How to travel with friends on different budgets

Personal finance experts say it is important to decide on a budget, create an itinerary and use apps to split bills to have a stress-free holiday

An itinerary will help you and your friends estimate how much you’re going to spend on the trip and ensure that everyone in the group knows what to expect. Getty Images

Travelling with friends is a fun way to foster deeper connections and make lasting memories. But group trips can be stressful, especially when it comes to agreeing on expenses and if everybody has different budgets.

“Travelling in groups looks easy from the outside — everyone’s either laughing by the beach or tucking into Instagram-worthy brunches,” says Vijay Valecha, chief investment officer at Century Financial.

“But behind those smiles can be some potentially very uncomfortable conversations about money — ones that you, too, should be having when you plan your next group trip.”

Bookings for large group holidays surged in the UK after Covid-19 restrictions were relaxed, according to travel technology company Amadeus.

“We expect to see the growth of group trips continue among friends throughout 2022,” Amadeus said.

Here personal finance experts offer their advice on how to plan a holiday with friends without stressing over finances before and during your travels.

Decide on a budget

Sit down with your friends and put together a list of how much you are allocating to each expense, such as travel, accommodation, food and transport, among others, says Ramzi Khleif, general manager at digital wealth manager StashAway Mena.

“Once you know how much each thing will cost, make sure you keep that sum aside and try to stick to the budget,” he says.

Having a budget that suits everyone’s financial situation is key to enjoying your holiday, says Sophia Bhatti, a partner at financial advisers Hoxton Capital Management.

“It is important to be upfront from the beginning about your budget and what is affordable to you. Setting a budget helps when planning a trip and ultimately avoids any arguments because you have managed spending expectations beforehand,” she says.

It is important to be upfront from the beginning about your budget and what is affordable to you

Sophia Bhatti,
partner at Hoxton Capital Management

It is recommended to discuss ballpark budgets well before arriving at your destination, Mr Valecha says.

“It might be a moving target, but it’s a helpful reference point for nailing down larger expenses,” he says.

If you plan well in advance, you can even invest in low-risk portfolios, such as a money-market fund or a mix of bonds and fixed income to make a little profit before the trip, Mr Khleif says.

Make an itinerary

Do your research and create an itinerary to plan the main parts of your trip before time. This can help you and your friends get a rough estimate of how much you’re going to spend on the trip and ensure that everyone in the group knows what to expect, allowing no surprise expenses that you and you friends have not accounted for, StashAway’s Mr Khleif says.

“An itinerary allows you to book early for excursions and, in some cases, get online discounts. It also helps the group to decide whether to separate for certain activities — not everyone has the same tastes or interests,” Ms Bhatti says.

“Making an itinerary avoids extra costs for last-minute bookings or excursions and avoids anyone missing out by knowing ahead what they will be doing and spending.”

However, it’s also important to not over plan, Mr Valecha says.

“The key to group happiness is to leave plenty of room for flexibility when making itineraries — it allows for people to opt into the larger trip but pick and choose activities they would prefer to spend their money on as per their pockets,” he says.

“It is better to split up for a few hours and have everyone do something they enjoy than have anyone feeling resentful about being made to do something they weren’t completely on board with.”

Create a fund pool

Friends who are travelling together can create a fund pool by equally contributing a certain amount for the trip, Mr Valecha suggests.

Once everyone commits to going on the trip and contributes the money, elect one person who everyone trusts to oversee the funds. This could be the person who’s handling all the travel arrangements but be sure that the person is responsible and quick to respond to everyone’s questions about the status of the money and the trip, he says.

“You and your friends can also opt to alternate paying for meals or activities. This way, each person is contributing to different aspects of the trip.”

Use an app to split bills

There are many cost-splitting apps available, which allow groups to divide bills quickly and easily.

On many trips with friends, one may end up paying for dinner, the other may have hired the car and another friend may have booked an excursion, Ms Bhatti says.

It is recommended to discuss ballpark budgets well before arriving at your destination

Vijay Valecha,
chief investment officer, Century Financial

“Rather than worrying that you will not be paid what you are owed and to avoid the ‘I’ll pay for the next drink or taxi’, these apps do all the maths for you,” she says.

“Splitwise is a very handy app, just invite your friends, everyone adds their own expenses that they are due and the app calculates it all for you.”

Look for group discounts and shared accommodation

If budget is a burden for some members of your group, find ways to make activities cheaper and more inclusive, Mr Valecha says.

“You don’t always need a massive group to qualify for group discounts,” he says.

Most countries and cities have discount apps and websites that you and your friends can research and download before the trip to find good deals for entertainment, shopping, food and travel. Some attractions even offer discount rates for groups of four or more than five people, Mr Khleif says.

“Many holiday and excursion companies offer group discounts, buy one get the second person free and percentage-off walk-in prices,” Ms Bhatti says.

“Restaurants, beach clubs and hotels offer promotions on their social media pages. If you have a particular place you want to visit, always check their socials.”

Sharing an Airbnb or equivalent can also save you a lot of money, Mr Khleif says.