Determining a Travel Budget
Creating a budget for long term travel can be tricky and often nerve wracking. Your mind races with questions – what is enough, what if I run out, what if I’m making a mistake?
Rest assure, those are all valid concerns – and no, you are not making a mistake! If you are willing to get serious about minimizing some possessions and be creative about making and saving money, then some of those concerns will be soothed.
Remember that travel does not have to equal spending loads of money, though it certainly can. With some planning and motivation, travel on a shoestring budget is a very reachable goal.
An extensive trip savings timeline is going to look different for everyone, dependent on salary, debts and bill, how much you cut back, and which world destinations you want to travel to. While it may only take some aspiring nomads several months to reach their goal, it may take others a couple years; so there is no set time line for everyone. The important part is that it is possible.
Deciding on the length of travel you’re aiming for, which areas of the world you’ll be spending most of your time, and what level of luxury – shall we say – you are most comfortable with, is the first step.
For instance, three months in Scandinavia is going to look a lot different cost wise than three months in Southeast Asia. A budget for three months in Australia may look similar to one for several months in South America. A two week luxury trip to Fiji is, of course, going to look a lot different than a two month working holiday in Eastern Europe.
Once you’ve established these baselines, research travel resources and personal blogs to create a ballpark idea of how much you want to have saved. There is a seemingly endless sea of information on the internet for every type of traveler. No longer do we rely on expensive pre planned travel packages, but we truly can create our dream trip.
One book that helped immensely in our planning is How To Travel The World on $50 a Day. The author gives an overview of generally how much a budget traveler should anticipate spending in different areas of the world. Using resources like this, you can figure out how large or small your funds should be.
Furthermore, if you are interested in working holidays – whether it’s teaching a language abroad, a position as an au pair, or laboring on an organic farm – then you can likely lower your savings goal a bit. Many of these opportunities will often provide lodging and food for your efforts – but of course always do your research on the specific program or job you are interested in. These are also great opportunities to immerse yourself in the local culture.
Staying in hostels, camping, and couch surfing are all great ways to keep lodging costs to a minimum. Cooking meals yourself will greatly reduce food costs in the more expensive countries. If you are open minded and willing to sort of bum it a bit, then long term travel becomes far more affordable.
Another aspect to consider is how comfortable are you with finding unplanned work while traveling. If the prospect of being creative and thrifty to make money on the road is acceptable and exciting to you, then a strict budget plan may not be as necessary. On the other hand, if you need more security and don’t want the pressure of finding work, then you will want a cushier savings fund.
Figuring out a budget that works for you and your trip is really about knowing yourself as a person, and deciding what your travel goals are. One person may get by just find on $3,000 for six months in Thailand, while another would feel more comfortable having double or triple. So it really entirely depends on where your comfort zone is.
Once you have a general idea of what your savings goal is, then you can figure out how long it will take to reach it based on how much you cut back and how much you can put away each month. There are many ways to meet your goal more quickly, as I discuss in my post Creative Money Making.
To give a real example, Weber and I saved a collective $35,000 in about 9 months for a trip we anticipate to be about a year. We plan to use many travel hacks and stretch our budget any way we can – with an occasional “treat” here and there.
The biggest mistake aspiring travelers make is believing they cannot afford to see the world. Taking the leap is the most difficult part, there will always be reasons to not go or to wait. The truth is you will never feel 100% ready – there will always be lingering questions and concerns – so the best time is indeed now. Forget the excuses, and go for it.