Planning finances for a trip

Traveling anywhere can be very exciting. A lot of the excitement is often experienced before a trip, during the planning stages. With the multitude of resources available today, planning has become an important part of the whole experience. While choice of accommodation, transportation, food and activities receives most of our attention, one of the most critical parts of planning is perhaps the finance! Unless you have a limitless budget, it is very important to plan the costs in order to stay within budget and avoid unpleasant surprises later on. Here is a list of various expenses which you will incur when traveling. Of course, there could be minor tweaks to this list depending on the location of travel and personal situations. But, you will more or less incur these expenses whenever you travel. This list is intended to help you estimate how much your travel is going to cost you in total.

1) Flights

boarding pass

Perhaps the biggest expense of your trip or one of the biggest, depending on how far/remote you are traveling. These costs are per person. So depending on the number of people traveling, the cost goes up. It is best to book flights early (more than 3 months before travel) or at the very last minute (last minute deals can potentially be risky and uncertain). Websites like Skyscanner, Google Flights and Kayak are good to get a feel of pricing cycles.

 

2) Visa

visa stamp

If the country you are visiting requires you to obtain a visa, then you will end up spending some amount of money obtaining that travel document. This amount can be eye-popping or very nominal, depending on the destination country’s visa policy. Various components of the visa expense are: a visa fee (could be per person, or per family), a processing fee, and the money which you spend preparing/gathering all documents for the visa application. If you hire an agent to do the visa process for you, then the agent will also charge a fee. My advice is to do the visa process yourself and save some money for something fun during the actual trip. If you hold a US/EU passport, then count yourself lucky as you probably do not need a visa for a whole host of countries.

 

3) Accommodation

hotel accommodation

This is a major chunk of the total trip expense. The amount for this expense depends upon the number of rooms you are booking and the number of nights that you are planning to stay. Once you select an accommodation, multiply the per night rate with the number of nights you plan to stay. If you plan to visit multiple cities/towns, then add up the room rate expenses for every night at all these locations. It follows that you should choose your accommodation wisely to mange your budget.

 

4) Food

food

Normally, 3 meals are accounted for each person every day. These are breakfast, lunch and dinner. You can find out about cost of meals by looking at various menus on Zomato or on official websites of restaurants. Breakfast is sometimes included with your accommodation. But at other times, you have to make arrangements for breakfast yourself. So check with your accommodation whether breakfast is included in your stay or not. Otherwise, you need to budget for 3 meals a day per person.

 

5) Local Travel

colourful rickshaw

Catching a taxi, bus or subway from the airport to the city? Or perhaps you need to hire a cab for a day trip. If you are in a new country/city/town, chances are that you will step out of your hotel and explore famous local spots. Local transportation costs money and this needs to be accounted for in your expenses. Public transport like bus, subway and trams tend to be cheaper, while a private taxi can be very expensive in certain countries. Your research on forums and blogs will give you an idea of how much local transport will cost you. This expense is most likely going to be a daily expense, depending on how many places you plan to visit every day during your trip.

 

6) Activities

sky diving dubai

When in a new place, you will perhaps visit a historic monument, go on an off road adventure in a 4X4, skydive or sail on a beautiful lake. All these are activities or experiences, on which you spend money in order to buy entry tickets, hire guides, rent some equipment or safety gear, etc. You need to figure out which activities you want to go for, and then account for the expenses of those memorable experiences. This can be a significant amount or a nominal amount depending on the type of activities that you choose. The more the number of people in your travel group, the higher the activity expenses.

 

7) Car Rental

car rental

Whether you like taking road trips on scenic roads or simply have the convenience of personal transport, rental cars/bikes can be a big expense in case you plan on renting one. So take into account this expense, and also the added expense of drivers insurance, as it is illegal in most countries to drive without insurance. If renting a vehicle, it is often cheaper to rent it from a local store than an international chain.

 

8) Petrol/Gas

petrol gas

Rental vehicles will require petrol/gas to run. First, figure out roughly how many kms/miles you will drive. Next, find out an approximate fuel economy for the vehicle that you plan to rent. This will give you an idea of how many liters/gallons of gas you will consume. Then, just google the local fuel rates to get a rough ball park amount for fuel expense. This may sound like over planning, but you won’t regret it.

 

9) Shopping

shopping venice

Traveling almost certainly involves shopping. Even if you are not a shopaholic, you will end up buying at least a souvenir. Almost every traveler will do some kind of shopping, big or small, while visiting a new place. The amount of shopping varies from person to person, but this is an inevitable part of the trip expense. So budget some amount for this part of the trip.

 

10) Credit/Debit Card Fees

credit cards

If traveling abroad, watch out for this one. Banks in most countries love charging a 2% to 3% fee on EVERY transaction made in a foreign country. Even ATM withdrawals are charged a fixed fee by most banks. Often times, a flat fee is charged IN ADDITION to the percentage fee mentioned above. Check with your bank to know what you will have to fork out in order to have the convenience of using your card abroad, as this will be part of your trip expense. Also think about how you will access money during your trip. Will it be half cash and half cards? Are you planning to take travelers cheques which can then be encashed? A well though out combination of these options can reduce your total trip expense and offer you convenience in accessing money while in a foreign environment. Lastly, call up your credit card company or bank before you go on your trip and inform them about the country and the dates that you will be traveling. Otherwise, they might block your card suspecting a fraud transaction!

 

11) Miscellaneous

Lastly, I like to set aside about 5% of total trip expense as miscellaneous expenses or a safety buffer. These could be unforeseen or unexpected expenses such as fees for excess/heavy luggauge, additional last minute shopping, buying medicine during a health emergency, visiting a grocery store for some late night munching, etc. If all goes as plan during your trip, then you will not need any miscellaneous expense money. But if you do face an emergency, then you will be happy that you packed in some extra cash.

 

While planning for a trip is good, one should not go overboard and over-plan as things do not always go as planned. After all, travel is meant to be an eye-opener, a unique and spontaneous experience. However, it is always a good habit to plan your finances, as it will allow you to get the most out of your trip.

These are the most common and frequently occurring expenses that I came across during my travels. Are there any other expenses in your mind that should be included?

 

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