"Per Day Budget" and Why it Works Better for me as a Traveler
"Ok seriously, how can you afford all of this?"
As a female solo traveler that's been to over 30 countries and 110 cities, this is a question I get often.
And here's the honesty: I didn't always take the best financial choices when I was younger and took some of these trips. And as I've grown and financially suffered from some of those 'not as smart' choices, I knew the only way I could realistically keep up with this lifestyle was by getting really serious about my finances. I did not want to stop traveling, but I also needed to be debt-free. And I'm lucky to be at this point!
This question is going to be explained with several posts, where I'd love to provide more insight on discount travel, travel with credit cards, hacks for finding cheaper flights...
For now, let's talk budgeting.
Learning how to budget was definitely a journey. First, I entered the obsessive stage, a very short-lived one.
I made budget excel where I budgeted everything: my bills, my coffee, my bar tab, everything. Everyday, I logged my purchases into its respective category and for a few days I hated myself for going over. I applaud people who can financially plan for everything and everything. I simply could not and still cannot. I am in my late 20s, and life can look very differently for me month by month. So when I tried logging every purchase into a category with a fixed budget, I was quickly failing. Setting yourself up for disappointment is a quick way to abandon something. So I did, and I went back to not having a plan for a while. Quickly again, I learned I needed to explore other options. I learned about per-day budgeting, and it's changed my life and allowed me to keep traveling without the worry of debt.
Before I dive deep...
This would not be real if I did not list some of the privileges I have in being able to travel. I am a U.S. Citizen. I do not spend hundreds and hundreds on visas. I am child-less, and I do not believe with my current salary I would be able to travel as often if this was different. So, I am aware I have this lifestyle with my salary due to me being child-less and dual income with my partner. I'm in a pretty satisfied point in my career for my age. I share rent and bills with my boyfriend, and because we split our contributions based on income and he makes more than me, I can afford my bills and do not worry about them. I have bigger financial and salary goals, but currently, I am pretty happy where I am at with my current circumstances.
That being said, there is still so much I do, and my boyfriend does, on a daily basis to make this lifestyle a reality. Keeping our travel fund live means getting really serious about budgeting and about our daily purchase choices. We also spend an extensive amount of time researching and looking up ways to discount travel. We do not fly first class unless it would be free with points. We do not stay in really nice hotels. We do prioritize travel when thinking about credit cards, and we are able to have some nice "luxuries" like airport lodges and certain hotel choices with our cards. But this a blog post for another day (because this is its own world).
Maybe you'll relate to some pieces of advice on this blog post and not others. Maybe this idea isn't even slightly an option for you. Maybe you're even better than me and can plan for finances more consistently and per-day budgeting is too simple for you. I am here to provide some clarity on what works for me and my circumstances, and I hope it can help some people.
Back to budgeting! So, placing all my purchases in categories did not work. What did work for me now?
Per-Day Budgeting
I decided on per-day budgeting when I realized there were *some* things I needed to place in a category, for example, bills, but most purchases were better off just calling them "wants." So what I do now is budget those fixed and consistent monthly costs/bills, and then use the remaining budget to create a per-day budget.
Why? My month-to-month purchases can look very differently for wants, which makes them very hard to plan for.
For example:
- I am in my late 20s, my body has changed since my early 20s. For months and months, I would maybe thrift a few things or buy a dress for a special event, but I wasn't prioritizing buying clothes for a while. But then one month, my pants did not fit anymore, and it was time to drop a couple hundred and new clothes because I quite literally needed to.
- Some months I go out more than others. It was hot this past summer in Houston, and I honestly was just not in the mood to be in some rooftop spot when it was 110 degrees outside. Summer 2022 though? I was out Thursday to Sunday brunch (it was my first summer living in my hometown after being abroad for 3 years: it was time to hang out with everyone again).
- Some months I travel more, others none at all. So a gym membership does not make sense for me because I am gone sometimes. Some months I want to go to workout classes a few times a week, and some months, my 10 day trip to a walkable city and hitting 30k+ steps daily is my workout.
I can go on and on with examples, but long story short, a per day budget is great for anyone who has struggled to plan a lot of their purchases.
Having a per-day budget allows me the freedom to have a guidance, without a strict budget. So let's say you use my budget template and end up with a $35 per day budget. You get invited to dinner and drinks with a friend, and spend $60. That's fine! I go over my per-day often. What does this mean though? It means I have to adjust my spending other days. For going over one day, my per-day budget now decreases for the rest of the month (or half month, depending on how you budget).
Some days I spend double, even triple my per-day budget, and I can make it up by having a no-spend day the next day. Or if a no-spend day is not possible, I just spend a little less the next few days.
Once you calculate your per-day budget, and learn to work with it (even if you're not perfect initially), it's a number that will eventually just stay in the back of your mind. So now when I decide to buy something I want, I think about how many 'days' it may cost me.
This is literally my thought process when I'm out shopping...
"This dress for a wedding? Quadruple my per-day budget. Ok, but this is for a really close friend's wedding, and I know the other guests are going very formally. I have a pretty calm week this week before the wedding, so I know I'll probably stay under-budget these following days. This is worth it for me; I'm going to buy it."
Another day... I see a shirt I like that only goes over my per-day budget by 10 dollars. "It's not even double my per-day budget. It's not that much. But, I have guests from out of town this week. We have plans to go out tonight already, we have brunch plans tomorrow, and I have a few plans with other friends this weekend as well. This week is not a week I can really go over my per-day because I know I cannot under-spend soon. I'm going to come back to this shirt another time and decide if I really want it then."
And this is an adjustment, for sure. When I first started my per-day budget, I was disappointed in myself when I would go double, and five times more my per-day. Honestly, this guilt has now gone out the window for me now. I spend and go over my per-day, and I don't think twice about it once the purchase has been made. That's because I already thought about how I could go under-budget other days based on my circumstances for the coming days/weeks.
When you see my template, the category rows are pretty limited. I budget my few bills (again, realizing my privilege here!), some essentials like gas and groceries, and then the very few other monthly costs. An important note, keeping monthly payments low is the best way to increase your per-day budget. This means, I do my best to avoid services or items that require a monthly cost. I have cancelled a lot of services to make this a reality. I do not pay for streaming services. I don't have the car I want to avoid a car note. I save up for items instead of buying them on a repayment plan to avoid a future monthly payment and interest. However, I do not punish myself and completely ban myself from non-essential monthly payments.
Right now I am taking French lessons through an app and it's $20 per month. I like my progress, I use it every few days, so I am keeping it for now. Also, I get a pedicure once a month. When I started financially planning again, I realized I had to say a very difficult goodbye to manicures and eyelash extensions. These were services I would get regularly before, and I enjoyed them. I just realized I cared more about traveling than these services. But honestly, I was not ready to say goodbye to pedicures. I keep doing it, and I have no shame because it's one of the very few things I keep as a monthly consistent cost.
So my advice is look at everything you pay for monthly. Really think about how often you use these items/services. Decide if it's a priority for you, and evaluate whether you actually utilize the purchase on a regular basis.
Now, as I mentioned, I stopped getting my monthly manicures. However, I have gotten manicures since this decision. I stopped getting them every month, but, sometimes I have gotten my nails done for a special event or a self-care day. I use my per-day budget for this. I used to have my nails and eyelashes done all the time, which meant spending 100+ per month on these services. Now, I just wait for a special occasion, which means I've saved hundreds which instead goes towards travel, savings, and other wants.
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