When you travel abroad, things can be a lot cheaper than they are here—including hotels. If you’re not sure what you should be spending per night in other countries, this equation can help give you an idea.


To start, you need to calculate what Sam Dogen, the Financial Samurai, calls your Natural Hotel Expenditure Rate (NHER). Add up all of your living costs, including rent, mortgage, property tax, and utilities. Now divide that by 30.5 days. That’s your NHER. This rate is what you could potentially spend on hotels when you travel abroad without breaking the bank. Your dollar can change value as you travel, however, so you need a way to compensate for that. Dogen suggests a simple way to do that is by comparing the price of something that you can find almost anywhere: a Big Mac from McDonald’s. Here’s an example of how you’d calculate that, assuming a $180 NHER:

For example, a Big Mac costs $2.5 in Kuala Lumpur and $3.8 in San Francisco. Divide $2.5 by $3.8 to get 66%. Now multiply $180 by 66% and you get $118.80.


That means if you have a $180 NHER, $118.80—or under—is a good rate to shoot for were you to travel to Kuala Lumpur. If your NHER seems pretty low, like mine, it probably means you rent and that hostels might be a better choice for your international travels most of the time. Still the Big Mac Index is an interesting way to compare, regardless of what you might need to pay for. You can learn more about the calculations at the link below.

How Much to Spend On a Hotel While Traveling Abroad - Calculate Your Adjusted NHER | Financial Samurai