Run the numbers after your trip

When I come back from a long trip, I tend to do three things:

• Sleep copiously (though not necessarily in the correct hours for my current time zone)
• Dump the contents of my bag either into the trash or into the laundry (or sometimes a hazmat facility)
• Run the final numbers of my spending

I agree I’m a bit of a numbers wonk, but luckily the numbers I run don’t require graphs. I simply add up what I spent on the whole trip and analyze it.

You are allowed one carry-on item, but no bills

I don’t let my travels follow me home. This means that I don’t pay for anything that I don’t have the money for. If some fictitious person said to me at the onset of my trip, “that will be [total cost of the entire trip] please” I could go to my bank and get out the cash and hand it to him. The only alternative is to come home and have the bills from your trip pile up in your doorway too. And what’s worse than spending hundreds or thousands of dollars on a great time? Paying 10-20% interest on this money over the course of months. No thank you.

The process of analyzing my spending shouldn’t reveal anything shocking. I had a budget for my trip in advance, and periodically during the course of the trip I checked in against it. (Daily check ins of a budget is slightly more complicated when on the road, so it’s more like an every-few-days thing.) The question to answer is simply: how much did I spend compared to what I budgeted for?

I’ve talked about this before, but from the perspective of the pre-trip planning. This process here just goes back and verifies things. If I went over budget, by how much and on what? If I went under budget, why did I think I needed so much?

On this trip, I budgeted $100 per day for everything: food, lodging, train fares, etc. I’m in no way suggesting that this is a perfect number; you may find your number is higher or lower depending on your tastes, budget, and location.

I generally don’t break up that daily budget into specific categories, as I try to vary these things. On a day when I stay at an inexpensive hostel, I can afford to eat out at a nicer restaurant (or save my money for a nicer experience another day). On a day when I splurge on a nice hotel, I tend to be a bit more spartan on other things.

So with all that in mind, what does it mean to say “going over budget”? Doesn’t that mean debt? Not at all. I budgeted a certain amount of my savings for this trip, but this wasn’t all the savings I had. I have a cushion. In fact, my cushion has a cushion (I’ll talk about this in an upcoming post). So if I went over budget, it wouldn’t involve debt.

So what do you have to do to be able to run the numbers?

• Keep track of your spending. This can get more complex when you factor in exhange rates, so I recommend taking money out of the ATM is discrete chunks (say $100 at a time) and then spending from the cash. Makes accounting much easier, and you have fewer transactions to keep track of.
• If you want to keep track of your specific categories of spending (how much you spent on lodging, food, etc.), then you’ll need to write down every purchase, using a notepad or Evernote or some equivalent. This is no different than what I advocate people do when they are at home, though it’s more difficult when on the road, so it’s up to you and how much you want to be able to analyze.
• During the course of your trip, look at your ATM transactions to see where you are. If you are half way through your trip, expect to have spent about 50% of your funds.
• Then do the same thing after the trip, but expect to have spent 100% of your funds.

This isn’t complicated, but it takes diligence and focus, two things that are in shorter supply when you’re out seeing the world. But don’t forget what’s at stake: Someone else always benefits when you lose focus. In this case, when you stop being aware of your spending, it’s more likely to cost you more.

And the results

I will say that I went over my budget by 2% (7% if you count some clothes I bought, unrealted to being on a trip). At my $100 per day, this means that I spent about $107 per day. While this was more than I had planned on spending, it hardly broke my particular bank. I had the cash on-hand, so it was okay. And I was actually quite proud of how close my projections came to reality. If it had been very different, it would give me the opportunity to figure out why. Was I too conservative? Should I have found cheaper lodging? What you learn here will help you better plan the next trip.

What is important here is that the only things I brought home were pictures, souvenirs, memories and stories. The trip was fully paid for. Which means, among much else, that now I can now start saving up for the next one.

But enough about me. Do you track your spending when you’re on a trip? How do you do it?