This post outlines how we went about setting the budget for our 10 month trip and ways for you to adapt this method to your own trips. If you missed my first feature article from the Budgeting Series, go back and read my Budget Intro post.

Here are the steps we took to set the budget:

1. Figure out what your limiting factors are.

A couple of the limiting factors we had were a departure date after my (Jake's) brother's wedding, and we wanted to travel in the "backpacking" style, typically looking for experiences rather than JUST comfort.  In other words, we were not looking for hotels or resorts or other tourist focused amenities, we wanted a richer experience with more of the local culture.  Money is, of course, a concern, but since we had a good amount saved up already, and we are not travelling until our money runs out, this was not the specific limiting factor. We wanted to spend less than $5,250 a month for both of us, our monthly expenditure living in the San Francisco Bay Area in 2014, and found this to be easily do-able with our travel plans and style.  We also wanted at least 6 months' worth of living expenses in the bank for when we return US, a safety net should finding new jobs take a while. Thanks to our planning and budgeting, we will have more than that when we return.

For you to do:

Here is a list of important questions you should answer before moving forward with the budget and trip:

  1. When do you want to leave?
  2. How long do you want to travel?
  3. Where do you want to go?
  4. How much money can you spend?
  5. What level of luxury do you want to travel in?
  6. How much planning do you want to take upon yourself?

If you do not have answers to all of these, go with your first instinct and use that as a starting point. You can always change your answers, so if you are having trouble, just pick what seems right and go with it.

2. Get comfortable with Excel if you are not already.

We have a very detailed excel spreadsheet that we have used to plan both our route and expected expenses.  This is the backbone of our entire trip; it is the master document for everything.  The spreadsheet I use now has had many changes from when I first started and is not very user friendly, but I would consider making a new starter version from the ground up if anyone would find this useful. Leave a comment at the bottom if you are interested or send us an email.

The core of the spreadsheet is contained in the sample shown below:

Excel for Budget
Excel for Budget

My intent is not to go into the details of how to make the spreadsheet, but to explain the core concepts that are the foundation of a good trip budget.  One thing to keep in mind, most budget numbers come back to per person per day as the defining characteristic, this is the most important way to measure your trip on a day to day basis and for budgeting.  BPI (Backpacker Index, see below), Food, Transportation (local), and activities are all to be input as per person per day.  Lodging is per day total, other is per transaction (entry visa fees, etc), and Transportation (regional) is input as per trip total (both flight tickets combined for example).

For you to do:

Set up your own budget spreadsheet, or reach out to me with a comment below or an email if you are interested in having me put together the excel sheet for you to get started.

3. Calculate your rough budget estimate.

I started by filling in the cities we wanted to visit by how long we planned to visit them.  Excel Note: I used a formula to calculate the dates for me so I would not have to change them all every time I changed the number of days in a place.  If there were countries I knew we wanted to visit, but had not done the research to know exactly where to go, I just put in a country with estimated number of days in that country.  That is enough information to get the budget going.

After I input the itinerary in the spreadsheet, I went to  This is a great website designed to help you figure out how much it costs to travel to many countries around the world.  The piece of information you are looking for first is the Backpacker Index number as shown near the top of most of the city pages on the site.  Read about the BPI on their site, here, it explains how they came up with it and what it includes.  I put the city's BPI (or my best guess at a comparable city if the one I wanted was not listed on Price of Travel) in the spreadsheet and then increased it by 50% into the next column.  This adjusted BPI is how I came up with my overall rough budget number.  BPI does not factor in transportation to destinations and I wanted to give some extra room for nicer meals once in a while, and some general breathing room.  This let me know if I was in the ballpark of our $40K original trip budget.  It turns out that the adjusted BPI total was right in line with the estimate of $2,000 per person per day.  Off to a great start!

For you to do:

Calculate your rough estimate using the guidelines above.  The site also has a 3 star hotel index for Europe that you can find here if you wish, or just increase or decrease the adjusted BPI factor to whatever you feel is appropriate.  This is your budget, set it how you see fit!  Once you have your total for the trip compare it to your constraints, does it line up with your expectations? Adjust as necessary, better to be conservative and cut things back if you are unsure, and to build in more cushion into the planning at this stage.  You will most likely want to add more activities or cities as you research your destinations further, and the breathing room you build in now will make that easier to accomplish.

4. Calculate your detailed budget estimate.

After I confirmed that I was at least in the ballpark of my constraints, I went about planning the route with some more detail and figuring out more specific cost estimates.  To start with, I went back to the BPI information on Price of Travel and scrolled down to the section of the page that discusses food in each city.  Food is important for us on the trip so I picked the high end of each meal range and added them up for the meal allowance in the spreadsheet. For example, if there was a range of $3.23 - 7.59 for breakfast, I would use 7 dollars for one meal for breakfast in my budget.  Note: If you read the Europe Retrospective post (here), then you will know we significantly overbudgeted for food in Europe.  I would not change this much as it allows other wiggle room in the budget for overspending in other places or for other activities later in the trip.  Decide how you want to set the food budget based on your own value and intuition. If you are planning to drink often, make sure to take the extra expense into account.

While you are on Price of Travel, take a look at the transportation estimates and input a number you think is appropriate.  For us, most places only had $2-5 per person per day allocated for local transportation.

I would then turn to Airbnb, look up the city and find the city center (the most likely place we would want to stay), find out what the lower end of the price would be for an apartment in the general area I thought we would want to stay in, and input that number multiplied by the number of nights into the spreadsheet.  Of course, if you are doing hostels or hotels primarily, then use or to find this information.

For regional transportation I would usually start with to find out what some good options would be to travel between cities.  I did not use this for flight prices as I found to be a better choice.  Comparing the 2 sites and their travel options, I would pick what I thought was the likely mode of transportation and input this information into the spreadsheet.  Note: do not try to optimize your route here, just use what you have already laid out, make estimates and assumptions if you need to. The goal is to have a starting point so you know that you can do this trip for about this much money.

Finally, check out visa costs and other expenses and input them into the "other" section on the spreadsheet (large activities, such as scuba or treks).

For you to do:

Calculate the detailed estimate of your trip, do not forget your flights to and from your trip.  How does it compare to your constraints?

5. Adjust your budget/itinerary as necessary.

I found that during step 4, I had a number of inefficient, illogical, or especially expensive parts of the trip.  It was time to analyze them and decide if there were more cost effective ways to do those parts of the trip, or if it was just inherently expensive and worth it! If a particular leg of the trip looks illogical/inefficient (going past another city and then backtracking) then I would run a "study" where I would try different routes on a separate excel workbook and see which was the most cost and time effective.  Trying different combinations was a bit time consuming but I knew of no better way.  Depending on how you are getting to a place, the closest in straight lines on a map may not be the most cost or time effective.  Budget carrier flights (like Ryan Air) can lead to more variables as the pricing can be all over the place, but you can also find some great flight deals to make cities happen!

If the leg was particularly expensive I examined why. Often it was due to being an expensive place in general, and whether or not we still wanted to go there was a decision we had to make.  Sometimes we reduced the time we planned to spend there, find cheaper lodging, or try to find other cost savings like deciding to cook more.

For you to do:

Look at your itinerary. It should be obvious what stands out as a leg of your trip that can use some TLC. Start there and find ways to cut the fat from your budget.  Consider lower accommodations or even a longer stay (see my Europe Retrospective post as mentioned above) to save some costs (on a per person per day basis).  If you are spending a lot to get to a city, why not make it worth it by spending longer at a bit less nice of a place if you need the cost savings?

6. Do not forget to account for other trip expenses.

This budget just covers the "during trip" expenses.  In our normal day to day budget before we left, we budgeted for the things we needed that would enable the trip. Some of those things are:

  1. Gear for the trip itself (travel packs, clothing, Steripen, etc)
  2. Vaccines
  3. Travel insurance
  4. Storage fees for our things while travelling
  5. Savings for returning from trip (including how to handle health insurance)
  6. Paying the last of our bills (we were going to have some due up to a month and a half into our trip)

For you to do: Figure out what trip-related expenses that are not included in your "during trip" budget that you'll need to account for, and make sure it will be taken care of.  The last thing you want is to have a surprise in the form of a bill you should have seen coming put a dent in your savings and cause stress on the road.

This is a lot of work, but in our opinion, it is completely worth it!  There was some stress in setting this up, but as soon as you have a good idea of how much this trip is really going to cost you, then it feels like a weight has been lifted off your shoulders.  With luck, you, too, will feel the extra relief of coming in under budget for most cities, like we have, and knowing that you are able to do more things that you want because of it!

Let me know if you have any thoughts on other resources to use to plan or if having a starter spreadsheet to use would be helpful by leaving a comment below!