Handling Finances while Travelling—part 3: Travel Per Diem and Savings

Handling Finances while Travelling—part 3: Travel Per Diem and Savings


When going on vacation, we tend to go wild and lose track of our spendings. It seems like anything goes. An inexperienced traveller will go to all the expensive tourist attractions, all the expensive restaurants, and buy all the crap and junk a tourist can buy. I know, I did that. This third post of four is dedicated to handling your money on the road: Travel Per Diem and Savings.

  1. Budget (Read)
  2. Bill Payments (Read)
  3. Travel Per Diem and Savings
  4. Minimalism (Read)

This may sound to you like hell, jail, and torture. Some may even say “I work hard all year, I can spend MY money whatever way I see fit. Mind your own business, I deserve a break.” Well, I'm not here to stop you from doing exactly what you want and have the time of your life. I want to offer tips and a different perspective to those who are looking for a way to travel more and save money. I'm also here to point out alternatives that you may not know about that may be better than a 5-star hotel.

A traveller can go on 25 trips and still discover ways to save and have a blast. I’ll get you started with the key tips to be on the path to smart travelling. You'll then be able to shape up your own techniques.

  • Travel Budget
  • Automatic Savings
  • Food and Accommodation
  • Per diem
  • Tally
  • Travel Budget

Right off the bat, you need a travel budget. It doesn’t mean to approximate how much your trip will cost you on your credit card. No! Don’t. Do. That. It’s a bottomless pit. I know. I did it.

You need to save the money ahead of time. Yeah, I hear you. It sucks. You want to go now. It’s not so hard or so long to get the ball rolling. Once it’s going, you'll even be able to save money for your next trip while on the road. The more you practice the tips I'll give you, the more these will become second nature to you. It may really sound foreign and hard, but it really isn’t.

Refer to Handling Finances while Travelling—part 1: Budget and Handling Finances while Travelling—part 2: Bill Payments to figure out your basic day-to-day budget. Without it, you won’t be able to properly save money. I’m serious. As fun as it sounds, you can’t use all your money to travel and disregard your monthly bills. If you want to do that, get rid of them. Cut the cable, the internet, the phone, and the apartment. Some people do. If you don’t want to, then handle them responsibly.

I apologize if I sound harsh. I simply want to be very clear about this.

From your basic budget, what's your monthly travel budget? Based on where you want to go, how many months will it take you to save the money necessary?

If you don’t know how much it costs, run an approximate research online. Pretend to book a flight, a hotel, and a car. You can use websites like Expedia.com. Check out the cost of life in that country and round-up how much it would cost you per day. Add roughly 1000$ for attractions and tourist stuff. You can check the Per Diem section below.

Keep in mind that flight prices go up 50% about 7 days before departures, are more expensive around holidays, and often more expensive on weekends.

I won’t expand much on pricing and destination selection in this post. I will speak of that later. Anyway, by this time, you must have one hell of a scary number. Don’t worry, we'll address this below.

Right now, you have this rough number, probably around 3000$ to 4000$ per person. There are many travel hacks you can do reduce this cost. I'll discuss a lot of them over the next posts. In this one, I'll address the two main ones: food and accommodation. Before that, let’s start by saving money.

Automatic Savings

To travel, you need money. Yes, indeed. It should not be left  in your hands to save that money. We always find something tempting or “useful” to spend money on in the moment.

I have a savings account beside my regular checking account where I save one-quarter of my monthly travel budget every week. I don’t do that on my own. I scheduled a recurring weekly operation. I don’t have to think about it. It does it on its own, I sit back, and watch the number go up. :)

I discipline myself to transfer weekly the money from the unused groceries and gas budget to add to the automated savings.

A simple addition to bolster your savings is putting your spare change and small bills in a piggy bank. Overall, you don’t really feel the difference and that number goes up. This is what makes the difference between buying the hiking shoes you need to climb Machu Picchu… or not.

Food and Accommodation

St-Juvat AirBnb, France

Food and accommodation are the two budget killers. The flight is often not the biggest part of the deal. Most new traveller think they have to stay in a hotel. There are many alternatives and they are a lot cheaper.

Consider HomeAway and AirBnB. What are those? Individuals rent a room, entire house or apartment for a really reasonable fee. Also, for example, on airbnb.com, the prices are displayed in your currency and are pre-paid on your credit card. That’s one less hassle.

I stayed in a 5-star hotel in Italy with a beautiful garden for 600$ per night. I stayed in a beautiful house with an exquisite garden in the French countryside for 525$ for eight nights. My first trip to Paris, I stayed with friends. It cost me a few good bottles of wine… And let’s be honest, wine in France is really affordable. I’m now looking at fourteen days in either San Jose, Costa Rica, or Lima; Peru, for less than 500$.

Anywhere you stay, make sure you have a refrigerator. Grocery shop. That’s the key. You'll spend 20% of what you would spend in restaurants. Plan a few good meals in a restaurant if you feel like it, but the rest of the time, you can cook your own food.

As a business traveller, I use to eat in restaurants all the time. One day, a friend invited me for a home cooked dinner in Lille. I was so shocked at how much I missed that! Grocery shopping is a different experience in each country. In Los Angeles, I love to bring my lunch box when I train customers.

Also, home cooked meals are a lot healthier. On long-term travel, this will save you a lot of money and weight gain.

So, while your bank account is saving money for you, go online and research the best local recipes. Get to know the ingredients sold in that country. Finally, make friends. They can teach you their language, culture, and provide you with a free place to stay. You can do the same for them. Your soulmates can be found all around the world.

That’s the tip of the iceberg.

Per Diem

What’s a per diem? It pretty much means “per day”. What's your base amount per day? It includes everything except the plane, car rental, and accommodation. What will be your average spending for food, gas, cellphone, attraction, parking, souvenirs, and unexpected fees? Budget higher than necessary. You want to round everything up.

On a rounded up, conservative budget, I go with a 300$ CAD per day for two people. One day in Disneyland easily costs that. I also don’t go to Disney every day.

It’s important to know this amount and keep track of it. That’s where the tally comes into play.


Tallying up your daily spending is what will keep you free and grounded.  Add to your packing list: one or two paper envelopes, a notebook, and a pen.

Step 1. Know your per diem

Find your per diem amount and convert it into the currency of the country where you are going to. Round it down. If the exchange rate is 1.567, calculate your per diem as 1.5. This way, you know that in your actual you have 300$, but once you convert it as a lower number it may be closer to 285$ or 290$. This way, you know that you'll never go over your base amount. Make sure you still save the full 300$ or whatever your amount is. Rounding down is to give you an extra buffer.

To be clear, let’s say I have 300$ Canadian. Today’s exchange rate on oanda.com for the Euro is 1.00 CAD = 0.689813 EUR. Therefore, my 300$ is worth 206.95 EUR. With this, I could round down to 200 EUR, but I consider this buffer just a little too small. So I would decide that my per diem is 195 EUR (exchange rate of 0.6500).

Step 2. Keep your receipts

During the day, I collect all my receipts. If I can't get a receipt for something, I mark the amount down on a piece of paper. I just need to remember the number and what it was for. I put these receipts in my wallet and when I get back to my home base of the moment, I put them in the envelope. When they're in a foreign language such as Japanese, I mark what it was for on it… because good luck remembering it!

It may sound like an annoying process, but it’s actually fairly easy and gives you a sense of control and may save you later when you get back home and look at your credit card bill. Some stuff may take up to a month, sometime two, to show up on your statement.

Step 3. Tally up your daily spending

At the end of each day, as much as possible, open your notebook and compile a daily tally of all your receipts. I'm at the point of even marking down the coins I put in the binoculars at the Normandy beaches. I like to balance to the penny. I know where my money went.

My tally is divided in four columns: item, amount in the country currency, converted amount in home currency, and payment method. I create a 5-day sample in Excel for you to download: Tarvel_Expense_Tally.xlsx. You can copy and paste more days and add the new daily totals to the complete total formula in cell B1. You can enter your conversion rate in the B2 cell. When you calculate, make sure to use a higher exchange rate to create another buffer. When paying with a credit card, they charge you a higher exchange rate. Same thing when you exchange money and the currency office or the bank. Make the exchange rate higher than any of the actual ones. This is savings in the making.

Travel Expenses Tally-Up

Travel Expenses Tally-Up

Step 4. Tally up your savings

Now that you tallied up your spending, it’s time to tally up your savings. On the real-life example above, you can see that from my 195 EUR, on the first day I saved 54.63 EUR. On the next day, we saved a ton. We only spent 16 EUR for a whole day road trip because we drove a car, had lunches, and grocery shopped. Therefore, in these two sample days, we saved 233.63 EUR, and probably more than that since I used a rate of 1.61 when it was closer to 1.52 at the time. Also, let’s remember that my real per diem is around 206 EUR per day, which means that we actually saved 255.37 EUR!

60th Anniversary, Disneyland, Anaheim, California, USA

60th Anniversary, Disneyland, Anaheim, California, USA

Now, once the money is saved for the day, I DO NOT put that money back in circulation. That money is saved for our next trip. I'd only use it if the opportunity of a life time would happen. This means that if I save 200$ today, I don’t have 500$ to spend tomorrow. I still only have 300$.

Moreover, if I go beyond my allocated per diem, for example going to Disneyland sometime puts me overboard, I don't top it off with the savings from the previous days. I calculate the remaining money (always without the savings) and redivide it amongst the remaining days. Instead for 195 EUR, I may only have 187 EUR for the remaining days.

It takes me about 20 minutes every night. I know where I'm going. It stops me from going completely wild. I save tons of money for the next trip. On top of that, it gives me a really good idea of how to budget my next trip. You have a real portrait of how much you can spend in food, gas, accommodation, attraction, and so on.

Overall, on my last France trip, we saved about 1300$, which I was able to use for an impromptu ticket to Tokyo for my fiance to come with me on my business trip.

In my next post, I'll talk a bit more about savings mind set and what you can do without to enable you to travel for a lot less money and hassle: minimalism.

  1. Budget (Read)
  2. Bill Payments (Read)
  3. Per Diem and Savings
  4. Minimalism (Read)

Who Am I? I'm many things. I'm passionate about tons of stuff. I love travel. I love self-improvement. I'm a sucker for optimization, efficiency, and minimalism. I renewed with mathematics and science, those are so amazing. Astronomy and chemistry are just plain awesome! I'm a student, a mentor, a traveler, a learner, an artist, an animator, and Disney brings me tears of joy! I love to grow and I will never stop! So who am I? All that and everything else I have not discovered about myself yet. It's a never ending answer!

Qui suis je? Je suis beaucoup de choses. Je suis passionné des tonnes de trucs. J'adore voyager. J'adore la croissance personnelle. Je suis vendue à l'optimisation, l'efficacité et le minimalisme. J'ai renoué avec les mathématiques et les sciences, des mondes tout simplement incroyable. L'astronomie et la chimie sont tout simplement génial! Je suis étudiante, mentor, voyageuse, artiste, animatrice et Disney m'apporte des larmes de joie! J'aime me pousser à fond et je ne cesserai jamais! Alors, qui suis-je? Tout cela et tout le reste que je n'ai pas encore découvert de moi-même. C'est une réponse sans fin!