Should I include flights in my daily budget?

No. Flights are a sunk 'getting-there' cost. Calculate them separately so they don't skew your perception of how much you have to spend on the ground.

What if I end up under-budget?

Don't spend it just to spend it. Keep the excess as a 'bonus' for the last two days of your trip, or put it back into your savings for your next adventure.

How to set a realistic daily travel budget

To set a realistic budget, calculate your 'fixed' daily costs like accommodation and transport, then add a 20% buffer for unexpected expenses and social spontaneity. Track your spending in a simple spreadsheet to ensure you aren't exceeding your total trip allocation by mid-trip.

Define your non-negotiables. Identify your fixed daily costs. This includes your nightly accommodation rate (plus taxes), mandatory transit (like a rail pass), and pre-booked tours. If these exceed 60% of your total daily target, your budget is too aggressive.
Calculate the 'Life' costs. Research the cost of a mid-range meal, a coffee, and a beer or water in your destination. Multiply these by your expected frequency of consumption per day to get a baseline for food and drink.
Build the 20% safety net. Take your estimated daily total and add 20%. This buffer covers the 'oops' moments—an expensive Uber because it's raining, an extra museum entry, or a lost pair of sunglasses.
Adjust based on your 'Travel Style'. If you are 'Budget' (hostels/street food), aim for $50/day. 'Mid-range' (hotels/one sit-down meal) is $150/day. 'Luxury' (boutique hotels/daily tours) requires $300+/day. Adjust your style to match your total savings.

Should I include flights in my daily budget?: No. Flights are a sunk 'getting-there' cost. Calculate them separately so they don't skew your perception of how much you have to spend on the ground.
What if I end up under-budget?: Don't spend it just to spend it. Keep the excess as a 'bonus' for the last two days of your trip, or put it back into your savings for your next adventure.