Posts Tagged ‘budget’

Set Your Daily Number
Wednesday, June 13th, 2012

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.

Round the World Expenses
Monday, April 2nd, 2012

We know that career breakers are concerned about finances – whether it is being able to save enough for your break or blowing your budget while on it.

So we are excited to announce that starting this month, we will be joining together with RTW Expenses to deliver more robust articles, guidance, and information to help you plan your career break and long-term travel.

RTW Expenses started as a project of Warren & Betsy Talbot of Married with Luggage, who left in October 2010 to travel the world. Since leaving, they have been documenting all of their expenses on the road from the beer in England to the doctor’s visit in Ecuador to everything in between. (They also documented how they managed to save enough money in their e-book “Dream Save Do”.)

Betsy & Warren Talbot

In addition to their monthly expense report, we will also be working together to provide you in-depth articles and advice to help you plan your own adventure. We will be publishing more financial-based articles on RTW Expenses with deeper insights into how you can save on flights, visas, insurance, gear, travel, and much more.

We are thrilled with this new partnership as are the Talbots. “Betsy and I have been tremendous fans of the idea of helping others to plan their own around the world adventures, and this joint venture is a perfect synergy with our message.”

We will also be focusing on financial and budgeting concerns at our local meet-ups in April and May. Be sure to sign up for our newsletter to see what meet-ups may be coming to your city.

What financial issues would you like us to address?

Financial Concerns: Planning Your Budget
Wednesday, March 7th, 2012

A lot goes into budgeting for your career break. Where you go, how you travel, how much gear you need, how open you are to eating new types of food, and how much discomfort you’re willing to endure all have a major effect on how much money you will spend. And before you can spend it – you need to save it.

So where to start planning your budget?

Where to Go/How Long to Travel

Where you go and how long your career break is greatly affects your budget. If you want to spend a lot of time in places like Europe, the US, Australia, or New Zealand, then your trip is probably going to be shorter than most. If India, Southeast Asia, the Middle East, and South America are on your short list, then your money will go much further.

Researching costs in different destinations is key to planning the budget. Budget Your Trip is a great site to see how much it costs to travel in certain cities and countries based on real travelers budgets. RTW Expenses is another great resource

Airfare

Your biggest single expense is going to be your airfare. Buying a RTW plane ticket vs. buying your tickets as you go is also going to be one of the biggest decisions you make. It’s a hot debate when it comes to long-term travel, and there’s no right or wrong answer.

Here are a few things to realize off the bat:
• RTW tickets will most likely be cheaper.
• If you choose the RTW ticket option, you won’t be able to be as spontaneous.
• If you chose the “buy as you go option”, you’ll spend a lot of your time researching flights and destinations while on your trip.

Accommodations

Start researching accommodation options now. If you don’t have much international travel experience, you probably have some misconceptions about things like hostels. Many think that hostels are only for young, college-aged travelers looking to party all night and keep you from sleeping. While there are certainly many hostels like this, they aren’t the norm, and there are plenty of hostels out there that cater to people who aren’t in college or on their gap years, and there are many that are great for families.

The best way to go about budgeting for accommodations is to simply go to a budget site like BootsnAll, hostels.com, hostelworld.com, or gomio.com, plug in your city and dates, and start checking average prices. This will give you an idea of what accommodations cost in various places around the world. Remember to factor in which season (high, low, shoulder, rainy, dry) you’ll be traveling in, and keep an eye on holidays, festivals, and big events. Prices can double or more during certain times of the year.

Other accommodation options include Couchsurfing.com and Tripping.com. If you plan on doing slow-travel, staying in places longer, long-term apartment rentals through sites like airbnb.com and vrbo.com are also viable options.

Food

Trying to figure out a budget for food can be a bit difficult. Many websites and guidebooks out there give you a pretty decent breakdown for food costs in the regions you plan on traveling in, but many are a year or more out of date, so always be sure to aim high. Food costs can vary wildly depending on many factors, and while some travelers can easily get buy on less than $5/day for food in many parts of the world, it takes some determination and creativity.

Check out the following money saving tips for food:
• Stay in hostels to take advantage of free breakfasts and kitchens for cooking your own food.
• Eat how the locals eat – this means markets and street food in many areas of the world.
• If you’re leery about street food, don’t be, just use common sense:

  • – Street food is typically amongst the best and cheapest food in the region, especially in places like Southeast Asia and the Middle East.
  • – When looking for street stalls to eat at, try finding one with the most locals – they know where to find the best food.
  • – Look for crowded stalls with high turnover – this lessens the chance that food can spoil or go bad (refrigeration methods are questionable in some countries).

• Get creative – eat lots of fruit from local markets, pack a sandwich for a day of sightseeing, make sure you bring snacks on long bus rides.

Basic Training

Other areas to factor into your budget include entertainment and activities, overland travel (buses and trains), internal flights, visas, vaccinations, gear, and insurance among others. We cover this more thoroughly in our Career Break Basic Training course.

Career Break Guide Table of Contents

Meet Plan Go