How to Plan a Travel Budget
As experienced travellers and as early retirees bent on travelling more (including over the last few weeks) I’ve learned that the words travel and budget can actually work very well together.
In that spirit, I want to offer up our process today: how to plan a travel budget in hopes this helps you out on your next adventure OR you also share your own travel process with some experiences to help others here too.
Is travel more expensive these days?
Yes.
In fact, some retirees are very reluctant to cut their travel budgets while others are doing that real-time to combat travel-inflation. Travel has gotten more expensive of late.
In this Globe article as an example (subscription), I read some of the following quick wins that some retirees are practicing – some might be obvious:
- Travel less or just front-load your retirement travel – Ms. Simmons (a financial planner) said in the article her clients have adapted to higher costs either by taking big trips only every two or three years, bumping up their travel budget in the first 10 years of retirement and decreasing it later on or taking on part-time work or one-off consulting gigs specifically to cover travel costs.
- Focus on domestic travel – Another planner mentioned some of her retiree clients have opted for domestic travel in the past couple of years, partly to save money and partly because of the trade war with the United States.
- Live it up anyhow / YOLO – Yet another fee-based planner, mentioned it was OK to spend more of late given some of their investment growth in recent years was outpacing their spending. Lucky problem to have if higher travel-inflation does not apply to you…
Is travel really expensive?
It can be.
I know from our own experiences to Europe, South America and other distant lands over the years, costs can add up. Travel requires some sort of financial commitment, read-in: a budget.
I’ve also heard of many folks taking on debt to create their travel experiences. This has never really appealed to me/us. I’ve always preferred to travel with after-tax or spending money in hand and not take-on any debt to pay for experiences near or far away from home. It’s just our comfort-level. We can afford to travel or we can’t.
Your mileage may vary.
What is your travel style?
Before I dive into the planning process for a travel budget, what we do, I also think it’s important to reflect on your travel style. Just like your investing approach may differ from someone else, you likely have a unique approach to travel and experiences to consider when you travel.
Up to retirement, I have previously appreciated shorter (one to two-week) frequent trips – but that’s partly because of workplace commitments. Fitting travel into workplace time away was a necessity.
Now that we’re in retirement, I/we suspect our travel style will change and adjust. Longer trips, less often; a mix of frugality where it makes sense and some luxury experiences we’ve saved for in advance too. Slower mornings when not at home; less rushing to destinations. We should have more time to enjoy, stay and play.
Like any planning process, it starts with goals or objectives.
If you don’t know what’s important to you, and why, you might be spending money on things that don’t add value.
Assuming you have your goals in mind, let’s unpack our big three travel buckets – what we think about for every big trip – and no, these are not costs that are stealing your retirement although if you are still saving and investing for retirement you might want to read this post!
Two expenses stealing your early retirement dreams (that are not coffee)
Where to Find Travel Savings and How to Plan a Travel Budget
We believe just like your day-to-day expenses without travel, you need to continue to get these right when you do travel:
- Transportation.
- Accommodations.
- Food/Dining.
That’s it, three key items and three items in that order!!
Sure, there are other costs when it comes to travel like what you pay for experiences, from exotic zip-lining in the rainforest to the more casual and relaxed museum tours (we’ve done both and everything in between), but unless you get getting there, staying there, and eating there right financially you won’t be able to afford your other experiences anyhow.
Based on our travel experiences, get those three travel budget buckets correct: transportation, accommodation and food costs and you’ll get the most out of every trip.
Smart travel is really about right-sizing one or more of these travel buckets.
Saving some money on one or more of these travel buckets can open up spending in another. Or in some cases, you can do all three wisely and really extend your stays – travel longer, travel farther and get after difference experiences at the same time.
Here is how we plan a travel budget.
1. We Define and Master our Transportation.
Some of our destinations require a car.
Some of our trips require a boat.
(Our ride on Marine Atlantic, June 2026.)
Some of our trips have also required a plane AND a train on the same day.
A big part, arguably the biggest part of our travel budget is about defining where we want to go and how we’re going to get there.
Certainly, flexibility with your destinations is helpful. Picking shoulder seasons or mid-week travel options for a desired location can lower costs – that’s obvious and we’ve done that. In our working years, we couldn’t always do off-season travel but now we’re extremely flexible. I don’t have a job. 🙂 I can run this blog from anywhere in the world.
Essentially, flexibility in dates can be a huge enabler to your travel budget and one we hope to maximize more ourselves.
Leveraging travel rewards or travel points is also helpful.
We also book things well in advance where warranted, and having more time to do more research in advance will be enabler for deal-captures.
Other deals can be had based on seasonal promotions or offers – so we’re watching sales more now that we’re retired. We have seen Black Friday and Boxing Day deals often but couldn’t always make the purchase since we had jobs to focus on – those days are done.
There are also opportunities for localized travel once you get to your destination. Instead of expensive cabs/taxis or renting a car (unless essential for the experience), we’ve taken free shuttles, low-cost subways, trams and local buses or streetcars to get around. Those options have helped us save money here-and-there and enjoy the local experience at the same time.
Essentially, we try and master transportation:
- We use flight aggregators for airline travel.
- We leverage travel reward points.
- We skip the rental car unless we want it/need it.
2. We Optimize our Accommodations.
Once we know where we want to go as part of mastering our transportation, the next big budget ticket item we try and optimize is our accommodations.
Our first recommendation and a reminder to us in fact, is being open to various accommodations experiences.
Our experiences have ranged from luxury wine villas in Europe, from oceanfront condos in Belize to a small, quaint (read-in tiny!!) one-bedroom, shared bath accommodations in some AirBnBs.
Not all accommodations are treated equal!
We have found that mapping out our travel path, and determining what experiences we are willing to have or trade-off is a HUGE part of the travel budget planning. Our research abroad includes understanding the city or town and the amenities of different neighbourhoods. Where possible, we stay in travel-friendly neighbourhoods that are an easy walk to sites and local transit. We prefer to explore on foot and get around like a local where we can.
We also tinker with the hotel-loyalty game in a strategic way and book nights with our preferred hotel chain to increase points for future travel or redeem free nights where that makes sense.
As part of our research, we also enjoy booking accommodations with features we cannot get at home – places with charm or a view: a terraces overlooking a vineyard or direct ocean access.
Nailing accommodations can allow for transportation costs to go higher or vice-versa or at least be more flexible.
In many cases, for longer-stays, we opt for accommodations that have a free breakfast and/or amenities that allow us to cook at least breakfast every day on our own.
To help us optimize accommodations:
- We consider accommodations based on value or unique experiences.
- We use loyalty points or book longer-term stays for discounts.
- We focus on location-location-location.
3. We Navigate Food and Dining.
Enjoying the local culinary delights have been big parts of our foodie-adventures of the past and will be moving forward too I suspect. This includes our current travel adventure…
Eating like a local is fun and there are hidden gems to be discovered.
But dining out every day for every meal, every day, can be very expensive and to be honest we prefer to avoid that.
So, part of our plan whenever we travel, wherever we travel away from home is a slight bias to a few home-cooked meals. B&Bs (Bed & Breakfasts) are great for that – you can optimize accommodations and food at the same time.
As mentioned above, cooking while we travel is more than fine for us and we’ve done it often. Many of our trips in extended-stay locations have included:
- Cooking daily breakfast at home,
- Snacks/light lunch, as to afford and enjoy,
- Dinners out in the evening and downtime from travel.
Cooking while we travel has helped our bodies and wallet. In doing so, we’ve really splurged at times at some fancy meals out like during a wine tour that including a multi-course meal and wine menu lunch in Mendoza, Argentina – arguably the best wine we’ve ever had…
Leveraging our hotel-loyalty game we’ve stayed in hotels that have Club benefits for skyline-view happy hours and buffets as well as breakfasts included.
To avoid getting hangry during the day, we bring snacks. This is not only good for our body (i.e., it can be healthy snacks like fruits and other goods) but it avoids impluse food purchases that can be just-in-time expensive choices not to mention, at times, not enjoyable food!
To help us with food and our choices:
- We eat local or buy local or cook local.
- We consider various accommodations with built-in food.
- We snack, we graze, we consider food choices in advance and avoid too many decisions made on impluse.
And don’t forget the odd happy hour. 🙂
(Our Happy Hour at The Merchant Warehouse, Woody Point, NL.)
That’s our focus – on those three items – but there are other things we do when we travel that cost money but that are not up for debate.
What we don’t cut back on when travelling (or before travelling):
- Travel insurance – cancelling a trip can be time-consuming and expensive and even moreso when tickets or accommodations are not refundable. On top of this, just because our health is good before the trip doesn’t mean it will remain good when travelling. I’ve had to visit one hospital when travelling and thankfully I had insurance to cover all of it.
- Things on your bucket-list or things that add value to your life – what’s the point of planning and trying to enjoy a great tip only to be a Scrooge the entire time while you are there? Yes, travel requires some sort of budget of course but it’s all about balance.
- Good clothing or travel gear – we have good backpacks, we own good shoes, we have good clothing for wind, rain and other weather-related elements. We can’t predict the weather when we travel but we can plan for it and make the most of it while we are away from home.
How to Plan a Travel Budget Summary
We’re far from perfect travelling gurus but like personal finance and investing, we figure if we do the basics right more often than not things should work out in our favour when away from home. That means for us we try and get these three travel buckets right when we do travel:
- Transportation.
- Accommodations.
- Food/Dining.
As we ramp-up our volume of day-trips, multi-week trips and potentially multi-month trips in the coming years, my guess is we’ll try and get these things right more often than not and publish our adventures more here or in video format too for you to enjoy and learn from.
In that spirit, if you have your own plan a travel budget stories to share, please do in a comment to me. Sharing helps everyone learn and pay it forward here. 🙂
Mark
Travel Budget – Pocket Money Only!
The idea came about during our working years in our mid 50’s. Years before that, we took short trips of 1 to 2 weeks, experiencing all the good, the bad and of course the unexpected to varying places we chose for vacationing. The solution to our common way of travelling presented itself to us by one of our older retired friends. He had just lost his wife and was a successful multi-millionaire, living in Prince Edward County. It all started when he invited us to stay in his home instead of renting a cottage on Lake of the Mountain, which we had done for a few years previously on an annual basis. He said why settle for less? You could live in a world-class destination where one of you could commute to work and the other work remotely from home. You could have almost everything you’d ever want 4 seasons out of the year and be living in a place considered to be the number one place to spend your summers in Canada. You’d have it all, just a few steps out from the front door of your home. This has worked for me living here south of Belleville, a favourite wine and eatery destination.
We jumped at his idea and it took a few years to make the transition by choosing where to move to, rearranging our work and selling to move out of the GTA.
That was over 15 years ago and it didn’t take long to meet like-minded individuals in our age group.
Being fully retired now, if we want to travel, we can go and stay with friends in Hawaii, Florida, South America, and places in Europe. When our friends want to spend time in Muskoka for a month or less, we welcome them here. We found this to be the ideal way to travel because everything has been addressed, where we’ll be staying, how to get around, our favourite places and time of year to travel, etc. They host us when we go there and we host them when they come here. These friends in far away places have become like family. A commitment such as “a pocket money” approach like this might not suit everyone. For us it’s the ease of travel, the familiarity and the places we like to travel to, the finer details and most of all the lasting relationships that are made that matter most.
Very interesting and great approach. 🙂
Thanks for sharing those details – certainly having friends who live in different parts of the country or around the world can have great benefits on travel plans and travel costs!
We’ve done inexpensive camping, using points for hotel/air, waiting for cruise/air deals and bonuses, staying with friends/family for a portion of trips, booking hotels with continental breakfast, and Black Friday deals for accommodation. We have time to travel for longer periods now, usually a month at a time. We try to get deals for most of our bookings somewhere in that 30 day trip. One time we did a more last minute booking so paid more for flights and stayed in hotels – we had to eat in restaurants for most meals. Usually we’d pick up fruit and grab a coffee at a cafe and eat an early happy hour dinner (so 2 meals a day). I get tired of eating overly oily salty food so we decided our next trip, we’d stay in apartments (used booking). We usually eat max 1 meal out a day, sometimes none if we were happy at “home”. We didn’t scrimp when we were out, did tours and museums that we wanted to. The cost between Trip 1 vs Trip 2 was literally double. We actually enjoyed the cheaper trip more.
When visiting a new city, we look up “free” tours through Guru Walk or Free Tour – you can tip what you think it’s worth which we generally pay the cost of a standard museum entry. These tours are 2-3 hours and have all been excellent. I highly recommend you check them out if you haven’t before. Even at cruise ports, we’ve done these instead of the standard boring bus trips with a group from the cruiseline (these are too expensive, Viator is a better option). These are my only tips so far!
Great tips…thanks for sharing that.
We hope to ramp up our travel to 4+ weeks abroad in the coming years.
Same, depending on the day, big breakfast, light snacks during the day, healthy dinner. Food is expensive so it’s part of our planning but we cut back on that where that makes sense to our touring.
Well done on the Guru Walk. Would need to try that mnyself. We used Viator in the past while cruising and will use it again too.
Where is the next big trip??
Mark
Still in the works, nothing booked yet. We are spending the summer doing short road trips otherwise staying at home with the garden, family, theatre shows and concerts. It will be a bit last minute as we are spending more time with elderly parents. Where is yours?
Sounds like a great plan…short day-trips in the area is our plan this summer.
Fall overseas to Europe.
Winter looking like Central America for a few weeks.
Other stuff TBD!
Maybe we bump into each other – haha. Europe is in our fall plans too but nothing solid yet. In the winter we usually do a week in December and another week sometime Jan-Mar on a beach somewhere in the Caribbean. I need to branch out to Central America – I’ve always wanted to go to Panama and Costa Rica. I spend as much time planning these trips as going to them, it’s a full time job during retirement! 🙂
Possible! Costa Rica is nice, been a few times and will go back eventually.
Would like to visit Panama in the coming years as well, maybe in 2028 for the winter for a few weeks. Thinking Bocas Del Toro area but we’ll see.
Our experience
Hotels are better than Airbnb
Travel light. Only carry on and personal item. Better only a personal item ( my way)
Take minimum clothing.
Use local buses/ trains in/out of airport
Always eat far from tourist places. No English menu. Take advantage of fix menus
When selecting a hotel a win/ win location is near a supermarket and local transportation . Ideal with a fridge ( very difficult in Europe)
Do not pay for bank fees. Have a CC with no foreign fees or use EQ Bank card, Revolut or Wise
Remember that outside USA and Canada you can avoid tipping
Research on YouTube the places that you would like to see: ” Things to do in BlaBla”
I agree with all of these points but I require the hotel to have A/C, elevator, minimal stairs. While I love the ambiance of B&Bs, they do not usuallly have A/C and have stairs to navigate with luggage. These items are included in my budget. I look for small supermarkets that have a good selection of take out foods to reduce restaurant costs. The EQ bank card has worked wonderfully for me and not been refused, except when I rent a car (seldomly). I research extensively to prioritize where I want to spend my time in my adventures. One other non financial thing I do is work on my walking abilities before my trip to reduce aches and pains while away and I love to walk in the places I visit.
For sure, carry on and personal bag only. There are always laundromats at reasonable prices.
Good additions.
Ideal to travel light but sometimes very hard – we do look for laundry/free laundry for most of our stays over 2+ weeks.
Yes on the fridge but most B&Bs in Europe and abroad have those now…unless they are more like hostels.
A new fee/FX credit card is wise. We have one / use one and likely always will.
Cheers,
Mark
We’re at the point in our lives where the kids are all grown up and moved out so we are in the position to travel a lot, and we do. After adding up a few trips and being honest about including everything, we’ve just settled at $1k/day average. That sounds like a lot, but including the big three that you talk about, and then the extras like kennel boarding for our fur babies, airport parking, excursions, concert tickets, etc, $1000/day seems to be our average. Sometimes less, sometimes a bit more.
Not unrealistic to be spending $1k per day on a good trip per couple.
Think of all-inclusives (decent ones), you’re paying $7k+ for a week for the big-three.
Boarding / kennels / care for any fur babies can add up costs too for sure! We’ve been there with our pets but we lost both of our cats in the last couple of years (which was very hard on us) but we have fond memories of them and loved them dearly.
I appreciate your contribution here Ross.
Mark