The Three Question Budget

No matter how or where a person travels there is always one important question which comes to mind when thinking about money: How do I make the most of the money I have available? I have met people on strict budgets who spend less in a month than most people do in a day.  I have met others who spend money with no seeming regard for tomorrow.  I even met one pair of travelers who started on a strict budget, then after having everything they own stolen they decided to forget the budget and spend two years worth of travel money in a single month!  They had a fabulous time and never regretted a moment of it.  There is no right answer to this question, merely different lifestyles and different methods of travel.  Frugality and a tight budget will extend the trip yet the cost is sometimes enjoying the moment. A lavish lifestyle of luxury is a lot of fun in the moment yet limits the duration of the trip.

My own personal desire is to maximize how long I travel while enjoying myself immensely the whole time.  I have no interest in tracking every penny so instead I have developed a system which provides a balance between luxury and miserly lifestyles.

I ask three questions about money

  1. Would I rather spend money on this or travel longer?
  2. Am I suffering because I am not spending enough money on luxuries?
  3. Is this luxury really more important than traveling longer?

The result of budgeting using these three questions is that I never feel like I am preventing myself from enjoying life just to travel a bit longer, yet I also never spend money frivolously. This style of budgeting has allowed me to travel at a level of comfort to me in each country without concern for how prices compare to other countries. It has also allowed me to adjust my style of travel depending on my current psychological, emotional and physical needs. This works for me in any situation no matter if I am sleeping in expensive hotels and eating at the best restaurants or volunteering, hitchhiking and cooking my own food because the questions are self balancing towards one goal: be happy and keep traveling!.

Example: Cost of Beer

$3.00 per day
x 365 days per year

= $1,095.00 per year!

When using these questions to budget money, it is critically important to realize how daily expenses add up over time. One beer every night seems like a small expense yet over the course of a year that one daily beer could easily cost as much as a full month of travel! Any time I find myself spending money every day on something which is not strictly necessary, I do a quick calculation to find out how much that expense costs me per year. I’m not saying avoid drinking that beer each night, just keep in mind how such seemingly small costs add up over time.

I’ve heard it said, “Time is Money!” Here too this is especially true for there are many circumstances when time must be viewed as money to be budgeted with these same questions! For example, I love the concept of couchsurfing, however searching for hosts requires a significant time investment. I decided in this case that my time is more valuable than my money so I frequently pay for hostels instead of search for a free bed on couchsurfing.

One Comment:

  1. Good observations on how to put money in perspective as a traveler. I sometimes find myself making that same calculation you mentioned: How much does this daily expense add up to in a year? The result is often surprising, and now I’ll be making the calculation more often in the future.

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