You’ve done your research and you know exactly how much money you need to travel…now add 10-20% on top of that. Why? It doesn’t matter how well you budget, there will always be unforeseen budget breakdowns that you will encounter in your travels. Here are a few examples:
1.) Leftover cash when you leave a country
You can try to predict exactly how much cash you’ll need for your last ATM withdrawal but you’ll always end up with a few cents or a few dollars left over (at best). It’s not worth converting this small of an amount at a currency exchange, but this loose change adds up over time.
2.) No choice costs: only one bus left and it’s expensive
That low cost bus you planned on taking last week got canceled due to lack of demand. Now you have to take the standard fare option or pony up for the train. Unless you want to hitchhike, there’s nothing you can do.
3.) Your stuff breaks
You never expect your hard drive to crash, your camera lens to get sand in it, or your flip flops to rip. You can try to go on without the broken item, but if you brought it in the first place, you probably need it. Is saving 100 dollars on camera repairs worth losing all of the memories from the rest of your trip?
4.) You’re in a dangerous area and you need to get out fast
Your bus ran late and now you find yourself alone in a sketchy part of town after dark. You can try to walk it, but if you really feel unsafe then that ten dollar cab ride to your hostel is worth the peace of mind.
5.) Chaotic areas and quick decisions
You just waited fifteen minutes to get to the front of the pack at the best goulash stand in Hungary. There’s a mob of people behind you waiting to order and there’s no sign of any prices anywhere. There’s no time to ask what everything on the menu costs, so you order and pay whatever they tell you to pay. Then you hear the next guy order and you realize that the goulash soup is less than half the price of the goulash (plate). Whoops.
6.) No change for city buses
Even in America, I got burned several times from not having exact change on city buses. If it’s three dollars and all you have is a five, then your trip just became a lot more expensive.
7.) Baggage handling losses
Either that airport baggage handler stole the rain jacket out of that outer pocket in your backpack or the conveyor belt ate it. That situation may be avoidable, but sometimes an unscrupulous worker will decide he needs your stuff more than you do.
8.) When your host/friend wants to splurge
You just came half way around the world to see your foreign friend. He was even nice enough to take vacation days during your stay so you guys can hang out. Unfortunately, he has a real job and wants to escape for a few days so he booked lodging on the coast for both of you that costs three times what you would pay at a hostel. You can’t tell him “that’s too expensive!” He just used precious vacation days to see you.
9.) When your travel buddy has more expensive taste
You’re traveling with your best friend from home, but they have double the budget that you do. You’re both after the trip of a lifetime, and for them that means eating brunch at a nice cafe instead of buying a loaf of bread from the grocery store. Sometimes you can pass on the invitation or settle for the cheaper option, but inevitably you’re going to spend more money.
10.) When you and your friend are borrowing from each other
Maybe one of you has high foreign ATM fees so one person pays for the cash items while the other books the hostels with their credit card. Maybe your friend lost their wallet. Either way, as soon as you start borrowing from each other a few things happen:
-You completely lose track of how much money you’re spending. Paying for two sometimes and just yourself at other times makes your bank statements worthless.
-You round. Nobody wants to be that uptight friend about decimals, so you start rounding.
-You forget to record things. Every time you forget to record that tram ticket or candy bar, the lender/cash person loses money.