How Much Money Do You Need To Go Travelling?

Canadian cash, Image by http://www.flickr.com/photos/spine/214759009

1. What will your core expenses be each day?
2. How long will you be travelling for?
3. Do you intend on working while you travel?
4. Are there laws requiring a minimum amount of available funds for the country you are visiting?
5. What is the exchange rate between your home currency and the country you are visiting?

I’ll exclude questions of money required for airfares simply because this will depend on where you are flying from, to, and how many countries you are visiting en route.

Let’s look at each of these questions in more detail.

1. What will your core expenses be each day?

Your expenditure on each of these core expenses will probably reflect your style, tastes, routine and expectations in your every day lifestyle.

Accommodation: Will you stay in hostel dorms, twin/double, or camp?

Food: Budget for 3 meals a day. Will you cook for your self or always eat out?

Transport: How will you travel around a city? Taxi, public transport and costs of travel between cities.

Activities/Sightseeing: What are the costs of seeing what you want to?

Communication: How often will you use the internet, will you buy a mobile phone or take your own with global roaming to stay in contact

Entertainment: Are you the type to go out every night or happy to stay in?

Russian passport and currency Image from http://www.flickr.com/photos/mamchenkov/146283589

You should be able to research your destination via available guidebooks, online search, accommodation and transport providers to get a fair sense of the relative costs of each of those elements.

For each core element you can then establish a daily average expenditure.

2. How long will you be travelling for?

As a general rule, the shorter your travelling time, the higher your average spend will be. You are there for a short time and a good time so you won’t skimp. Travel for longer and it’s more likely you will pass up that extra drink or expensive restaurant, especially if you have limited funds.

An easy equation therefore is: Time (Days) divided by Funds = Daily Budget

3. Do you intend on working while you travel?

If you don’t, and you intend on travelling for more than a month, naturally you will need more money saved up in advance.

If you intend to work, and have been granted the necessary working holiday visa, then you can top up your savings.

Do some research about the job market and the demand for your skills. If the job market is tight, have some extra money available to hold you over until you get a job - it may take 4 weeks or more even in good times.

If you are applying for a Working Holiday visa to Australia, for example, you will need to have a sufficient amount of funds to support yourself. “A sufficient amount is generally regarded as being a minimum of AUD$5,000 (£pound;2,200), although the amount may vary depending on your length of stay and how much travelling you intend to do. You should also have a return or onward ticket or the funds for a fare to depart Australia if travelling on a one way ticket.” Source: Visa Bureau

American Pingers Photo from http://www.flickr.com/photos/laser2k/2808913373

4. Are there laws requiring a minimum amount of available funds for the country you are visiting?

Many countries require visitors to have minimum funds available. This is to lessen the vulnerability of people to attempting to illegally work to supplement their travelling funds.

Conditions will also depend upon what passport you are travelling on.

To enter most countries there’s a standard condition you will need to meet which is usually worded, “you have enough money to support yourself and live in the [country] without working or needing any help from public funds.”

If you only intended to stay a week then $500 it could be assumed is enough money. But if your intention is 3 months and $500 is all you have then, as expressed above if you were challenged, you would need to show you had sufficiently more funds available.

5. What is the exchange rate between your home currency and the country you are visiting?

Take into account the relative strength or weakness of your home currency compared to the currency of the country you are visiting.

Planning your travels where you can take advantage of the exchange rate will allow you to travel longer and in greater comfort.

You might even feel like a millionaire, literally, by holding millions of devalued currency when your exchange your stronger currency.

Be aware that a positive exchange rate might be offset by a higher cost of living within a country especially when local consumption taxes are factored in.

Your Turn: How much money did you start travelling with?

A Golden Rule: Whatever budget you calculate, add 10% to it to give your self some additional economic freedom.