Budgeting for long-term or career break travel is not an exact science. It can be challenging and time-consuming, not to mention, well, boring. There are so many things to consider and so many variables. And who wants to work on their travel budget when there’s all the exiting travel planning to do! But budgeting is a necessary evil, and in order to make your travel dream a reality you have to do the homework.
When we started planning for our career break travel, we wished we could have just found a definitive figure, or even a rough estimate, that showed us how much it would cost to travel the world for a year. But of course it is not that easy, and even getting to a ballpark figure can be challenging. Luckily there are many fantastic online tools (see bottom of page) that can help you get started.
The biggest impact on your travel budget and how much money you will need are your travel destination/s, the way you choose to travel and the length of your trip.
Travel budgeting tips:
- Start by thinking about what is important to you. Are you absolutely set on going on a round-the-world trip when saving up for one would take years? Or do you just want to travel and go much sooner? If you are aiming for a small budget, stick to one or two regions (or even continents). If you stay in one region, let’s say South East Asia, your budget will be drastically different to someone on a round-the-world trip.
- How long would you like your trip to be? Maybe a full year of travel is not quite within your reach. A six- or even three-month break will give you a chance to have a decent breather (be warned though: it’s likely you will want to keep going once you’re on the road).
- If your travel budget goal is still unrealistic trim your plan down further. Consider cheaper destinations within a region, covering less ground and slower travel to bring your budget down. Long-term travel doesn’t have to be about covering as much ground and seeing as many countries as possible. You can easily stay in one place for a month and see something new every day.
- Your preferred ‘style’ of travel will have a massive impact on your budget. Are you comfortable traveling as cheaply as possible (i.e. staying in hostels or couch surfing, eating as cheaply as possible) or do you want more comfort?
- You need to gain an understanding of average costs in the destinations/regions you’re planning to visit to be able to budget appropriately. Utilize tools around the web to get an understanding of average costs in different destinations.
- What kind of activities or tours would you like to do or participate in? If you want to e.g. do a lot of scuba diving you need to factor that into your budget as these sort of activities will bring up your expenses significantly.
- Over-budget to be on the safe side (and then feel really great when you go under budget on the road!).
- Moving around is expensive (duh). And I’m not just talking about flying or taking a bus or train somewhere, but also getting to the airport/station from your accommodation. It all really adds up.
- Avoid popular destinations in peak periods. Peak travel seasons and holidays skyrocket costs. We ignored this and spent the northern hemisphere summer in Europe, thinking it couldn’t be THAT bad. Was it gorgeous and did we have a great time? Absolutely. But it’s not fun or easy trying to find reasonably priced accommodation when there are millions of others trying to do the same. Also finding reasonably priced trains or airfares, especially last minute, was practically impossible.
- Don’t forget to take into account associated costs such as travel insurance, storage costs, vaccinations, visas and subscriptions for media, entertainment (e.g. Netflix), VPN etc.
- Set aside some money for unexpected extra costs such as minor medical expenses. I had to see a doctor in Nicaragua to get a grain of sand removed from my eye that had been lodged there for a week. As far as doctor’s visits go it was inexpensive at around US$50, however that amount was under our travel insurance excess and hence wasn’t covered.
- Budget for replacement or additional toiletries, medicine and gear/clothing on the road. I’m sure we’ve gone through liters of sunscreen by now. You may also need to purchase replacement gear or clothing, or new items because of unexpected changes in weather for example (thanks for the snow storm in September, Montana…).
- It’s also a good idea to budget for the occasional splurge, like a fancy dinner here and there, or going skydiving, diving with whale sharks or whatever takes your fancy.
- Don’t forget to factor in the money you SAVE by not being at home. For example not renting a house, not having a car, canceling your gym membership and not paying for water and electricity bills. For example just the amount we pay for a rental house in Sydney for a year would easily keep the two of us traveling in comfort in South East Asia for well over a year.
- Make sure you have a decent ‘buffer budget’ for your return. We have a separate return budget which is absolutely off-limits whilst we’re traveling. This is particularly important if you are in between jobs and need to look for a new job when you return.
Once you’ve managed to come up with your travel budget estimate, it’s time to get serious about saving for your trip. Depending on what kind of travel you’re planning to do and what your income is like, saving a sufficient amount may take a long time. We saved for about two years before we took off on our career break.
- Have a clear and realistic savings goal and timeline in mind. Work out the maximum amount you can save each month and how long it will take you to reach your travel budget goal.
- Open a new account specifically for your travel savings and commit to depositing a set amount to that account from each pay check.
- Start keeping track of your expenses every day. This will:
- help you to get used to tracking your expenses on a daily basis (as you will want to do this once you’re on the road); and
- help your saving efforts as you get to see exactly what you spend your money on. This in turn will most likely result in changes in your spending habits and help you save more.
- Small changes in your spending habits can have a surprisingly big impact on your savings. Once you do the math, instant coffee in the office doesn’t taste that bad.
- Stop buying clothing and generally, well, stuff (unless they are specifically for your trip, such as good quality luggage). You’ll just have to get rid of it all or put it in storage. This is an obvious one but I had to list it as it was actually quite hard for me to do! Like most gals I love fashion and would usually get a couple new pieces of clothing or accessories every month. Let me tell you this habit was not that easy to break.
- Be resilient with and committed to your savings efforts. It may take a long time to save up, but remember that it will be worth it. Do not give up! It’s all about prioritizing your big trip.
Helpful travel budgeting information and tools:
- Round the World Expenses details: Fantastic round the world (rtw) budgeting tool and actual expenditure details from the writers of ‘Married with Luggage’ blog. Note: this is a very lean budget and has been accomplished by a combination of ‘slow travel’, housesitting and ‘living like a local’ (i.e. staying and eating outside of tourist centres). If slow travel is not for you and you want to stay right where the action is, you won’t be able to get anywhere near these kind of figures. But it’s a great demonstration of how cheap long-term travel can be.
- A great excel tool for budgeting and also some excellent tips from Eliot Peper. Just download the spreadsheet and start budgeting away!
- Budget Your Trip: Average travel costs from different destinations around the world. Good for general travel budgeting purposes.
- Handy online budget worksheet templates.
- Lonely Planet’s info on how to budget for your travels.
- Budgeting software from Mint.
- Expense tracking app from iXpenseIt.
Budgeting, saving and keeping track of expenses do not sound fun or exciting, however once you dwell into the world of travel finances they will soon become second nature. By planning ahead and tracking expenses as we went, we were able to extend our travels for three months. Even though the thought of putting together a travel budget might sound like a bore, it’s a crucial step and will also make your travel planning a lot more tangible.
Once we had figured out (or, half-guesstimated) our target travel budget and how long it would take us to save up, we also had a really good idea of a potential timeframe for our career break. What was a bit elusive before, was now attainable and we had a clear idea of exactly when it would be possible for us to take off, financially-speaking anyway. So yes, travel finances are boring to most of us – but remember it’s all about making your travels actually happen.