Set Your Daily Number
How much will my trip around the world cost? What started as a dream crashes into reality when you dive in and start trying to determine how much money you’ll need to make it a reality. The thought of all the research and budgeting can easily overwhelm you. However, setting this number should not become an obstacle to taking off on your adventure.
Like many of you, when we decided in September 2008 to embark on a trip around the world we had absolutely no idea how much something like this would cost. The one thing assumed is that a trip like this would be outrageously expensive. Our first wild-ass-guess was that a year on the road would cost us $75,000. We used no research or information to get to this number, but since we both arrived at this number separately it seemed as good a place to start as any. This became our very first goal number, and was the first step towards our savings target.
From there we dove head first into planning mode, consuming information from a broad set of websites, blogs, and forums to glean information from those who had done it before. The information that did exist was all over the map and added even more confusion to the process. We found figures as high as $125,000 for a year to as low as $15,000. After a few days of pouring over reports we were only marginally closer to having a better figure for own adventure. There were just so many variables that it seemed the more research we did the more paralyzed we became.
Avoiding Analysis Paralysis
After exploring the problem in depth we discovered a far more useful budgeting technique – the “daily number”. This is the overall average amount you will spend each day on the road. It is inclusive of all expenses you will incur (hotel, flights, trains, meals, alcohol (yikes), entertainment, visas, etc). By coming up with an overall average, you can establish a simple figure to use for calculating your total savings goal and setting a baseline for your journey. It’s a hell of a lot easier to estimate a single day on the road instead of trying to calculate different regional costs, estimate the different flights, food for a year, and what visas you may need. By picking a daily number you also have a great guide you can carry with you when you hit the road and start managing against your budget figure.
We ended up with the figure of $100/day for the two of us, which seemed like a reasonable figure that we could live within based on our style of travel.
Set your daily number early and stick to it as you begin saving towards your dream.
Know You Can Adjust Later On
We have seen over and over people letting the research get in the way of actually taking off. They keep trying to adjust their budget, figure out every single expense to ensure the final figure is 100% correct. The time and stress spent worrying about getting it right becomes more important than the dream itself.
Guess what? Regardless of how much effort you expend determining your budget figure, you are going to get it wrong. And that is ok. The reason is you cannot predict how your trip will unfold. If all goes well, your trip is going to take some amazing and unexpected twists and you’ll find yourself in situations, and possibly places, you never expected. It is this type of adventure that got your excitement going in the first place and makes trying to plan every expense simply impossible.
But there is good news to this state of the unknown. You are still in complete control of your trip because this is YOUR dream. When you hit the road you have a number of levers you can use to change how much you are spending each and every day.
♦ Head to somewhere cheaper – is SE Asia calling your name after 2 months in Europe?
♦ Cut back on meals – while you still need to eat, you can embrace the wonderful world of street carts. Warning: this can become addictive.
♦ Adjust the duration of your trip – who said your trip has to be 12 months? If you are having the time of your life for 11 months is that a terrible outcome?
♦ Buy beer at the grocery store and not the bar- you will be shocked at how much bars get away with marking up your bottle of beer.
By focusing your spending only what is most important to you at the time, you can shift your daily spending around to allow you enjoy the more expensive areas of the globe and then making up for it when you get that great house-sitting gig. The key is watching your daily number over time and managing it to suit your dream, but not letting it control your dream.
After 20 months on the road I’m surprised at just how much our “daily number” has stayed with us. After all this time our overall spending (yes, we’ve tracked every penny) today sits at $63/day, well below over average and it feels great.
Your budget is a guide to your trip around the world, but is should not be an obstacle that keeps you from taking the leap. Instead, take the another step towards your dream today and select your daily number.
If you have a daily spending number you are using, or have used, please share it in the comments. It would be great to provide more information to anyone beginning to put together their own daily number.
In 2010, Warren Talbot and his wife Betsy took off on an around-the-world journey. A year later, they revealed their financial and mental strategies in Dream Save Do, the definitive guide to funding any big dream. You can find out more about Living the Good Life on their website, Married with Luggage. He can currently be found on a train, bus, or camel crossing the vast expanse of Asia and Europe during their 18,000km journey from Thailand to Portugal.