For some people, setting a holiday budget is just one more exciting thing to do when planning their next holiday, because it gives them another opportunity to dream about everything they’re going to be spending that money on.
For others, working out a budget and how much money they need to take on holiday is the equivalent of going to the dentist when you know you haven’t been flossing, or stepping on to the scales after a Christmas holiday blow-out.
BUT I think we can all agree that taking the time to work out a budget is better than running out of money half way through your trip and a) making a call home to the folks to borrow some money, or b) being welcomed home by a massive credit card bill.
So, we wanted to help make the process a little easier for you by highlighting some of the things you might need to take into consideration when working out your budget, and giving you some examples to work with. For the purpose of these examples we have looked at some of the key costs associated with a European summer holiday.
First up, you need to figure out what you need to budget for.
Include the big-ticket items, like your flights, accommodation and transport. Then make sure you include your pre-travel costs too like visas, travel insurance and immunisations. Some people try to save by skimping on travel insurance, but to us it’s an essential, and we believe that if you can’t afford travel insurance, you can’t afford to travel. You can read our blog post on why travel insurance is important here.
To work out your rough costs, you will need to know where you’re going (for your flight costs), how long you’ll be away (per night accommodation cost) and how you want to get around (transport costs).
It will also help to know who you will be travelling with, so you know what costs will be yours and what you can share, as well as what kind of holiday you want to have. If you’re a budget traveller and want to hostel-hop your way through Europe, your budget will be very different to the traveller that wants to stay in 5-star all-inclusive luxury hotels.
Let’s take a look at a few examples of different kinds of holidays you could have in Europe and some of the big-ticket costs that need to be budgeted for:
A. A couple holiday in London for 2 weeks in the summer:
TOTAL: AU$9,600 for the couple
B. A backpacker travelling solo through France, Spain, Italy and Greece for a month:
TOTAL: AU$3910 for solo traveller
C. A family of 2 adults and 2 kids under 11 years, cruise and stay in Barcelona during school holidays:
TOTAL: AU$12781 for the family
These costs don’t yet include ancillary expenses such as travel insurance, nor daily expenses like food and drinks, sightseeing, activities and shopping.
Of course, the costing examples above don’t yet include daily expenses like food and drinks, sightseeing, activities and shopping, so you still need to work out how much you can afford to spend per day while you’re on your holiday.
Here it will pay to be somewhat flexible with your holiday budget because you don’t know when an opportunity might come up that you don’t want to miss out on. A good holiday budget will allow you to splurge every now and then, and know where you can tighten up on other things to afford the splurge.
For a middle-of-the-road holiday (so neither budget nor luxury living) we recommend from AU$100 to AU$150 per person, per day, to cover sightseeing, food and drinks, shopping etc. But of course, there are ways to cut down on this cost if you want to budget for less, and of course, many ways to spend much more than this if you can afford it.
To give you a rough idea of what things might cost in Europe, we have done up a comparison table that looks at things from accommodation and sightseeing costs, to the cost of a coffee or beer. If you are planning a European holiday, this might also help you see which countries can be more expensive than others.
Please click here to view the Cost Comparison Table in a separate window. If you are on mobile or a tablet, rotate your device to landscape mode.
To work out these costs it will again help to know how many people you are travelling with, and what your personal costs versus shared costs are, and what kind of holiday you can afford.
It will also help to know exactly what is included in the things you have already booked or paid for. For example – does your hotel include breakfast in the per night cost? If it does, then that is one less thing you need to budget for. Or does your accommodation have kitchen facilities so you can cook for some meals and not need to eat out every day?
You can also look for other ways to save – for example, can you purchase a public transport pass rather than buying single tickets (as usually this will offer some savings)? Or can you purchase a sightseeing pass that includes entry costs and public transport?
It’s recommended to do some research before you depart regarding what you might want to see and do in each place you visit. You can typically find indicative costs with a quick internet search. Just an FYI – sometimes it pays to book things in advance so you know it’s budgeted and paid for, and you don’t miss out. But sometimes you might be able to find a cheaper price when you are in the country.
Don’t forget to factor in your pre-travel costs, like travel insurance, immunisations and visas, and any other ancillary costs you know you’re going to incur once you’re on the ground, such as transfers, tours and tipping.
This not-so-fun topic is almost at an end, so we will just leave you with a few last tips.
It can help to have a pre-agreed cost (pre-agree with yourself, or your travel companions if you’re splitting costs) to avoid arguments and stress while you’re travelling. It can also help you avoid overspending and having to pay off a huge debt when you get back home.
But your budget shouldn’t stop you from having an amazing holiday and prevent you from doing the things you want to do. With some time and research you can work out an affordable per day budget and include the things you really want to do. Once you know how much you need to save to have the kind of holiday you want to have, then you can put steps in place to help you save that amount before you go, and there should be nothing stopping you from enjoying a glass of champagne at the top of the Eiffel Tower, shopping up a storm in Milan, or indulging in all the bratwurst you can handle in Germany!
If you still need help with setting a holiday budget, our FXperts have a handy budgeting tool available in their stores and they will gladly share this with you to help you work it out. You can find your nearest store on our website. Otherwise, we also have this tool available on our website for you to download.
*Flight costs based on search from www.flightcentre.com.au and are indicative costs only, based on prices available on 2 February 2017. ^Accommodation costs are based on an average per night price for budget, moderate or luxury hotels, as indicated in the table. ~Cruise cost is based on search from www.cruiseabout.com.au for a 7 night Western Mediterranean cruise onboard Norwegian Epic, departing Barcelona in September 2017, and is an indicative cost only, based on prices available on 2 February 2017. **Rail Pass cost is based on search from http://www.eurail.com and is an indicative cost only.
COST COMPARISON TABLE: All costs are based on estimated approximate costs from major metropolitan cities in each country. “From” costs indicate costs that start from the indicated price and may be higher than shown. Average prices indicate a typical estimated cost you would pay for the indicated item. Prices may vary from time to time, and in different cities and towns within each country. Cities included are: London, United Kingdom; Rome, Italy; Paris, France; Berlin, Germany; Barcelona, Spain; Athens, Greece; Budapest, Hungary; Prague, Czech Republic; Amsterdam, The Netherlands.
This blog is provided for information only and does not take into consideration your objectives, financial situation or needs. You should consider whether the information and suggestions contained in any blog entry are appropriate for you, having regard to your own objectives, financial situation and needs. While we take reasonable care in providing the blog, we give no warranties or representations that it is complete or accurate, or is appropriate for you. We are not liable for any loss caused, whether due to negligence or otherwise, arising from use of, or reliance on, the information and/or suggestions contained in this blog.