Backpacking

How to plan your budget for a Backpacking Trip

13th November 2024Erin Buckingham

Travelling on a budget is an art, especially for backpackers who want to see it all without spending it all! Whether you’re a seasoned wanderer or planning your first adventure, budgeting is the key to making the most of your trip while keeping your wallet happy. Here are some tried-and-true budgeting tips (with a few hacks!) to help you hit the road with confidence.

1. Research Must-Do Experiences and Factor Them In

One of the most painful parts of backpacking on a budget is coming across that must-do activity – only to realise it’s wildly out of your budget! Save yourself that heartbreak by researching ahead and factoring in costs for big-ticket items.

For instance, when I was backpacking in Thailand, I just knew I had to do the Khao Sok floating bungalows. By researching ahead, I found out the approximate cost and added it to my budget as a non-negotiable expense. Doing this meant I didn’t have to skip an epic experience because I’d already set aside the funds.

2. Set a Realistic Daily Budget

black calculator near ballpoint pen on white printed paper

Setting a daily budget can make or break your trip’s success. This is a bit of an art form—it’s about finding that sweet spot between not splurging and not skimping too hard.

For example, my boyfriend and I lived pretty comfortably on a £70 per day budget in Thailand. Some days we’d go over a bit, but most days we’d come under. On a lower budget? Southeast Asia is known for being backpacker-friendly, and you can often manage on £20-£30 per day (per person) if you’re careful. Europe? You’re looking at around £50-£70 for the basics (per person).

When setting a daily budget, make sure it includes:

Accommodation (look up average hostel prices!)
Food and drink
Local transport
A little extra for the unexpected

Remember, a daily budget keeps you on track but isn’t a hard and fast rule. Go over on one day? Make up for it with a cheap day or two.

3. Use Budgeting Apps to Stay on Track

Tracking your expenses is key, and a budgeting app is your best friend here. It’s not just about monitoring your money; it’s about spotting patterns and adjusting before you overspend.

Some great budgeting apps for backpackers include:

Trail Wallet: Designed for travellers, Trail Wallet lets you input expenses in different currencies, set a daily budget, and track all your spending. It’s simple, intuitive, and ideal for multi-country trips.
Spendee: This app connects to your bank account and categorises expenses, helping you see exactly where your cash is going. It’s handy if you don’t mind a bit of setup time.
XE Currency: While not a budgeting app, it’s a lifesaver for quick currency conversions. Perfect for when you’re hopping between countries with different currencies. (Or if you have an iPhone with iOS 17 and over, the calculator app has this built in!)

Using a budget app can help you avoid nasty surprises and make it much easier to keep your finances organised while travelling.

4. Take Advantage of Local Food and Public Transport

Food and transport can eat up a good chunk of your daily budget if you’re not careful, so look for local options and avoid tourist traps.

Food: In places like Southeast Asia or South America, street food isn’t just cheaper—it’s often the tastiest option! A bowl of pho in Vietnam or a plate of pad Thai in Thailand costs a fraction of a sit-down restaurant meal. When travelling in pricier countries, consider cooking your own meals. Many hostels have kitchens, so hit up local grocery shops and have a fun night in with other travellers.
Transport: When it comes to getting around, look for local buses, trains, or trams instead of taxis or Ubers. Public transport is often super affordable, and you’ll get a more authentic feel for the area. In some cities, like Mexico City or Bangkok, metro systems are efficient, cheap, and even a bit of an adventure on their own!

5. Build an Emergency Fund (Seriously, Do It!)

When you’re backpacking, surprises are part of the adventure. However, not all surprises are good ones. Flights get cancelled, you might get sick, or maybe you’ll need a bit extra to replace a lost passport. That’s why having an emergency fund is essential (but it doesn’t replace travel insurance!!!).

Set aside at least a few hundred pounds as a safety net, personally for a long backpacking trip (5 months +) I would suggest at least £1000 per person. If you don’t use it, brilliant, but if you do, you’ll be so relieved to have it. I feel like it’s quite common for backpackers on a one-way ticket to keep a “flight home” fund that’s strictly off-limits unless they absolutely need it. This gives peace of mind, especially if you’re travelling in remote areas or countries with limited infrastructure.

AND the bonus of not spending it, means you can splash out if you want to on the way home! Entry to a lounge? Upgrades? A long lay-over at an all-inclusive resort? Go for it!

6. Look for Free or Cheap Things to Do

Free nightly fire show – Chaweng Beach, Koh Samui

You don’t have to spend big to have fun! Many destinations offer free or cheap activities that are just as memorable as the pricey ones.

Museums and historical sites: Many cities have free museum days, and some places—like London—offer free entry to major museums all the time. Do a quick Google search to see if any sites on your list have free admission.
Hiking and nature spots: Nature is the best entertainment money can’t buy! Whether it’s hiking the local trails, beach-hopping, or just exploring city parks, spending time outdoors is usually free. In places like New Zealand or Canada, where outdoor activities are the big attraction, you can save loads by choosing hikes over paid tours.
Walking tours: Many cities offer free walking tours, which are great for learning the lay of the land. These tours operate on a “pay-what-you-wish” basis, so you can decide how much it was worth to you (or how much you have left in the budget).

7. Make Saving Part of Your Travel Prep

One of the best ways to avoid stressing about money while travelling is to start saving in the lead-up. Even small changes can add up fast. Here are a few pre-trip saving tips:

Eat out less: Cook more meals at home, and skip a few pub nights here and there.
Sell unused items: Have a clear-out and sell stuff you don’t need. That old laptop or bike could be worth a few days’ budget on the road.
Cancel unused subscriptions: Streaming services, apps, or gym memberships—pause or cancel anything you won’t be using while you’re away.

By focusing on saving in the months before you go, you’ll free up more funds to actually enjoy your travels.

Backpacking on a budget doesn’t mean missing out on the best parts of travel. By planning ahead, setting realistic goals, and tracking your spending, you can have the time of your life without breaking the bank. Remember, it’s not about how much you spend but how much you experience—so happy trails, and may your travels be as epic as your budget is balanced!