Group trips are awesome! I absolutely love having the privilege to travel with groups of friends around the world, they are almost always my favourite trip of the year! However they can be difficult to organize and tensions can sometimes run high. As I’ve mentioned before, I think the most difficult part of any group trip is finances. Who is going to keep track of finances? How much are you going to spend? Finances need to be discussed whether you a travel with a group of friends or with a significant other. Too often money is a taboo subject that is avoided at all costs, but not talking about your group trip finances could ruin your trip and your relationship.

Finances should not dominate your trip, but you also don’t want there to be any lasting tensions because of disagreements over money. While everyone should pay for their own trip there will almost certainly be shared expenses throughout the trip. How you handle these costs will depend on who you are traveling with, for how long and where you are going. Make sure you talk about how your group will handle pre-trip costs, on trip cost, individual costs and shared costs. Here are 4 different ways that you can manage your finances on your group trip.

Sole Proprietor

Essentially a financial dictatorship. One person pays for all pre-trip costs, tracks all the finances throughout the trip and everyone else pays back the ‘dictator’ at the end of the trip. All individual costs are paid for by individuals, but shared costs are paid for by one person. This makes it easier to track finances and make the math of who owes who money easier. However there are a lot of disadvantages to this method that you should know about if you plan to use it.

There are a few different ways that you can do this and I’d suggest using this method in addition to one of the other methods on this list. You can act as a sole proprietor for just the pre-trip costs and get group members to pay you back before even going on the trip. Or you could decide on certain ‘areas’ like accommodation and transport that are covered by the sole proprietor while more flexible items like group meals are considered individual costs. 

I think this is actually the simplest way to deal with money on a group trip and usually leads to the least amount of financial disagreement. Largely because you don’t have to discuss finances that much on the trip itself. I quite often use this method on group trips that I go plan, particularly for pre-trip costs. However it is not the best method for everyone.

Advantages

• Low effort  – Generally with the sole proprietor method you don’t really need to talk about finances on the trip. Everything is either paid for beforehand or afterwards. This means less time wasted trying to divide a bill and less possibility of an argument arising. 

• Most Accurate – I think the sole proprietor method probably results in the most accurate representation of shared finances spent throughout the trip. Generally you have the cleanest record of the money spent. I have two credit cards so when I travel I put all group costs on one card and then individual costs on my other. That way at the end of the trip I can just look at the bill for that one card and I have an exact representation of all group costs throughout that trip. As all costs on that particular card are shared equally it is very easy to divid it and get an accurate representation of how much people owe me.

Disadvantages

• Sole responsibility – All of the financial responsibility falls onto one person, if that person is not responsible enough or hates tracking finances it can cause tension. Personally I like finances and track my finances all the time not just on a group trip. Therefore being the sole proprietor on my group trip feels natural and is no extra pressure. In fact I think I would have more difficulty if I was expected to not track finances! However that is me. You do not want to force one person into the role.

• One sided error margin – However you organize your group’s finances there is a possibility of miscalculations. Your group trip will go much smoother if you all agree that a margin of error is acceptable. However with the sole proprietor method any miscalculations disproportionately affect the sole proprietor. That means if they make a mistake the sole proprietor will almost certainly be out money rather than share across the group. I do think that it is the most accurate method, but the mistakes can be more costly.

• Possibility of Losing Track – As most people on the trip are not actively tracking their spending it becomes easier for them to lose track of what they are spending. They could get surprised by a big bill at the end of the trip. If you do use this method make sure that everyone as agreed on approximate price of the trip and has a general idea of how much things costs.

When to Use ‘Sole Proprietor’ 

• When there is a lot of trust in the group  – Are you going on a trip with a bunch of people you just met? Yeah don’t use this method. Only use this method when everyone in the group is willing to trust the dictator to accurately keep track of money. Only use this method when the sole proprietor trusts the people in the group to pay them back. The sole proprietor fronts the risk, trust between the group member is essential to minimize that risk.

• If the sole proprietor has access to money – Almost certainly this method will result in a delay between when the sole proprietor spends the money and when they receive it. Do not use this method if the sole proprietor does not have the money to withstand that gap. As a sole proprietor never lend out money that you need back, remeber it is still a loan and that comes with risk. Personally I collect a lot of travel rewards from my credit cards and that makes the gap between when I spend the money and when I get it back worth it. 

• If the sole proprietor is willing – As I mentioned above you do not want a reluctant sole proprietor, no one will enjoy that. 

• When costs are similar  – The sole proprietor method works best when costs are relatively the same throughout the group. Things like AirBnB or rental cars are going to be the same cost for everyone in the group and are good types of costs for a sole proprietor to control. If costs are going to be divided unevenly the math for a sole proprietor is too difficult.v

Group Kiddie 

A kiddie is a bundle of cash that is used to cover all shared expenses. Everyone contributes the same amount at the start of the trip and then any left over money is distributed equally at the end. You pretty much have to use it in partnership with another method as it is all cash. It can be a very convent and easy way to regulate group spending, but has its limitations.

Advantages 

• Low effort  – You don’t really have to think about finances, there is no discussion, no possibility for an argument. No one has to track finances in order to see who owes who money.

• Shared margin of error – If one person orders a dinner $2 more than someone else it doesn’t really matter as it is shared throughout the group. 

• No surprise bills – People have to contribute to the kiddie in cash at the start of the trip and possibly top it up throughout the trip. This means that they have a vague idea of how much they are spending, but don’t have to worry about tracking it. They are not going to get a bill at the end of the trip that is way higher than they anticipated. 

Disadvantages

• Cash Only  – I guess theoretically everyone could transfer money to one person’s card and have a digital kiddie, but that has its own difficulties. Normally kiddies are cash only and there is generally a limit to the amount of things that can be bought in cash on a group trip.  

• Sole cash responsibility – Generally only one of two people are responsible for the kiddie. While it is not exceptionally stressful, it is one sided. What happens if that person is robbed? 

When to Use

• Similar costs across group – You should be only be using the kiddie on shared expensive which are split pretty evenly throughout the group. If you are on a trip where some people are getting more expensive food, first class tickets or upgraded rooms a kiddie will not work.

• Cheap, cash friendly destinations – Noone wants to be carrying huge amounts of cash around and a cheap destination is going to eliminate the need for the kiddie holder to do so. Some destinations have a lot more places that you can spend cash. A group kiddie was perfect for the Camino as all meals, wine and accommodation was pretty much the same and very cheap. Plus it meant that only one person had to get their wallet from the depths of their pack!

Even Splits 

There are no group costs, everything is an individual cost. Split every meal bill, ticket and accommodation cost at the time you pay for it. Every time you have to pay for something together, pay up immediately or keep track of who owes who money. There are different apps that can help you keep track of who owes who money, but it can become quite difficult to keep track.

This is the method that almost every group falls into naturally and it makes sense, it is the lowest risk method. However it can get tedious after a while. When it is paired with other methods it can work well, but it is a lot of work. I think most groups fall into this method because they do not want to talk about finances before the trip. If you don’t talk about finances before the trip you will be talking about them constantly on the trip. 

Advantages

• Low risk – As everyone is keeping track of their own finances there is low to no risk that someone will end up paying more then their share or not get paid back.

Disadvantages

• Tremendous amount of work  – Your destination and trip style will all change how much effort it is to split every bill, but it will be effort. It is probably the hardest method of group finances to keep track of as you have to do it constantly.

• Many opportunities for disagreement  – You will have to talk about finances throughout the entire trip. Was someone short a few dollars at the last attraction? Did so and so get this meal or that one? Essentially every time you have to talk about finances there is a possibility for a disagreement. Even small disagreements can add up and create tension. 

When to use 

• Smaller groups  – The more people in your group the more tiresome this method becomes. Trying to split a dinner bill between 3 people is not that much effort. Splitting a dinner bill between 8 or 9 people is a lot more hassle. 

• Trips with lots of individual or unequal costs – Some trips have a lot of shared costs like rental cars, AirBnBs, guides etc. While other trips have more individual costs like bus tickets, or hotel / hostel rooms. Dinner bills are the perfect example where even splits work pretty well, although it can be tiresome. However trying to even split AirBnB costs at the time of payment is difficult, someone has to put down the deposit. More expensive destinations often have more uneven costs.

• New or untrusted groups – This is the lowest risk method, you do not have to wait for someone to pay you back, worry if someone is constantly spending more or taking advantage of group funds. If you are at all concerned about your group member this is the best method. If there is any history of financial tension or disagreements in the group protecting yourself should come first and this is the best method to do that. 

Areas of Control / Group Tracking 

Similar to a sole proprietor except that every person in the group is responsible for one area. I.e one person tracks and pays for all of the accommodation costs, another person all of the transport costs, one all of the ticket and activity costs and one all food costs. Decide before hand on how you are going to divid the costs. At the end of the trip you join all of the costs together and figure out who owes who money. On a longer trip you could do this ‘evening up’ process every week, month or whatever cadence you decide.

Advantages 

• Shared responsibility – No one person has all of the responsibility. One person cannot be blamed for losing the kiddie and no one has to take full responsibility of all the finances.

• Shared margin of error – People will make mistakes, but if you are sharing the responsibility of finances throughout the group the mistakes will most likely have minimal impact. The mistakes probably even out in the end anyways. If your group is ok with a few rounding errors it will make everyone’s life alot easier.

• End of trip ‘bill’ is smaller and not a surprise – If you decide to divide up the expensive on the trip you will still have some people paying more then others. However because everyone has contributed to the cost of the trip the amount owed between people will be smaller and not a surprise.

Disadvantages

• Difficult math at trip end – At some point your going to have to combine everyones ‘area’ and that might be complex. Different people will owe different people money and sometimes figuring that out is stressful and can cause tension. However it will likely be at the end of the trip and good spreadsheet or app can help make it simpler.

When to Use 

• Long Trips – I think this is the best method for longer group trips. Splitting every bill gets tiring quickly and a kiddie can only cover so much. Sole proprietor over a long trip is too much responsibility for one person. By deciding on areas of control you kind of get a middle ground between all methods.

Which one should you use? 

Well that depends on your group, your destination and your travel style. Almost certainly it is a combination of them. I change what method I use depending on the trip I am going on, but I normally use a combination of sole proprietor for pre trip costs and a combination of all other methods while on trip.

What every method you use I think it is incredibly important that you talk about how you are going to deal with finances before you go on your trip. Having an agreement on how you will handle group trip finances before actually going on the trip limits the risk of any financial disagreements and will help you have a great trip. 

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