I think we can all agree that for most people budgeting is a great life skill. It’s about knowing what you have and prioritizing what you value.
Traveling breaks down budgeting, which can seem complex and confusing, to its simplest form: a daily budget. Sticking to a yearly budget can be tough. It’s hard to estimate what you will spend in a year when you’re just getting started. But on the road, it’s easier to foresee the basic expenses of life and patterns start to emerge. In a daily budget you can parse your expenses and reap your savings on a daily basis.
As your trip begins, start writing down everything you spend. Every single penny. You have a baseline budget: say $30/day in Thailand. Some days you lounge on the beach and you spend $20. Other days you pay entrance fees to Wat Pho and take a bunch of water taxis and you spend $35. At the end of every day you reconcile the budget. Oooh today I was $10 under budget! Let it add up and save for a splurge.
This little process of paying attention to spending and rewarding yourself for saving sets up a great pattern that has real benefits at home as well.
When you get home take a crack at a monthly budget.
Start by writing down your fixed expenses: anything that is a set amount that you pay every month. This usually includes rent/mortgage, loan payments, insurance, debt payoff, utilities.
Next write down your variable expenses. This includes things like groceries, gas, entertainment and miscellaneous purchases. Estimate on the high end. This will only be an estimate to start but with practice you’ll be surprised how patterns emerge and it becomes much easier to predict your spending.
Now write down your monthly income and outstanding credit card debt.
Does your income exceed your expenses? I hope so. Otherwise you need to start looking at where you can cut expenses. Create a savings goal. Maybe 10% per month. Then at the end of the month see how you did. Make saving a concrete goal that you can assess rather than a looming specter of guilt. You can do it.
Now take (some of) that savings and travel the world. Because you’re in control and you can!
Here are some pages from my budget notebook from my first trip. Notebook was unfortunately soaked during Songkran, Thai water festival.
And here’s a sample Yearly Budget spreadsheet to get you started: