Ahhh, the budget. The most important, frustrating, and confusing part of planning a long term, RTW trip. How do you find this information out? Where do you even begin? How can you possibly guess how much you’re going to spend galavanting around the globe for an extended period of time?
That’s why I’m here, and that’s the point of this new Tuesday Travel Tips series. The last two weeks we talked about RTW plane tickets vs. Buy as you Go and Tips for Buying as you Go, and before that it was Where to Go on your RTW and Why it was that we decided to go on a RTW trip. You now have a pretty firm glimpse into our decision making process. If you’re back for this one, then I am going to assume that you are interested in learning more about this whole process.
So today the goal is to give you the tools necessary to figure out a budget. It’s daunting at first, I know. There is tons of information out there, and it can be dizzying trying to sift through it all to find the information that is important to you. So I’m going to try to break it down as simply as I can, and let you know how we went about trying to estimate a budget for our year-long RTW trip.
Where to find the necessary information
We used a variety of different sources to find per day budget information for countries we planned on visiting. But the most helpful was simply buying a guidebook or going to Lonely Planet’s website and searching each country. While we didn’t know exactly which countries we’d be visiting, we did know that the bulk of our time was going to be spent in South America and SE Asia, so we just checked per day estimations for each country in both regions.
We also read tons of different travel blogs to get ideas on both destinations and budgets. If we read a blog and got the impression that the authors of said blog traveled in the same style as we do, then we would email them and ask specific budget questions. Most people who write about their travels are very forthright when it comes to this (like us, feel free to just contact us directly with any specific country/city budget questions).
Message boards like BootsnAll and the Thorn Tree on LP’s site are also great resources. Both have specific boards for RTW or long term travel, and there’s a wealth of information on both, so I encourage you to look there as well.
Analyzing that information
On LP’s website, there is usually an estimated per day cost for traveling in each country (they curiously don’t have this for all countries though). Let’s look at their Thailand practical information page for an example. Under costs, it says “Those on a budget should be able to get by on about 600B to 700B ($20-$23US) per day outside Bangkok and the major beach islands. This amount covers basic food, guesthouse accommodation and local transport but excludes all-night beer binges, tours, long-distance transport or vehicle hire. Travellers with more money to spend will find that for around 1500B ($50) or more per day life can be quite comfortable.”
So let’s analyze. They say backpackers should be able to get by on about $20US/day. If you want to travel in comfort, it’s more like $50US/day. That’s a pretty wide range, and the difference adds up quickly if you’re traveling for a long period of time. So what did we do? We typically chose the middle ground in these circumstances. After reading up more on Thailand through other travel blogs and message boards, and trying to find numbers from other travelers, we felt that an average of $70US/day (total for two) would be good, especially considering that we planned on spending quite a bit of time in Bangkok and the islands.
The most important thing to budgeting, in my opinion, is to aim high. Chances are that you will be saving for at least a year, if not multiple years, to be able to afford to quit your jobs and travel around the world for an extended period of time. By aiming high and overestimating what you’ll really need, you give yourself a nice cushion. Sure, it may take you a few more months than you envisioned before you’re ready to hit the road, but believe me, it’s worth it to have the extra bit of cash.
Other expenses to consider
There are other expenses to consider besides your airfare and per day budget, but most have to do with pre and post-trip costs.
If you’re heading to places like South America, India, Africa, or Asia, you are going to need vaccines. Which vaccines you will need really depends on the place you’re going and how cautious you plan on being. I will write a future post going over vaccines. Unfortunately, costs of vaccines are not cheap and vary from city to city (and within each city as well-shop around). So do some research because this could be another $1000-$2000US you’ll have to part with.
Again, there will be an entire post dedicated to gear in the future, so I won’t delve too deeply here. But keep in mind that packing, especially for first timers to long term travel, can be a major headache. There’s all types of specialized travel gear out there you’ll want to at least consider. Most is also expensive. What about a backpack, suitcase, or bag? What do you plan on bringing? Do you already have something? Nice backpacks are not cheap, but you don’t want to go cheap here. Your back, neck, and legs will thank you for spending that extra $100 on a nice pack. Keep all your gear in mind come Christmas and birthday time. Before our trip, all I asked for was stuff related to our trip, so that certainly saved me money.
Again, lots to talk about here, so an entire post will be dedicated to travel insurance as well. Americans tend to freak out about travel insurance because the health insurance in our country is such a disaster. Just to be forthright now, we did not get a fancy insurance policy. We got a catastrophic policy that would have gotten us home safely in case of emergency.
For anything minor, like sickness or accident, chances are it’s just cheaper to go to the ER or doctor in whatever country you’re in. It’s not like the US, so you won’t get raped for going there with no insurance. We went to the ER in Prague, and for both of us to see a doctor and get antibiotics, it was cheaper to just pay than it would have been at home with insurance and just having to deal with our co-pays. Yes, insurance in the US is an absolute joke, and we should be ashamed of ourselves, but that’s for another day.
Most long-term travelers are going to come home at some point, so you really want to have some money for your return. Are you going to have somewhere to stay when you get home? Are you going to have transportation? Jobs? What are your plans? All need to be considered.
Unfortunately, I am a dumbass and didn’t back up our budget spreadsheets for the entire second half of our trip, and I lost them in a computer crash after we got home. Inexcusable, and I’m still pissed at myself. So I honestly don’t have the EXACT numbers, but I do know that overall we were right on with what we hoped to spend. I do have exact numbers for our entire S. America leg.
Our goal for funds before we left was to have $60,000US in the bank. We hoped to spend around $40,000US on travel expenses while gone. This included all flights (except our initial one which was already paid for), and all other travel expenses. We also continued to pay our student loans while gone, which was about $600US/month, or $7200 for the year. And we wanted to have at least $10,000US when we returned home. This gave us a bit of wiggle room, plus we got some extra income while gone that we hadn’t planned on (great tax return and some inheritance from my Grandpa, who passed away unexpectedly a few months before we left).
Here were our goals for each country before we left based on our research:
- Peru- $70/day
- Bolivia- $50/day
- Argentina- $80/day
- Chile- $100/day
- Colombia- $80/day
- Thailand- $70/day
- Laos- $50/day
- Cambodia- $60/day
- Vietnam- $65/day
- India- $65/day
We also added some miscellaneous costs in for certain legs. We hiked the Inca Trail in Peru, and we knew we had a $500US balance to pay when getting to Cusco, so we had a separate miscellaneous column for things like that. We did NOT put those in our per day budget. Spanish classes in Argentina and hiking Torres del Paine went into this category, and an internal flight that we took in Argentina went in our miscellaneous column.
Our actual budget
All told, in 171 days in South America, excluding flights but including all miscellaneous expenses, we spent $14,982.
We then spent another $4055 for flights, but that included some for our next leg. We decided while in S. America to go to New Zealand, so that price includes the flights from S. America to NZ and from NZ to SE Asia. We flew Santiago to Bogota, Bogota to Los Angeles, and LA to Auckland. We also flew Auckland to Christchurch, then Auckland to Bangkok to start our SE Asia leg. All those flights are included in that $4055 price.
All added up, we spent $19,037.18 in our first six months, setting us up perfectly for the second half.
Next week we’ll get back to the planning of the actual trip and talk about which route to take. I’ll go into everything you have to consider when planning a trip of this magnitude. High season, low season, weather patterns, festivals, and many other things all have to be taken into consideration when deciding when to go where. So be sure to check back!