For budgeting purposes, I like to use the government M&IE rates as a baseline. They vary by city & country (and even month), but I find its a fair estimate for lodging & meals to use as a starting point. Then I generally add about $100/day for local travel and misc expenses and go from there.
So for visiting London it would roughly be $950/flight (assuming travel in May or June) and estimate $573/day total for lodging & meals, and then another $100/day for misc. expenses (local travel, tickets, souvenirs, etc).
So the total would be:
$1900 + 8*573 + 8*100 = $7284 total for 2 people.
So that's what I would save prior to taking the trip. Then I would go on vacation and have the time of my life, and if it ended up being less than that, I'd put the extra in the "new car fund" and if its more then pull it from the "new car fund". (I haven't purchased a new or new-to-you car in 10 years, so its really just a slush fund)
Usually we underspend, mainly on portion budgeted for meals because we don't have huge appetites. Generally pretty close for airfare & lodging because we like to stay in nice places.
In 2014 we've toured 3 different countries, with 2 other CONUS trips completed & 2 more planned. Next year I think we're going to visit Spain & Portugal, but then we'll slow down the travel to start a family. I don't want to be attending PTA meetings when I'm 58 - that's retirement time!
I usually start a framework about 10-12 months ahead of time so we can book international travel about 8 months ahead and have everything paid off/saved before we leave for the airport.
waht
srsly, stahp.
a *good* place to stay in london for 2 will cost ya $250 a night, possibly less for a week.
eating in good restaurants (gordon ramsay's eateries, for example) can cost around $200/ meal for two.
you probably won't go there every day, since thats not really what london's all about.
for example, going to eat at camden market ( a far better foodie experience) and really going wild will cost you fifty bucks. for two.
going to borough market and splashing out on the most expensive pata negra and other imported weirdness will maybe cost a hunner bux for two.
this ain't NYC where a cronut is $20.
so, having seen your budget, i would like to retract my earlier statement that london is expensive and instead replace with "come to london, it's dirt cheap".
still, if i had 5 grand for a holiday, i would WAY rather go to the south of italy (or some other quiet rustic village) and rent a villa, enjoy the local food, and comeback with 2k still unspent.
you can easily live two months in croatia with that money. you could say at four star hotels in paris for that and still have cash left.
heck, you can probably find a good B&B in london .. srsly, use the google-fu.
http://www.londonbb.com/homes/kennington-sancroft-street/
kennington is a nice area, i lived there; this double is £75/night, thats a hunner-fiffy bux. for two.
probably less for a week.
transport is almost exclusively via tube (thats the subway for you foreigners), via Oyster cards, which puts travel at the most at forty bucks a week, each. add a cab ride each night for a whopping ten pounds each night.
travel from and to airport will also be by tube.
aside from the two aforementioned, borough and camden, there's a few other places to go have street food, which is what you will probably be having the most as you go around the city.
having lived a few years in the states, i doubt you will find london interesting on the foodie side. we have primarely small establishments, and here a fruit smoothie is considered "fancy".
btw, i would avoid the early months for london, it tends to be quite "wet".
i used to travel a lot. i have visited.. hmm.. italy, croatia, the US, morocco, spain, portugal, brazil, mexico, dominicana, france, the UK, the canaries, netherlands, austria, jamaica .. canada.. and thats it. i think.
some more than once.
oh yes and belgium.
anyway, the point is, i wouldn't go to london. BUT, if you want to , sure. it will not cost you seven grand.