How to Travel the World, One Step at a Time: Step Four–The Budget 1


money

I always get asked how Jeff and I are able to afford to travel as much as we do by people who seem to think we must have secret trust funds back home or a printing press hidden somewhere  in our closet churning out dollar bills. It’s not quite so effortless as that, but funding travel is definitely not as difficult as many people seem to think it is. 

It all comes down to how we budget–in other words, the balance between how we choose to spend money and how we strive to save money.

Good budgeting skills are essential, not just for travel but for life in general. This post is focused on creating a budget specifically for travel, of course, but I still recommend taking a good, hard look at the current way you handle your daily expenses. If you don’t have a budget already in place, then I highly suggest you consider implementing one. Being financially responsible is a necessary life skill, at home or on the road. Jeff and I are only able to afford travel because we manage our at-home expenses wisely enough to be able to save for travel. If you’re unfamiliar with managing your expenses, just type “how to budget” into Google and peruse the results.

Step One–The Decision

Step Two–The Reason

Step Three–The Itinerary

Step Four–The Budget

Step Five–The Booking

Step Six–The Pack

Step Seven–The Trip

Getting a budget in place for your trip is important on so many levels: it gives you an idea of how much money you’ll be spending; provides insight as to areas where you might be able to save money or cut out expenses altogether; and ensures that you don’t overspend when you get swept up in the excitement of the trip upon arrival. Do your best to stick to your budget when you’re on your trip.

Once I have my initial itinerary sketched out, I like to go and research each entry and see how much it might cost. I generally break it down into four five main categories:

Sometimes I’ll put the numbers into a new spreadsheet, other times I’ll keep notes on the itinerary document that I created; but I always try to keep it in the same place so it’s easy to change and add up later.

Transportation

Transportation includes both the costs of getting to and from your destination and the costs of local transport while you are there. Anything that gets you from A to B should go here: cars, planes, trains, buses, tuk tuks, bike rentals, and the like.

I always check the price of plane tickets to my destination using skyscanner.com or other aggregators, then book directly through the airline’s website in order to make sure I’m not spending more than I have to on airfare.

There are also tons of ways to leverage frequent flyer miles and points earned through other methods like credit card loyalty programs to lower the cost of your travel. If you’re interested in that, you can Google search on your own or check out some of my favorite blogs on the subject, like Extra Pack of Peanuts, The Frequent Miler, or FlyerTalk.

It also pays to research the type of public transportation available in your chosen destination. Some places might have special saver passes that can last from a day to a few weeks and allow you unlimited rides on things like trains, subways, or buses. Japan’s JR Pass is a great example: for just under US$300, you get one week of unlimited travel on any of JR’s trains, including the bullet trains. As always, make sure to do your research, though–sometimes you won’t be traveling enough to justify the extra expense of a pass like this; other times it’ll save you a ton. (top)

Accommodation

There are plenty of ways to get cheap, even free accommodation on the road. Jeff and I very rarely stay in hotels, opting for hostels as they are cheaper most of the time. Hostels.com is the website we turn to for this.

We also use Couchsurfing to stay with people for free. This can be hit or miss, though, depending on how far out of the way you’re going, if you’re travelling with a few other people, and how long you’re planning on staying. For a couple of days, though, Jeff and I normally have no trouble finding someone to host the two of us. We have a host in Taipei lined up already for the last four days of our trip to Taiwan this April. Couchsurfing also comes with a bit of a safety warning: make sure you stay with someone who has been reviewed or verified by the website.

There are also things like WWOOF, house sitting, and other trade for accommodation opportunities out there. If you’re going for a while and are flexible with your dates, these could be great ways not only to get accommodation for free, but to immerse yourself in the local lifestyle as well! Again, do your research, because you never know what you might find. Jeff and I have never tried any of these sort of trade for accommodation deals ourselves, but we definitely plan to make use of them (especially WWOOF and house sitting) when we go on our trip around the world starting this fall.

And as with transportation, there are ways to use frequent flier miles and points to get hotel rooms for cheap or for free. Again, either Google search or check out those same blogs from before for more details:  Extra Pack of PeanutsThe Frequent Miler,  FlyerTalk. (top)

Food

Food, for me, is the trickiest thing to budget for on a trip. This is where having a budget in place already in daily life can come in handy, because in theory, you shouldn’t spend too much more on food while you’re travelling than what you spend on food at home. This means that if you spend $75 a week on food at home, you should budget that as a minimum for food for a week on your trip.

Now, this is of course easier said than done, especially if you are cooking all the time at home but are planning on eating out while on your trip. There are plenty of ways to save on food while traveling though, like:

  • Free breakfast: if your place of accommodation offers free breakfast, take advantage of it!
  • Two meals instead of three: skip breakfast and have a bigger lunch or dinner; fill up on a lunch buffet and snack on a piece of fruit for dinner; fill up on that free breakfast if you have it and skip lunch. This isn’t to say starve yourself–just consider rearranging the way your food schedule looks. My favorite method is having a big lunch out and either skipping dinner, cooking it at the hostel, or buying something small from a convenience store–lunch is almost always cheaper than dinner when eating out.
  • Split everything: Jeff and I try to split food as much as we can when we travel. You not only save money, you save more room in your stomach to try other delicious foods!
  • Street food: I love, love, love street food. It’s cheap, it’s delicious, and it’s something you’ll probably never be able to get at a restaurant back home. Always head for the stall or cart with the longest line–that’s an indication both of tastiness and safety.

When in doubt, I guesstimate at about $10 per dinner, $7 per lunch, and $5 per breakfast. If you want to splurge on a really fancy meal–like at a top restaurant in Paris–be sure to take that into consideration as well. (top)

Adventure and Sightseeing

I’m sure guided tours can be fun, but Jeff and I have never booked one ourselves because we prefer to save the money and to get lost on our own two feet. But if you’re someone who likes to go on tours, or if there’s something like visiting the DMZ in Seoul that absolutely requires an organized tour, then be sure to research ahead of time how much it’s going to cost. There are likely a breadth of options, so take the time to chose the one that’s right for you.

Museums, amusements parks, temples, palaces, and other attractions also cost money to get into. Chances are you’ll be able to find out exactly how much online with a little digging. Also be sure to check the schedule for special deals or free entry days for places like museums. There are also probably plenty of free things to do–we found a free walking tour of Tokyo when we went over a year ago when we saw the advertisement for it on our hostel’s bulletin board (another good reason to stay in a hostel rather than a hotel).

Ziplining, scuba diving, four-wheeling, bungee jumping, canyoning, and other adventures will also cost money, and probably a good chunk of it. As with guided tours, do your research and do it well. (top)

Miscellany

Be sure to look into visa requirements for your destination if you’re travelling abroad. Some countries don’t require any sort of visa before arrival; other countries like Russia have a long and expensive process that need to be planned for accordingly.

Travel insurance is also something to consider. Personally, I have never purchased travel insurance for a trip–but we have never gone on trips longer than a week or two. For extended trips, however, travel insurance might be something worth looking into. World Nomads comes highly recommended and is most likely the insurance we will purchase for our RTW.

On the same note of health and safety, do you need any vaccines to go to where you’re going? If not vaccines, what about special medications like malaria pills? Do you need to buy extra of any prescription (or non-prescription) medications you take on a daily basis?

For most trips you shouldn’t need to buy any extra/special gear; but if you are, say, going to bike around the world or camp a lot, those expenses should have a spot in your budget as well. Even if it’s just that you need to buy new luggage, be sure to include that.

The very last thing I budget in is around $50 for souvenirs/gifts, if that. I like to send postcards to my friends and family from where I am–they’re cheap and they don’t take up any room in my luggage–and I keep my souvenirs for myself limited to pictures and memories. Sometimes I’ll buy a pen or a keychain, but recently I’ve been cracking down on buying “stuff.” Souvenirs can be expensive, take up valuable space in luggage, and will probably end up in the trash at one point or another. Likely the souvenirs aren’t even made locally, defeating the purpose of buying them as a memoir of where you’ve been. That’s just my opinion, though, so if you like to buy souvenirs, make sure you add a little more in your budget for that. (top)

Grand Tally

By now you should have a pretty good idea how much your trip is going to cost. I always round up, so if my grand tally is $960, I round up to $1000.  I like to have a little leeway in my budget, just in case, which is why I also add at least $100 for emergencies.

This might be the time when the numbers start to look a little scary. But fear not–if it’s going to be an expensive trip and you have flexibility with when you leave, you can put the trip off and save up for it some more before you go. If not, then look at your estimates and cut some expensive things that you can then add to a later trip: or make a promise to only eat out for a few special meals and then cook the rest where you’re staying; or consider staying in a hostel instead of a hotel; or decide not to buy souvenirs. There’s always a way to make travel affordable–you’ll have to compromise on some things, but chances are those aren’t the things that will make your trip the amazing experience it’s going to be. Remember the reason you’ve decided to take this trip in the first place, and prioritizing will be a cinch.

Your Turn!

What are your favorite ways to save money when traveling?

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Ready for the next step? Click here to continue to Step Five–The Booking.

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