How to set up a travel budget in advance and save up for it

planning a travel budget

How many times do you just book your air tickets, pack your bags, and then fly off for the holidays without thinking how much the whole trip will cost?

And that made you end up overspending, blowing your budget, and then coming back feeling regretful and guilty?

Well, this time around, let’s be nicer to our paychecks with better planning. Setting up a good budget in advance is important to not deal with the money stress after.

So listen up… Or rather, read up.

Understanding travel budgeting

If you always end up overspending on holidays, it’s time to get serious about budgeting. A good travel budget can help you save up and avoid nasty financial shocks when you get back.

  • Transportation

One of the biggest costs for trips. For budget airlines, book at least 4 to 6 weeks in advance or whenever promotion knocks on your door. For train or bus, book 2 to 4 weeks ahead. If driving or renting a car, factor in petrol, tolls, and parking fees.

  • Accommodation

Aim for mid-range hotels or Airbnbs, booking 4 to 6 weeks ahead. If you want to save more and don’t mind sharing spaces, consider hostels, couchsurfing, or homestays. Camping is also a cheap option if you like the outdoors.

  • Meals

Eating out thrice a day can destroy any budget. If you have access to a kitchen, buy some groceries and DIY meals yourself. Or opt for street food, local kopitiam, or casual eateries over fancy restaurants. If dining out is a top choice, go for set meals, buffets, or happy hour promotions if any.

  • Activities

Save on sightseeing by walking around, and visiting free museums and attractions. Limit paid activities to 2 to 3 per trip. Buy bundled or discounted passes online in advance can help save you money rather than buying over the counter.


View this post on Instagram


A post shared by Klook Singapore (@klooksg)

Steps to set up a travel budget in advance

To enjoy your holiday without worrying about $$$, you need to plan your budget. The earlier you start, the more you can save. Here are some steps to set up a solid travel budget before your trip:

  • Research the cost of your destination

Check websites like TripAdvisor to see how much things cost at your destination. Find out average prices for meals, transport, hotels, activities, etc. The more you know, the more accurate your budget will be.

  • Estimate your travel expenses

Break down your total trip cost into categories—transportation, accommodation, meals, etc. Budget a realistic amount for each category based on your research. Don’t forget to include extras like souvenirs you would like to bring back to your favorite people!

  • Account for unexpected costs

Anything that can go wrong will go wrong. So be prepared for surprises like flight delays, medical emergencies, or if you suay, even theft. Add about 10 to 15% of your total budget as a contingency fund. Better to be safe than sorry.

  • Create a daily budget

Once you have your total budget, divide it by the number of days in your trip. This gives you a daily budget to work with. Try not to overspend on any given day so you have enough for your whole holiday. Track your daily expenses on an app or Excel sheet to make sure you stay within budget.


View this post on Instagram


A post shared by TravelSpend App (@travelspendapp)

Strategies to save up for your travel budget

To set up your travel budget and actually save enough for it, you gotta put in some effort. If not, when the time comes to book everything, sure panic. Here are some strategies to make saving up possible:

  • Set a savings goal

Once you know how much your trip will cost based on where you want to go and for how long, break it down into a monthly savings target. For instance, if going to Korea for a week will be $1,500, aim to save $125 a month (across 12 months). Put this goal somewhere you will see it often, like on your desk or your phone as a wallpaper. This will motivate you to stay on track.

  • Include in your budget

Treat your travel fund like any other expense in your budget. If you usually save $200 a month, add your $125 travel fund contribution to that. So you will transfer $325 in total to your savings account each month. Make it automatic if possible, so it won’t slip your mind.

  • Spend less on other stuff

Look for expenses you can reduce or eliminate so you can allocate more to your travel fund. Things like eating at home more, hopping onto fewer Grab/taxi rides or canceling unused streaming services. Even saving $50 to $100 more each month will help you reach your goal faster.

  • Make more money

If it makes sense for your soul and schedule, consider a side gig to make extra cash for your trip—sell unwanted items, pick up weekend event jobs, teach tuition, etc. Put all this “additional income” directly into your travel fund. Every little bit helps, right?

So now you know how to set up a travel budget and save up for your holiday, do it. Trust us, you will thank yourself when you come back from your trip without going broke. Setting a budget in advance helps you focus on the essentials during your holiday instead of worrying about how much you’re spending each day. And saving up extra for your trip means you have more spare cash to do fun stuff when you’re there! If you start planning and saving up early, who knows, you might even be able to afford some added luxury while vacationing.


You Can Afford to Travel Cheap in 2023!

Believe it or not, you can travel from one country to another on a tight budget.

Learning how to travel within your budget is about taking advantage of useful websites and using different techniques that save you money. To help you enjoy your vacation, here are some ways to stretch your dollar when you travel.


Coming up with a plan will help you maximize your budget, wherever you go. You do not have to be immensely strict with the day-to-day budget. However, you have to know how long you will be spending in each city or country, how much you can shell out, and how you will be able to get there. Leaving less to chance means fewer unexpected fees and last-minute bookings.


Some places are usually much cheaper than others. Start by researching which places are doable to visit within your budget. Maybe it’s somewhere within Asia or somewhere that is easy to get to. You can also search for countries that would give you excellent value because of their exchange rate.


Big cities and tourist spots such as the Pyramids of Giza or Santorini are often more expensive than lesser-known destinations. Even within your destination, avoid restaurants on the main strip and try to eat something from the sidewalk. Seek help from the locals as they can give valuable advice.


The best way to save money while in a different country is to cook your own meals. Whenever possible, you can spend a week’s worth of groceries and cook hearty meals with your partner or kids. Imagine how much you will save if you skip on restaurants when you travel to expensive destinations like Iceland and Norway.

Image Credits:

Pro Tip: You can save even more money by booking your flights using a VPN, switching the incognito mode, or after deleting your cookies.


Trade lavish hotel suites for rooms in hostels. Sharing a room divides the costs between you and your friends or family. Moreover, having communal areas will allow you to meet more people. Websites such as CouchSurfing and Airbnb provide an inexpensive option for travelers. Your host can be your gateway to insider-tips for the best eateries and tourist attractions in that neighborhood.


It goes without saying that booking in advance is usually cheaper than last-minute bookings. Prices increase, the closer you get to your departure date. Accommodation, air fares, and activities can have deals and early bird rates.


Buses and trains cost less than travelling everywhere by cabs. A journey overnight on a train also means that you have one less night in a hotel or hostel to pay for. Transportation passes such as Eurail Pass (Europe) and JR Pass (Japan) can help you save money during your travel. If you are travelling around the area for a while, passes such as this can be significantly more inexpensive than just booking individual trips.


One of the most valuable tips for travelling on a budget is to take only what you need. If you forget something, it could cost more money to buy that essential missing item. So, list down what you need and review your baggage list. Pack light whenever possible because additional baggage can cost you more. For instance, Singapore Airlines can charge you anywhere between S$6 to S$225 for additional baggage.  Do you want to pay for that?

Sources: 1 & 2