Value engineering is a term used when you seek the best functional balance between cost, reliability and performance of a product, project, or service.
In my opinion, backpackers are expert value engineers. We always look for the cheapest and the best value for the overall trip. There are common industry standards that are known to be the cheapest, but every now and then, a bit of value engineering can prove to us that the cheapest is not always the cheapest.
Cooking vs. Restaurant/Fast Food
It is often recommended to save money by cooking instead of eating at a fast food or local restaurant. This can be true sometimes, but not always. If you’re staying at your accommodation for just one night or two, chances are that your groceries could cost as much as just having dinner at a cheap restaurant – since you have to buy all the ingredients, which are mostly packed to serve for more than one or two dinners. Also, if you’re in the tourist center, small supermarkets can be expensive.
On the other hand, if you visit big supermarkets or big chain supermarkets (especially if outside of the city center or tourist spots) prices can be significantly lower. But, same thing applies to local restaurants.
Hostels vs. Hotels
Hostels are extremely popular among backpackers because of their low prices, but hostels can cost as much or even more than a hotel. If you’re traveling on your own, chances are that a hostel will be cheaper if you book a bed in a shared room or even a single room. But, if you’re more than one traveler, then it’s good to consider cheap hotels too since hostels charge per person, instead of per night like hotels do. When you do the math, you’ll be able to decide if a hotel is actually cheaper than a hostel. In addition, hotels discounts are commonly found online, like for example, Hotels.com discount code, vs. hostels discounts that are not that widely available.
Travel on your own Vs. Arranged Tours
Us backpackers often like to do our travels on our own. Plan them, arrange transportation, and guide ourselves once there. Often times this can work extremely well and be really cheap, but some times it is either not logistically possible or more expensive than if hiring a tour company that specializes in budget travel – like for example, the time I organized a tour to The Wolf’s Lair or my Kilimanjaro Hike.
In those two examples, it was more logical for me to get a so called “budget holiday” because of the transportation logistics, location of the sights, and because the final overall price would have been higher if I did them on my own.
Foreign Exchange vs. Withdraw at ATM
This one is very important to compare if you want to save money, especially on long-term travel. When you exchange money abroad, you never get the real exchange rate. It’s always lower. In addition, some exchange places charge a commission on top of it. So, if you change a high amount of money, in the end you will end up losing a significant portion of your money’s value.
On the other hand, there’s the option of withdrawing money from the ATM or Bankomat. Usually, for foreign withdrawals, your bank will have a transaction fee – usually around $5 – and in some cases the foreign bank will also charge a fee.
In the end, compare both options fees and select the one that will cost less for you.
Usually, when withdrawing at an ATM, I recommend getting the maximum amount of money possible to make the fee “worth it”, but when you only need a bit of money, it is usually better to exchange.
Overland Transportation vs. Air travel
When traveling between bordering countries or cities that are easily connected by overland transportation, we usually come to think that the overland option will always be cheaper than the flight option – which is usually considered to be expensive.
These days, with so many budget airlines in Asia, Europe, and even the USA, sometimes traveling by air can be much cheaper than traveling by land, and it can even save you some time.
On the other hand, long overland journeys can be interesting because you “see more” of the country and if they are overnight, they can save you money on accommodation.
These are just a few options that show how varied costs in the travel industry can be, and that it is always important to do your research – and do a bit of travel hacking – if you’re into saving money while on the road.