“How much money did you save?” Almost everyone asked this question when we told them we’d be traveling for a year. I don’t blame them: It was the first thing I looked for when researching round-the-world travel blogs (see for example BootsnAll, Married with Luggage, and The World Is Not Flat). In many people’s minds, the cost of long-term travel is its most prohibitive aspect.
There’s no magic formula for calculating a travel budget or determining how much money to save. But before even thinking about dollars and cents, we found it helpful to evaluate our travel style. That way, rather than setting an arbitrary figure for the total yearly or average daily budgets, we had a convenient starting point.
To determine how much money to save for a long trip, start by asking these three questions.
What type of traveler are you?
Traveling means different things for different people. Some people see long-term travel as an extended vacation with nice hotels in central locations, fine food and wine in restaurants, adventurous excursions, lots of sightseeing, and exotic souvenirs. This is a more expensive way to travel. If you expect your trip to be an extended vacation, expect to save more or not travel as long.
Our goal is to make a home wherever we are in the world, meaning our travel style is not much different than our typical lifestyle: we like having a quiet place to write, to cook meals, eat at restaurants every now and then, visit nature, and explore our surroundings. Every once in a while we like to do something different like take a class or conduct beer-related research.
What type of traveler you are also determines where you want to go. Are you comfortable with a dirtier, rougher, and less air-conditioned environment? Then you’ll probably do okay in countries where the dollar stretches further. If it makes you miserable when a country’s infrastructure doesn’t operate as expected you’ll have a better time in North America, Western Europe, Japan or other more developed (and more expensive) regions with a higher daily budget.
Can you handle the Bolt Bus or are only planes, trains, and automobiles for you? Photo by squirrel83. Determining what kind of traveler you are also includes considering transportation and accommodations. You don’t have to take busses everywhere or stay in backpacker hostels to travel on a budget. But are you willing to? If not, what are your travel limits?
What is essential to your travel experience?
Traveling on a budget doesn’t mean you have to deprive yourself, but it’s important to decide ahead of time what’s essential to your experience. Many people can’t fathom visiting Peru and skipping the Inca Trail trek to Machu Picchu. It makes perfect sense, but you’ll have to save an additional $300-$500 per person.
If you are taking the time to save money, sell your stuff, quit your job, and travel the world, you want to plan a trip that you’ll enjoy and remember, especially if, like us, you want to feel at home wherever you go.
Peter and I could be traveling for much less is we decided not to eat out. If we gave up our occasional lunches and dinners at local cafes and just stuck to supermarket meals and street food, we could probably travel for another few months. But we don’t want to. For us, the trip would not be as memorable if we gave up enjoying a meal out a few times per week.
What can you live without?
Walking through the streets of Baščaršija in Sarajevo, it was difficult to control the impulse to buy handmade copper džezva sets, a pashmina in every color, or a few filigree bracelets. As much as I love indulging in retail therapy, I had decided before leaving on the trip that shopping for souvenirs was an activity I could live without.
Unless you have unlimited resources, you will have to sacrifice some of the things you enjoy doing in order to stick to a daily budget. If shopping is important, consider not only your shopping budget, but the cost of mailing purchases home. You can’t live without shelter, food, and water, but you don’t need to shop, wine taste, go to museums, or out to restaurants. Crossing off unessential activities from your list pushes the daily threshold lower and lower and deciding ahead of time what is not important will help you avoid spending money impulsively.
Be honest with yourself
We like to think we are comfortable sleeping in lumpy beds in a noisy guesthouse in central Bangkok. We like to think we can eat supermarket food for one year. We like to think we can live without hiking the Inca Trail (but have a nagging feeling we’ll always regret it).
Before you do any calculations, honestly evaluate your travel style. The rest of the work that goes into creating and maintaining a budget–creating an itinerary, finding affordable accommodations, tracking expenses, planning activities–can come later.
What’s your travel style? How much did you think about it before creating your itinerary and budget?