Budgeting 102

Budgeting 102

Okay, you made it passed the first section.  I am going to quickly recap on what I said in Budgeting 101.  I mentioned that in my experience, the biggest three areas of budgeting are:

1.) Accommodation

2.) Food

3.) Transportation

Outside of these three things, I am going to go a step further.  Let us pretend that you are on the road and looking to keep your budget in check.  I have compiled two sub-lists, as we can call them, relating to the major three budgeting categories.  I will also introduce the less major fourth category.

First off, the fourth category of budgeting is what we will call miscellaneous.  In miscellaneous, as you might guess, all of the things that do not fit into one of the other three categories are placed.  These include things like gifts, museum fees, petro (gas), et cetera.

Here is a breakdown of the incurred costs on your trip:

Large costs (Obvious): Planes, trains, buses, accommodation

These large costs will account for a large percentage of your budget, but for that reason I believe you are going to pay a lot of attention to them.  You are probably going to over-monitor these costs, while forgetting about the less obvious costs.

Small Costs (Sleepers):  Museums, food, alcohol, tobacco, coffee, chocolate, gasoline, taxi, adventures, gifts, and anything else you can conjure up.

To me, these are the costs that really eat people up.  I have referred to these costs as sleepers, because I believe they are.  You will not realize how much you are actually spending on these costs.  Those $8 beers can really add up, and blow that daily budget out of whack.

 

If you are able to pay close attention to these smaller costs, you can really save a bundle in my opinion.

Budgeting Golden Rules

1. Never leave the ‘house’ with more than you are willing to spend.  (This logic is simple, if you do not have it, then you cannot spend it.)
2. Limit yourself in the areas that you know you have trouble.  (Let us say that you enjoy coffee a lot and specifically crave expensive coffee.  Why not use it as a treat once or twice a week instead of a daily affair?)
3. Think ahead. It is the weekend and you want to head out with some of you hostel mates.  Instead of spending the money to purchase 3-5+ drinks at the disco, go to the grocery store buy your drinks, and ‘pregame’ somewhere.  You will save a ton.
4. Know the going rate.  It is important to know what something generally costs for a local individual.  If you know this, then you can use it as a standard for what you are willing to pay for a service or item of equal value.  This can really save you from getting ripped off.
5. Know your exchange rates.  Half of bargaining is being able to translate exchange rates in your head quickly.  You can do this by coming up with a standard price gauge for yourself.  Let us say that the exchange rate is 1.85 to every 1 of your currency, just think 2 to 1.  This will be a good milestone for you to keep in mind.

 

More Links:

Read Bugeting 101 here.

Traveling to Europe this summer?  Check out 5 European cities that you should visit this summer.