Budgeting while Backpacking
I've been using for almost two years but I've always struggled on how to budget while on vacation. I've budgeted before while on vacation but this time is a bit more complicated.
Next week me and my friends are going on a three-week trip through Southeast Asia, traveling through 3 different countries with three different currencies.
My current budget is on Euros, so should I make another budget for the entire trip or should I make 3 different budgets for the three different currencies?
Also, any suggestions on how to organize your vacation budget (categories / group categories)?
Any feedback would be extremely helpful!
Do you plan to use the budget for spending guidance while abroad? If not, then don't bother budgeting while on vacation. Record transactions hitting your normal accounts after you return in your normal budget. Use of cash (in whatever currency) while abroad is not tracked (the budget impact occurs at the time of the original withdrawal).
I'd agree with dakinemaui . Don't over complicate things.
I personally don't worry about categorising beyond 'vacation' as I don't really care whether the money was spent on lodging/food/travel etc, it's just the total that matters to me and is it going to be enough to see me through. I tend to start with a specific category for each vacation e.g. ASIA19 but once it's all resolved I move all transactions/budget into a generic vacation category so my budget doesn't get clogged with too many permanent categories. If I put ASIA19 in the memo field it's easy enough to search for that vacation later.
For short trips, I just know how much I have in both £ and the countries currency to see me through and update YNAB when I get back. For a three week trip, I would possibly log in and update a few times while I'm away, maybe once a week or when I changed countries but I wouldn't worry if I didn't. I basically just work on the old school method of I have £x/day (converted) to work with. I do tend to mentally work out how much accommodation and travel are working out at so also know that I have £y to spend on other stuff. I'd be more likely to log in and update if I thought I was getting too close to the wire.
I use a combination of cash, Revolut and a credit card that has good forex rates while travelling. Vacation cash is considered spent in YNAB as soon as its withdrawn/converted and no further analysis required. Credit card spending is recorded in £ as it hits the credit card account. With one credit card it's often a few cents off between when it first hits the card and the final amount but it's close enough for any decision making.
Some people like to separate out hotels, travel, etc in vacation costs but personally this is one area where I don't really care as long as my total vacation cost is within budget. I quite enjoy the break from my stringent budgeting when I'm on holiday. If I ever need that information I can always get it from the payee and memo information that I record later.
One bit of advice, if you're paying by card and they ask whether you want to pay in euros or local currency ALWAYS take local currency. If you've chosen your cards wisely you will always get a better exchange rate that way.
Green Boa I agree with the advice given below but here's what I do when traveling abroad. This differs from what YNAB would recommend, but it avoids the complications of creating a new budget for each kind of currency:
-Don't use multiple categories (e.g., Food, Sightseeing, Activities, Gifts, etc.) and just use a single Vacation category to simplify. While at home I would categorize differently the different components of a night out such as a taxi, restaurant dinner, and movie. However, if I had that same night out on vacation, I would enter all of those transactions into a single Vacation category.
-Don't track cash, other than your initial withdrawals. As soon as you take out money, check your bank app or website to see the conversion rate used. For example, 5000 Thai baht = 150 Euros right now, so do a transfer in YNAB (in Euros) and put in the note section what the baht equivalent is. Then, so that you don't need to track each and every little cash purchase you make, just make a single new transaction equal to 150 Euros in cash, and for payee, put something like Misc. Vacation. If you want, you can make notes in the transaction each time you buy something (for example, if you are sharing costs with a travel mate and need to keep track of who pays for what), but if there's no reason for this, just skip and simplify.
-For purchases made with credit cards, do a quick estimated conversion in your head or with a calculator on your phone, and enter the transaction in YNAB in Euros, as opposed to bahts. For example, if you have dinner for 1000 baht and charge it on your card, enter in the transaction as (an estimated) 30 Euros, and put in the note section what the actual baht amount is. This will keep you with a fairly accurate running total of your Vacation budget category. Then, every few days or at least once a week, do a quick check of your credit card statement online and see what the actual charged amounts are. Perhaps that 30 Euro estimated charge is really 30.79 Euro... in that case go back to the transaction and simply change the amount.
Have a fun trip!
Green Boa said:
I actually prefer to know where I'm spending my money so thats I can better organize and budget fro future trips.
This can be tricky though. What you spend backpacking through SE Asia will have pretty much no relevance in planning a vacation in the Canary Islands. Whereas every year (since 1995) I got to the same beach with the same friends. And we've been renting the same house for about 8 years. So it makes sense for me to look back and say oh in 2019 we did hardly any in-house cooking and went out lots and lots and spent this, but in 2018, we had 4 house dinners and spent this. (We've been eating out more and more over the years because while there are certain things we love about the house which makes it worth renting year after year, the kitchen is worse every year in terms of what works, what pots and pans are provided or have disappeared, etc).