Budgeting your backpacking Adventure (3 Steps)
If you just want to download my Excel planning template, click here.
Now that you now how to create a route for your upcoming adventure, you must do the financial planning. This guide is more specifically for backpacking trips because I will explain everything with the example of my South America backpacking trip. Budgeting strategies for other kinds of trips, like motorbiking, cycling and hiking will be posted in the future.
Step 1: Understanding your Expenses
Your trip will consist of the following cost positions, and I will explain you how to determine each of them
- Travel Insurance
- Flights
- Overland Transportation
- Accommodation
- Food
- Activities
- Public Transport & Taxis
- Souvenirs
- SIM Cards
- Laundry
- 5 – 10 % Buffer
Travel Insurance
Travel insurance is very important and a non-negotiable part of your planning. In my case I always choose my national health insurance and book a travel version for the time abroad but you’re free to choose any company you prefer. There are plenty other blogs that have detailed explanations and suggestions on travel insurance, which is why I will not go too deep in this topic.
Example
In my case health insurance cost me 1.55 € per day and I pay 54 € per year for a travel cancellation insurance.
Flights
This one is tiring and barely predictable. The more flexibility you have, the less you will pay for your flights. I had the flexibility to choose my flight dates within a stretch of about a week. In my opinion the best tool to look up flights is momondo.com, because you can enter multiple airports for both outbound and return flights and enter an entire week as possible dates. Combining three departure with three arrival airports over each day of a week for both outbound and return flight gives you 441 possible combinations of airports and dates. Good chances for a good deal, huh?
Example
So, what happened to me is that flying to Quito in Ecuador as I initially planned was way more expensive than flying to Bogota in Colombia. I could save a few hundred euros and instead use the money for a few extra days in Colombia and travel overland to Quito. This is the reason I added these 10 days in Colombia in my itinerary. Since I was constrained by budget and duration, exploring all of Colombia was not possible, but this little extra is! As you see, your itinerary can even change after you’ve already planned all the route, so be flexible! In my case I paid 1075 € in total for my flights from Dresden, Germany to Bogota, Colombia and from Santa Cruz de la Sierra, Bolivia back to Dresden. And lucky me, I had a 6 AM to 7 PM layover in Panama City, so I would be able to visit the Panama Canal as well!
Since you don’t book your flights at this stage of planning yet and prices change rapidly, enter an estimate in your spreadsheet, according to the prices you were able to find.
Overland Transportation
Prices for overland transportation vary widely on each continent. In Europe, North America and many other countries you can look up prices on the internet by looking up ticket prices on the website of the train / bus company. To find out which operators exist on your route you can use rome2rio.com.
Example
To stick to my example of South America, where looking up prices online is not always possible, I can give you the following numbers, that are very reliable, because they are directly derived from my well-documented expenses on the trip:
| Country | Average Bus Fare |
|---|---|
| Colombia | 2.18 € / h |
| Ecuador | 2.39 € / h |
| Peru | 2.81 € / h |
| Bolivia | 1.46 € / h |
Please be aware, however, that these prices are according to the travel time in Google Maps, because the 1.5 factor for travel time estimation I mentioned in the last post is not reliable for price estimation. Peru has the most expensive transportation per hour because I was using Premium Buses with 180° Seats (They’re worth the extra pay), which weren’t available in the other countries. Taking the normal buses you’d end up with similar transportation costs like Colombia. As for planning, I simply assumed a rate of 2,20 €/h for all the countries.
Accommodation
Budgeting your accommodation expenses is quite easy. Simply go to hostelworld.com or booking.com and look up the average prices for the type of accommodation you are looking for. A good estimate for the countries I’ve visited in South America is around 12 € / night in a dorm and around 25 € / night in a private room. Surely, you can sleep cheaper, there are loads of opportunities for 8 € / night, but I prefer to give a rather conservative estimate, and also I`m the type of traveler that is willing to spend a few euros more and have increased comfort.
Example
Overall, I’ve spent 1007 € for 77 nights of accommodation, which comes down to an average of 13 € / night. The reason why 23 nights are missing is because you have to subtract my overnight bus journeys and the few times I took a tour and accommodation was included or I was camping. I wouldn’t recommend subtracting your overnight rides and tours beforehand. Remember, things change during your trip, and you want to calculate conservatively. Simply take the number of days you’re traveling and multiply it by the average price per night. Done.
Food
Your expenses for food highly depend on your travel style. Every destination I’ll be blogging about will contain information on expected prices, but I haven’t travelled the entire world (yet). However, other bloggers have good information as well, where you can look up average food prices. No matter where you are, you can save a LOT of money by cooking meals yourself.
Example
For the countries Colombia, Ecuador, Peru and Bolivia I spent an average of 11 € / day on food but planned with 10 € / day. I was mostly eating out and barely cooked meals myself. However, when eating out I was using the almuerzos offers frequently. Having lunch in a local restaurant can be very filling and cheap. Usually you get a soup, main course and drink (sometimes even a desert) for just 2 – 3 €, which is simply unbeatable value! I couldn’t even finish the meals very often, because it was way too much.
Activities
Having planned your trip, you are surely aware of most activities you want to engage in. Often you can find prices on activities on the websites of the operators. However, please, please, please, do me a favor and don’t book stuff on websites like viator.com or getyourguide.com because the offers you find there are dramatically more expensive than booking a tour on-site or getting in direct contact with the tour operators. Additionally, you can often bargain the prices, making it even cheaper. If you are flexible like me, just look up Google Reviews of tour operators, find a reputable one and show up in their office. Often, they can offer you a tour right the next day, if it’s not something that is rarely booked. To find out about prices get in contact with the operators through WhatsApp, Instagram or Facebook and you will be able to get reliable information. If your planned activity is of that “rarely booked” kind, like the Huayhuash Trek in Peru, you can also ask for the possible dates and conditions at the same time.
Example
When I was doing a 5-day Amazon Rainforest Tour I paid on-site 350 € and joined the tour even the same day, just a few hours after I paid. A few tourists I’ve met, who were doing just a 3-day tour and booked it in advance on getyourguide.com paid 600€ and we had the exact same tour, until they left. The difference is really remarkable. In total I’ve spent 1479 € for activities during my 100 days in South America and I did loads of them. To see a structured breakdown of the cost I will do a separate post.
Public Transport & Taxis
This is mainly relevant when you visit cities or other places where not everything is reachable by walk. As always, check out typical prices by reading my blog or other blogs. Check whether public transportation is available in the cities you travel to and if yes, take the fares for a day-ticket as your reference. Otherwise estimate your expenses for taxis. If the country of your desire has Uber, you can look up the prices in Uber very easily.
Example
In South America public transportation is barely available and taxis are quite cheap. Per day I spent in a city area, I spent around 5 € / day for taxis.
Souvenirs
This is an estimation you can only do by yourself. I always account 50 € for presents for my loved ones and do a roundabout estimate on things I want to buy for myself which varies from trip to trip.
Example
I’ve spent 53 € for gifts and 152 € on things I got for myself during my time in South America
SIM Cards & Laundry
Having a local SIM card is often vital and you should account for costs of around 15 € / month which is enough for most places in the world. Buying an international SIM card in advance, can be comfortable, but is very expensive and thus not recommendable for budget traveling.
Laundry prices can vary drastically even within a country. To make it easy, 10 € / month is enough to account for most places in the world, if you’re not visiting expensive countries (check out my map in this post to see which countries I mean). You can avoid these costs entirely though, by just throwing all your clothes into a drybag and filling it with water and detergent. Shake that bag up thoroughly and your laundry is done. Obviously, its greater effort because you also have to dry that stuff somewhere, but it’s a good solution if you want to increase your flexibility and save some money.
Example
I’ve spent 37 € on local SIM Cards and 26 € for laundry during my 100 days in South America.
Drinks
This kind of expense doesn’t affect everyone, which is why it doesn’t appear in the list above. But if you like to party once in a while or have a few beers at a bar with fellow travelers, just like me, you might want to consider a budget for this as well.
Example
Personally, I estimated an average of 2 € / day for drinks, which for 100 days means a budget of 200 €. However, eventually I spent 300 €. Disclaimer: I wasn’t drinking everyday for 2 €, but rather every once in a while for 10 – 20 € by going clubbing or whatever. Cheers
The most important thing: 5 – 10 % buffer!
As you see, all these costs are estimates and they highly depend on where you are travelling, what your travel style eventually will look like and many more factors. Only a fool would assume he can predict every penny he’ll spend. Hence, you need to account for a buffer. If you did a conservative approach (like always rounding up prices) and you considered all the points I’ve mentioned in this post a 5 % buffer will be alright. If your financial plan looks rather skinny, take 10 % buffer. And there you are, you determined your budget!
Finally, even with the buffer, be sure to have another good bunch of money available during your time abroad, because emergencies can always happen, and you don’t want to end up with a situation where you can’t help yourself because you solely relied on your budget!
Step 2: Creating a Financial Plan
What I do is a spreadsheet that contains my travel route as well as the estimated costs for each country I visit. After filling up the spreadsheet it looks something like this:
This is my real initial travel plan for Ecuador. Don’t take the content as a reference where to travel to, because eventually I didn’t travel precisely this route, had slightly different expenses and have a lot of lessons learned, which I will share in my Ecuador post. This is just an example. The good thing about this layout is that from your travel route you can directly see how many days you’ll spend in the country and which activities you have planned for and thus can derive your costs per country quickly.
After you repeated this procedure for each country you will travel to, you need to make an overall financial plan that summarizes all the data you gathered. For this I created an excel template that you can use. Download it here. In the upper part it looks like this:
Only enter data where it says Enter manually, the rest will be automatically calculated by the template! In the lower part your budget will finally be calculated. This is a powerful template which you can customize very easily for any trip. The calculated preliminary budget fitted nearly perfectly my actual costs, so that I didn’t even need the buffer, though the distribution of costs here and there was differently. My total expenses were 6383 € and the total preliminary costs were projected with 6379 €. Pretty neat, huh?
Step 3: Track your Expenses!
Now you might ask yourself, how to keep track of your expenses during your trip (If you didn’t asked yourself that, do it now 😀 ). I would highly recommend using the App TravelSpend. I even got the Premium version where you can create your own categories and own exchange rates, but honestly the free version is absolutely enough. Using it, you will now exactly know how much you spent for what and even get interesting statistics:
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