Have you ever asked: What is cost of travel?

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One of the most common reactions I got from my previous post about the total cost of my three years of travel was, “wow, that’s really cheap.”
Throughout my years of travel I’ve come to learn that the cost of a destination should not simply be defined as “X country costs $X a day.” Well, that “$X” number might be in the ball park of what you might end up spending in the end, but the problem is that most people end up spending more than what they budget because they don’t take their time to understand their destination and how costs are structured there.

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Money from the world

When I did my cost break down in my previous post, I preferred to not give daily averages per country since many of them ranged outside of the norm from what a typical backpacker would spend. But, even when my daily average was abnormal for some countries, the “cost structure” still followed through according to how the destination prices things.
Also, along my trip I’ve traveled with several other people who also like to travel on budget and plan similar trips to mine, yet sometimes they do it much cheaper or much more expensive than mine. It’s pretty much the same trip, but they have a different approach to how they spend their money in certain places. They either like to pamper or rough it a bit more than I do, or look for alternatives that fit best what they are looking for out of the destination. Still, whether they were more expensive or cheaper than me, their spending followed the same “cost structure” as mine.

What is Cost Structure?

 
Ok, I’ll explain what Cost Structure is (at least for me). This is a scale that marks the range of money (from cheap to expensive) a traveler is expected to spend on any destination’s major tourism components, including but not limited to accommodation, sightseeing, food, transportation, and such; and how each component relates to the others cost wise. This helps you understand how to properly fit a destination into your budget by knowing exactly how your money is distributed in each place you visit. Different destinations approach all living and travel related costs in different ways, which means that each destination deserves it’s own careful analysis based on your style of travel and interests.

 

Hiking Routeburn Track in New Zealand

 
Websites like Budget Your Trip, which I always recommend to see daily cost averages on any given country as a budget, mid-range, or luxury traveler; are only good enough to have a broad idea of general costs, and often fall short from the actual daily average you’ll end up spending. But, I believe you can approach budgeting in a different way since only knowing a daily average doesn’t mean that you know exactly how you’ll be spending and distributing your money there.