How We Budget Monthly to Afford Travel

November 2021

I talk about budgeting for travel a lot. But, I’m really just talking about budgeting. Because if we don’t have budgeting down, we won’t be able to budget for travel.

I know this from experience. I’m the worst budgeter in the world. I won’t bore you (or embarrass myself) with the details of just how bad I am at not spending my money. I’m grateful for the whole “opposites attract” phenomenon because Doug is a great budgeter and together we’ve been able to reach some financial goals I would have never achieved alone.

First, let’s talk about how Doug and I do our monthly budgeting. We follow a simple framework because monthly budgeting can seem daunting. This is what we’ve tried and it’s worked for us.

Every month, at the end, Doug and I schedule a budget meeting. Last month was a long meeting because we were cleaning up our finances, so we went out to a cafe with delicious hot chocolate to make it seem fun (and you know, positive reinforcement). Most months it only lasts about 30 minutes.

Here’s how we budget monthly, step-by-step:

1. We look at our budget notebook (you could also do this on a digital spreadsheet) and turn to the previous month to see what we budgeted for each expense category. Our typical expense categories include:

- Tithe, which always accounts for 10% of our monthly income. (This is our religious charitable giving for the month. If you’re not religious you might not have this line item or you could do a donations/charitable giving line item.)
- Food. (Eating out, grocery store snacks, coffee runs, etc.)
- Groceries
- Housing expenses (Rent + Utilities)
- Personal care (Toiletries)
- Grooming. (Haircuts, Manicures)
- Car Gas.
- Car. (Our car payment and any upkeep/mechanic fees we had that month.)
- Health. (Vitamins or medicine)
- Housewares. (Such as bedding, towels, or a vase.)
- Subscriptions. (Netflix or other apps)
- Transportation. (When we pay for parking, tolls)
- Travel. (Hotels, park entrances, airline tickets)
- Cash withdrawals. (Some restaurants in our rural community only accept cash)
- Student loan payments.

2. We go through our card/bank statements and, next to what we budgeted for each expense category, write out the actual amount spent in red ink. Then, we add that up to see our total expenses for the month and how they compared to expected expenses.

3. We turn to a new page in the notebook and write out our spending categories for the new month. (These don’t usually change unless we have something special going on that month. For example, when we had Doug’s 30th birthday party, his party was a separate expense category for that month.) picture of example budget sheet

4. Once we have all the expense categories written down, we’ll put down our expected income for the month. Although I’m a freelancer, I work on retainer with clients so usually our income is fairly predictable.

5. Next, we go through and talk about the monthly expenses. Some expenses rarely fluctuate, like tithe, rent, or groceries. But other things, like gas and food, might be more or less depending on what we have going on that month and what trips we’re planning.

6. Once we’ve listed out our monthly expenses, we add them up to see what we have going out that month. Then, we subtract our monthly expenses from our income to see how much flex money we have that month. Flex money is any money left-over after we factor in all our expected expenses. This is key—our monthly expenses should not surpass our income. In August, when we had Doug’s birthday and family coming to town, our monthly expenses were going to surpass our income so we decided to cancel two trips to Chicago.

7. What do we do with the flex money? Recently we’ve been paying down our credit card. We paid off $15,000 in the past fourteen months. See this blog for why we had a $20,000 balance on our credit card.

Let’s talk about that flex money.

Because we wanted to knock down our credit card fast, and we knew we usually had at least $1,000 of flex money after our monthly expenses, we haven’t built the credit card minimum into our expense categories. Instead, we built our travel plans into the monthly expense categories and used the flex money to pay off as much as possible on the credit card.

Once we get our credit card to below $1,000, we’re going to allocate our flex money differently (and we will put the minimum card payment into our expense category). We plan to save up for buying a house, building a medical leave fund since I’m self-employed, contributing towards Doug’s lowrider fund, and building a travel fund so we don’t have to worry about micro-budgeting for every trip.

So, how do we budget for travel?

This year, we went to Aruba for 21 days and Mexico for 7 days. The Aruba trip was covered under a school bill refund I received in December of 2020. The refund was $2,500 and we ended up spending a total of $2,861.70 for that trip.

Mexico was a planned vacation and we budgeted for that trip ahead of time by making it an expense category on the monthly budget. We contributed to that trip fund for three months (the total trip cost was about $1,500).

This is a pretty common method for budgeting.

Here’s something we do differently than other people — our travel plans are always flexible.

While the dates are less flexible, the destination could be changed up to a few days before we leave. In May, we were planning on road tripping through New England cities. But, we found a great deal for an all-inclusive trip to Mexico and switched up our trip the month before. It ended up costing us less than the road trip!

Sometimes, the best way to save on travel is to be flexible and always be looking for deals. If you can go on an amazing trip for less than you budgeted, you’ll have more money for future trips. Flexibility is our top tool for cheap travel.

But, we’re always looking to improve.

Let’s take our family-related travel as an example. My family is in Tennessee and Florida, and Doug’s family is in Washington state and California. We end up traveling to both coasts multiple times a year, and our parents come out to us at least three times a year combined.

Until now, we didn’t save up for family travel. For example, when we bought our tickets for Christmas and New Years’ travel last month, that expense got absorbed into our flex money, so we didn’t put as much towards the credit card as planned.

So in 2022, we’re trying something new.

A new expense category.

During our last budget meeting we mapped out all the family travel we know is coming up in 2022 (holidays, weddings, important birthdays). Based on past travel, we added up how much approximately we think that travel will cost. We didn’t try to figure out expenses once we’re with our family since those tend to be pretty low. Then, we divided it by 12 to find out how much money we should put away each month to cover those costs.

Now family travel savings is a new line item in our monthly budget.

Another benefit of mapping out our family travel for the year is that we were also able to see the chunks of time we have available for BIGGER trips (that means, not our monthly camping trips or our car-camping adventures, since these tend to be fairly inexpensive). In 2022, there’s a chunk of time in August available for a bigger trip. In a couple of months, we’ll set a budget for that trip and start putting away money every month to cover it, fitting it in as a line item in our monthly expenses.

When planning for our big trips, we use a funnel system. We set a budget first and finalize a location later. Wherever we go, we know it needs to fit into the budget we set. Again, flexibility is what we’ve found to be key in making travel budget-friendly.

Budgeting, in general, can be difficult. The key to living the life you want, in our experience, is to prioritize what’s important.

For example, I have federal student loans, but our monthly payments are fairly low (and nonexistent since student loans were paused due to the pandemic). At this time we’re not focused on paying those off, because our priority is paying off our credit card and making sure we still have money left over to travel.

Once we pay off our credit card, we may or may not focus on student loans. Those payments don’t bother us, and we’re not willing to sacrifice years of travel to pay those off.

I’m not Dave Ramsey or other financial gurus who will tell you to pay off all your debt first. I’m a regular girl who wants to (financially responsibly) enjoy life today and tomorrow and the day after. That means that sometimes we prioritize our debt, sometimes we prioritize a trip.

We do all of this while looking to the future, so yes, while traveling we are still putting money aside for things like retirement. The key to traveling is living on a balance, and for us, that’s only possible when we stick to our monthly budgeting.

Hi! I'm Natalie

Cuban red-head, traveler, journalist, marketer. I love books and Netflix and writing. I enjoy good food, but gravitate towards simple, traditional dishes. My goal is to always remember that life is made of the ordinary, simple moments. Let’s celebrate those moments together at Simple Love.

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