How to Plan a Trip Budget and Split Travel Expenses With Friends

It's hard to escape the hundreds and thousands of pictures and videos of gorgeous hotels, tropical islands, powdered ski slopes, and plates of tantalizing cuisine all over our social media feeds these days. They're all there, begging to experienced. So, if you're anything like us -- and we think you are -- you're constantly making resolutions to travel more, see more, eat more, and spend more time with friends and loved ones. The good news is that we can have the best of both worlds by taking a trip with friends. The bad news is that this can get complicated, especially when it comes time to budget or split the bill. As too many of us know, travel is great for friendships, but it can also ruin relationships if it's not approached the right way. 

While it may seem easy to keep track of expenses and split the costs between two or even three friends, the truth is that money can cause big problems. As soon as someone feels slighted, cheated, or even forced to spend beyond their budget, things can get ugly. However, it doesn't have to get to that point if everyone works out a budget and system of splitting expenses among friends. Here's our headache-free guide to keeping the getaway gang together for many trips to come.

Kitchen at the Casa Gracia Barcelona Hostel/Oyster

Kitchen at the Casa Gracia Barcelona Hostel/Oyster

First, agree on a budget.

First things first, agree on a budget (yes, even before choosing a destination). Why? Deciding on a destination first can be tricky since budget is the main factor that determines exactly what type of trip you'll be having. Not everyone can afford the same level of travel and experiences, so establishing a unanimous budget limit sets expectations early. It stops people from feeling pressured to spend money they don't have. Plus, it's easier to pick a destination once you know what your budget is, given that some places are outright more expensive than others. Have everyone research the cost of flights, hotels, car rentals, excursions, food, and more, so you can all get a sense of whether the destination is a good fit. 

Avoid: Loosely agreeing on a number. Be sensitive to the fact that all budgets are different and that some friends have to make more sacrifices than others when it comes to travel. 

Figure out how you're going to split up the expenses.

Figure out how you want to split up the costs. Are you going to book individual or shared hotel rooms? Do you want to keep a running tab for taxis and tours, or pay individually?  

Some folks find it easiest to take over a portion of the larger shared trip expenses individually. For example, one person will agree to book the hotel for the group, another will pay for the car rental, another will cover gas or taxis, and another will take care of group excursions. Depending on how this evens out and how many people you have, you can split these expenses between two people to help lower and balance upfront costs. If someone isn't able to put down a large chunk of money right off the bat, be sure to agree, in writing, on the length of time they have to pay everyone back. Otherwise, pick a cheaper trip or invite them on the next one. 

Even if you are staying in your own hotel rooms, ordering separate bills at meals, and paying for your own excursions, there will be shared costs that come up, like taxis or gas. Create a petty cash pot and designate someone to be in charge of it. At the start of the trip, have everyone throw in an even amount of cash in the local currency ($100 is usually a good start) and use this money for all these miscellaneous shared expenses. Evenly divvy up the leftovers at the end or buy souvenirs for everyone. 

Pro tip: If you're planning a big trip well in advance, set up a separate account that everyone contributes a set amount to each month to help save up for the shared trip expenses. This is a great way to get flights, hotels, and even some fancy meals out off your mind when it comes time to enjoy yourself. 

What about meals?

Meals are a huge point of contention when traveling with friends. Without fail, there's usually someone who doesn't eat as much, drink as much, or tip as much, and keeping all your meals on the same check is almost guaranteed to cause issues. That said, always split checks. If you can't or don't want to split the bill 18 different ways, try the buddy system. Pair up with one or two other people in the group and always split your check from the group. It's a lot easier to figure out who ordered what when it's between two or three people rather than more. 

If a few people at the table split a bottle of wine, have one person pay for the it and the others give them cash right away or log it in the expense sheet. 

Avoid: One bill for the table. We suggest always carrying cash for large meals. Sure, you won't get points or the comfort of being able to eat now and pay later, but it's easier. 

Keep track of your expenses.

Two of the best ways to keep track of your expenses are in a shared Google document and through an app like Splitwise. Both of these tools are great because they allow everyone in the group to edit, view, and access the same tally of expenses. However, both have their own sets of pros and cons, so decide what works best for you and your friends (or use both). 

We like Google documents and sheets because they are a convenient (and transparent) way to keep track of expenses and budget limits. It's helpful for not only budgeting and balancing expenses, but also for planning time, keeping track of notes and confirmation numbers, tips, possible tours, hotels, activities, meals, and more. It's a lot easier than a multi-way Skype call every five minutes. As you plan, keep a section that lays out the budget limits, and put the most organized person in charge of updating the sheet as things are finalized. Alternatively, you can assign different colored text to each person, so if there's ever a question, you can easily track who made the entry. Some downsides to Google documents include how quickly they can become disorganized, how simple it is to accidentally erase entries, and that it's not always easy to read or edit on your phone. 

Splitwise is a lot easier to manage. You create a group inside the app and can easily log expenses, including who's owed and who owes. It also allows you to split things in percentages or amount, upload images like receipts, set group expenses, and even itemize your tabs. All the while, the app gives the user a running tab of who owes what to whom. At the end, the user just pays one lump sum that gets evenly distributed among their debts. What's better, it will even send friendly reminder emails on your behalf, so you can avoid the awkward conversation. However, it's a relatively new app and there have been some reported problems with tallies and incorrect separations between groups and individuals. 

Pro tip: Always keep your tabs in the local currency (a.k.a. the currency used to pay), if possible. This ensures that you're keeping tabs immediately and makes for an easy tally at the end of the trip. Plus, the exchange rate won't be so incredibly different by the time you settle up that it should make a difference. 

Avoid: Verbally keeping tallies or settling tabs by paying it forward or back. You may think you'll remember later, but you might not and it's best to have zero confusion. Even when written down, these transactions make everything more confusing in the end. 

Remember to settle all tabs.

The trip is over, tabs have been settled, and now it's time to pay. Hopefully, you've all agreed on a time frame in which to settle debts between each other. If you can't decide, know that the sooner the better. We recommend using digital distribution like Splitwise, Venmo, or PayPal, but you can do it the old-fashioned way with cash or the old, old-fashioned way with a check. Just be sure to pay people back (or have a good reason why you can't), or you might not be invited on the next group trip!

If you're still a little nervous about all of this, and want to avoid the potentially awkward "you still owe me money" conversation, don't worry. Book a group trip at an all-inclusive resort or on a cruise where everyone can be responsible for their own costs in one lump sum and are set up with their own accounts for extra purchases. 

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