing cannot make you see a new culture.”

“Only you and the pennies you save will take you on a journey further than any wishing well can.”

As a regular traveler, I have seen wishing wells all over the world. When I return from my travels, I frequently hear people’s desire to travel as masked by the word wish. They hear or read my stories, and then tell me what they WISH. I wish I had the time. I wish I had the money. I wish I didn’t need to work so hard. I wish I could do what you do. I wish I could see the world. Like the wishing well, I’m full of people’s penny wishes.

As it turns out, many of these wishes revolve around the same thing, money. Time, freedom, travel, and a lifestyle of your design are seen as byproducts of money. With enough money we can get out of the rat race of life and live the life we really want to. But, I will never willingly swallow the excuse of money.

We have the highest standard of living in the world, and unparalleled technological automation. If there is one thing we can definitely afford it is leisure time and travel. If I had a penny for every time I heard an excuse rooted in money or a byproduct of money I would be able to afford 50 trips. Why? Because those pennies so frivolously wasted are pennies I’m saving for my next great adventure.

Budgeting For Travel

Budgeting for travel is a rigorous exercise. It takes attention to detail and patience. It may even be frustrating and stressful when you first begin. The saving grace comes when you reach the finish line. When you take your preciously planned trip, a warm cozy feeling wraps around you because in that moment you know, it was all worth it. That’s when you become the person doing instead of the person wishing.

The Rules of Travel Budgeting:

Rule #1: Money Does NOT Create Travel

I’m poor. My tax records reveal I have lived right at (sometimes below) the poverty line. Once, my government job paid me $9/hr for two years. I made $600 a month after taxes. However, don’t for a second feel sorry for me; I was living in Germany. I chose that financial path with full knowledge of what my monthly budget would be.

With that $600 I was able to travel to a new place (often out of country) every single month. In the two years I lived there, I visited, experienced, and learned about more cultures and countries than the average American sees in his lifetime. Surviving solely on my minimal income, I figured out I could budget $300 max for travel each month. Putting that in a financial perspective, I budgeted 1/2 of my earnings for taking adventures. That was my priority, and I knew I could make the other 1/2 stretch to fit my everyday needs.

Everyone’s circumstances are different; but, on average $300 a month would only be about 10% of most people’s income. (Based on a $35,000/yr income) That sounds like nothing, right? So where does $300 typically go to in our lives?

$300 a month = a typical car payment

$300 a month = an energy bill (water, electric, gas, sewage?)

$300 a month = gas for your car

$300 a month = a child’s tuition or loan payment

$300 a month = eating out 6 or 7 times

$300 a month = a cable, Internet, cell phone bill

My first reaction is to immediately find which categories I can reduce or eliminate. Do I really need to eat out 6 times a week? Can I lower my energy bill somehow? Hopefully, you are thinking the same way. If you are, you are on the right track, and pretty soon you will be replacing an unnecessary bill with a $300 a month travel plan.

(If you are wondering what an average trip costs there is a great e-book out there called Travel like a King on a Pauper’s Budget. It will tell you a mid-range cost of travel in the USA from a few days up to a month. It also has great insight for traveling out of the country as well. Resources will help you understand how far your money can stretch for travel, so you know what to expect in your budget.)

Rule #2: You Have to Define Your Top 3 Priorities

My priorities are simply God, Family, travel. They interact with each other and stand as a guide for all other areas of my life. Mine are not yours. Priorities are personal. (except that I just shared mine with you) Sometimes they change, and at other times we want them realigned. The truth is, whatever you make as your top 3 will determine how you live in this world.

For example, the salesman that “lives” to make a buck probably has $$ at the top of his list, whether he admits it or not. The woman who bears 8 kids, stays at home, and home schools “lives” for family. Everyone’s list is a little different, but if you never adjust travel into one of those top 3 spots, you might as well throw your pennies into the wishing well.

If it is not in your top three at the moment but want it to be, prepare for some sacrifice ahead. Realigning priorities can be extremely difficult. You will be forced to break routines, relationships, and even financial stability at times. Society has a funny way of trying to make everyone fit the mold. Breaking away from your already set priorities will break that mold and cause people to question your decisions. If it is truly something you want added to your life, then you must be prepared with tough skin. Answer their questions with truth, but don’t let them weaken your vision and goal of travel. Once you reach the “doing” part, those that criticized will turn into wishers throwing pennies into your well.

Rule #3: Budgeting Makes $ Matter

First, do you know where every penny of your hard earned money ends up? Second, do you know how to budget?

These probably seem like ridiculous questions, but they are important to your travel wishes. Money may not create travel, but money is needed for travel.

A budget is simply keeping track of what you earn and what you make. It doesn’t have to be as complicated as taxes or an accountant’s book keeping. It will simply be filled with your list of priorities, the things in life you have no qualms about spending money on. It will also be filled with unnecessary expenses. These are the ones that will possibly be manipulated later on to make room for your travel expenses.

The process of budgeting is tedious. A penny here, a dollar there may seem like nothing. However, when you begin to track even little expenditures money piles up and soon my questions don’t sound so ridiculous. Like we discovered above, $300 goes quickly into everyday facets of life. Being aware of where your money is going is a huge step and why writing up a budget is necessary.

Rule #4: Act don’t Wish

Grab a pen, paper, ruler, and calculator right now. Don’t know what those are? Grab a computer device with spreadsheet capabilities then.

The first thing you need to do is make two columns. Write “Necessary Expenses” at the top of one and “Extra Expenses” on the other. All of these should be thought out based on those top 3 priorities you defined. The Necessary column will contain things like house payment, car payment, cell bill, insurances, etc. Money that needs to be paid in order for bookies to not come after you. In the Extra column you will write things like entertainment, travel, stocks, bonds etc. Money that does not have a bookie waiting for you.

Try to think of every little thing you spend money on and either categorize it or list it in the appropriate column. Now, next to each expense write down a monthly average. If you don’t know an exact amount, make an educated guess. I typically guess higher to be safe. After you have exhausted your lists take a minute to look them over. Is it what you expected? Are you shocked by any of them? Are you feeling ashamed by any? Really assess your lists.

Now we are ready to budget. On one page or spreadsheet write up your monthly income. For those of you with a salary this will be quick and easy. For others who have multiple jobs or variable income try your best to put down a monthly average. It may be that your monthly average changes, and that is fine as long as you aren’t getting ahead of yourself. Unlike the expense list, if you have to guess, make it a lower average than higher.

Budgeting For Travel

Once you have your income nailed down, it is time to write up a monthly plan, your BUDGET. First, write in your necessary expenses. If they are a set amount you can fill it in for all 12 months. If it is not OR if you want to try and lower such expense write in what the amount is for only the first month. Highlight it or star it in some way to signify that you are making a goal to lower the monthly rate. Do this for all of your “Necessary Expenses.”

At this point, pull out your trusty calculator and do the simple math. Subtract all of your “necessary expenses” from your monthly income. Hopefully, you still have money left over. If not, you might as well throw that paper with all your extra expenses on it away because you have some serious realigning to do. Whatever the amount is you have left will be what you get to divide up the fun with. Compare your first list with this new amount. Can you still afford to spend $300 on eating out 7 times a month? If so, put it down. Decide which categories are the most important to you. Savings? Travel? Entertainment? Those will be put down first, and keep subtracting from there until nothing is left. If you wish to keep them all, you will need to figure out a % for each. Another option is to do a rotating budget. Just like credit cards do with reward points, we can change what categories we want our money to fall into. For example, in November and December more of my money goes towards “gifts” and less towards eating out. It is up to you to make those decisions.

If you are trying to cut back so you have more funds for travel this is the time to write it in. Figure out what you can afford to put aside without your friends, spouse, or children disowning you for being a miser. Writing down the goal will help you remember your spending boundaries. Keeping tract of receipts and spending will make sure you stay on that budget. This will probably be the most tedious part of the whole process. I suggest for the first month entering expenses immediately as they happen. As the days pass you will determine if you need to slow down your spending or if you are right on track. After a while this will become natural and you can wait to tally up at the end of each month.

The final step is to enjoy your savings. Maybe you don’t travel every month, but if you set it aside your budget will reap a beautiful reward in a new exotic place you used to wish you could go to. It will be one of the greatest feelings in the world, and you’ll never leave travel out of your budget again.