Your guide to tracking travel expenses for a worry-free vacation

4 min read

Going on vacation is supposed to be relaxing, but racking up a huge list of expenses can be highly stressful. That’s why we recommend tracking your expenses clearly so you can avoid overspending. In this guide, we’ll explain how you should set up your budget, and give you some tips for sticking to it the whole time you’re away. 

1. Check your cash flow 

The best way to track your travel expenses? Get used to tracking your cash flow before you go. This means understanding where every cent goes each month. Sounds scary? Don’t worry—it’s less daunting than you might think. Taking a long hard look at your spending habits can reveal some uncomfortable truths, but you can’t improve your financial health without accepting where you’re at!

Take things month-by-month

To get started, start tracking your bank’s monthly statements, including all of your incoming and outgoing money. Then, subtract your monthly expenses from your monthly income. If you’re spending more money than you have coming in each month, it’s time to learn how to budget

If you have some surplus cash left over, it’s worth creating some savings goals. If you don’t have any surplus, then it’s time to adjust your expenses.

2. Categorize your expenses

Once you know where your money comes from and goes to each month, you’re ready to start categorizing your expenses. The easiest way to start is to split your expenses into two categories: fixed and variable costs. 

Your fixed costs are your expenses that stay fairly consistent. They include things like rent, utility bills, and debt repayments. Your variable costs, however, are more inconsistent. They include your grocery shopping, non-essential subscription services, and the cost of entertainment like eating out or going to the movies.

How does this affect my travel expenses?

Knowing how much you spend on your variable costs while you’re at home can give you a good idea of how much you can safely spend while on vacation. Tally up your monthly expenses for:

  • Groceries

  • Eating out

  • Entertainment

  • Clothing

  • Nights out

Then divide that number by the length of your trip. For example, if you spend €300 a month on groceries at home and you’re going away for two weeks, you’d have roughly €150 to spend on groceries while away (€300/2 = €150). 

However, you’ll probably want to factor a few splurges into your vacation budget—it is a vacation after all! But, to do this without overspending will take a little bit of planning—and a proper budget. 

3. Create a budget 

Before going on vacation, consider creating a budget and allocating a portion of your monthly savings towards your travel expenses. As you now have a detailed overview of your monthly expenses, it’s time to work out how much you can start contributing to your savings fund.

Not sure where to start? The 50/30/20 rule is a good place to begin. A simple method for getting to grips with your finances, the 50/30/20 rule is a format for budgeting that works like this:

  • 50% of your expenses go toward your ‘needs’ (i.e., your fixed costs)

  • 30% of your expenses go toward your ‘wants’ (i.e., your variable costs)

  • 20% of your expenses go toward your savings (i.e., your vacation fun)

4. Cover your travel expenses

Budgeting makes saving much more straightforward. Once you know how much you can set aside each month, you can start planning a vacation that’s well within your budget. Say, for example, you’re able to save €500 a month. You could allocate half of that towards your travel expenses. After six months, you’d have saved €1500. This will easily cover most short city breaks and most week-long EU-based trips.

By working out how much money you can save, you can tailor your trip to meet your budget. By allocating a spending limit on everything from transport and accommodation to eating out and activities, you’ll avoid overspending—and save like a pro.

5. Identify where to cut back

If you’re serious about saving, tackling your fixed costs can help you make some huge savings, fast. But, your fixed costs are also more difficult to change. This could mean moving into a smaller apartment to save on rent or changing your energy-using habits long term. 

So, if you’re just beginning to think about budgeting, it’s better to look at your variable costs and identify areas where you might be able to cut back. For instance, you could try:

  • Reducing how often you eat out

  • Canceling subscriptions

  • Exercising outside or at home rather than at the gym

  • Cycle to work rather than take public transport

There are plenty of creative ideas for saving money out there. Just pick a few that work for you, and start growing that vacation fund!


Your money at N26

At N26, we take the hassle out of tracking your finances. Receive instant push notifications every time money enters or leaves your account, so you always know exactly where your money is. Our Statistics feature then categorizes your monthly expenses automatically, so you can learn to optimize your budget for the future. Worried about racking up unforeseen expenses while on the road? N26 You and N26 Metal customers have access to extensive travel insurance, so you’re covered in the event of flight delays, pandemic-related cancellations, luggage loss, and more. Find the plan that’s right for you today. 

By N26

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