Last week, I posted about how we created our budget out of thin air, planning for $72,000, actually spending $66,000, and had a per person/per month cost of $2,540 for our 13-month round-the-world trip. Today, other travel bloggers are giving their insights on how they planned their budget, how much they actually spent, and advice that they want to share on the budgeting process.
Danny from I Should Log Off:
Planned Budget: about $80,000
Actually Spent: $59,114
Per Person/Per Month: $1,407
We actually did two things to come up with our budgets. Both were pretty simple and it seems they both steered us pretty well. First we looked at what we were spending while we were living in the US, for everything. This was basically what we spent our money on after we got our paychecks; all of our housing, food, doctors visits, everything. We added all that up and turned that into a daily amount of about $115/day for the two of us. We had a great housing situation, we cooked instead of going out, and we made our plan to spend the same amount, or less, on the road that we spent while living in the US.
The second thing we did was take some statistics regarding what was defined as the poverty line in the US and multiplied those annual numbers by 2 people and again by 2 years. Totals came remarkably close to our target amount of money, $80k-$100k, for two years of travel. (And ironically what we were living on, very comfortably, in one of the most expensive metro areas of the USA.) We expected that we could probably do everything for closer to $100/day but hoped we could do even better than that and average $80/day. The key for us was taking all of those big numbers and turning them into daily spending because that was a number we could think about and plan for much better.
In the end, we were right on the money with the $100/day estimate. We could have done things much cheaper, two weeks of exciting activities in Uganda and Tanzania brought our trip average up nearly $10/day, but we made the decision early that we were traveling for ourselves and didn't want to limit our memories. We were perfectly happy living without luxuries but still wanted a certain level of comfort and, most importantly, fun. By planning for at least two years of travel we made it likely that we could come home early (traveled 21 out of a planned 24 months) because we wanted to, rather than coming home early because we had to.
Danny and Jillian just returned home from their 18 month journey across the world and blogged about their trip at I Should Log Off. As experts in traveling on a budget (they only paid for lodging for 53% of the nights they traveled), they are sharing their tricks via their new free budgeting website called DoughHound, which has already been featured in the New York Times. Connect with them at their blog, Twitter (@ishouldlogoff), and Facebook.
Theresa from Lives of Wander:
Planned Budget: $32,000
Actual Budget: $36,000
Per Person/Per Month: $1,500
I have to admit that we were also a bit haphazard in our budgeting, though we were very meticulous in our savings. Before departing on our 12-month trip, we did the usual combination of blog reading and guidebook browsing, trying to get general estimates of the cost of day-to-day living as well as the price of activities, such as hiking the Inca Trail or taking a microlight flight over Victoria Falls. Then we stowed all that information in the back of our heads and turned to what we know best---our own travel experience and travel habits. We considered what type of accommodations we wanted (private rooms with private baths if possible in hostels or guesthouses), how we preferred to get around (local transportation most of the time with an option for flights for long distance travel), and how we planned to satiate our hungry bellies (street food, set lunches, self-catering, and an occasional sushi splurge). We also considered the types of activities we wanted to do on our trip (yes to lots of outdoor adventures, maybe to museums, no to spending our time drunk). Then, with all that in mind, we pulled up our previous travel experiences and considered how much each of these things had cost us in the past. Finally, we (or more specifically, Jeff) sat down and estimated costs for each continent we were visiting (South America, Africa, and Asia), breaking it down to what accommodation, transportation, food, and activities would cost for one day in each place. We then took this very basic number and multiplied it by the number of days we were to be on each continent and thus came up with our overall budget.
Were we right? No.
Four months before we departed, we estimated our trip would cost $32,000. In the end, it cost $36,000. Fortunately, it didn't matter. While $32,000 was what we estimated the trip would cost, it wasn't our actual budget. For the four years prior to our trip, we had been putting away a lot of money. Essentially, we took our two salaries and lived on one and saved the other one in its entirety. Not all of the saved money was for the trip, however. Some went into retirement accounts, some went into investments, and some went into our "coming home" fund, but enough of it went into the RTW savings fund that we had plenty of wiggle room. For us, $32,000 was a nice number to aim for, but rather than being the end all and be all, it was just one number within a range that was comfortable for us.
As we traveled, I kept track of our expenses in a little notebook that I carried with me. About once a week, I'd add all the numbers up to get an idea of how much we were actually spending, but we never really used the numbers to budget. We found that, having thought about the trip on a details level before we left, we carried with us a strong idea of how much we were comfortable spending on the various aspects of travel and without really thinking about it, managed to stay in that zone for most of the trip. Because we knew how much we wanted to spend on accommodations or food or whatnot per day, and not overall, decision making was rather easy. Of course, there were splurges and things that cost more than we thought they would, but there were also things that cost less than we thought they would as well. In the end, I think the key is to save more than you think you'll need. There will always be ways to spend it!
Theresa and Jeff returned home from their round-the-world trip in October 2009 and are currently living in Durham, North Carolina, where Theresa works as a writer and editor. In addition to fantastic writing, their site is a fantastic resource for those planning budgets because they break down budgets country-by-country: for South America, Africa, Southeast Asia, and for the complete trip. Connect with her at her blog and Twitter (@livesofwander).
Shannon from A Little Adrift:
Planned Budget: $18,000;
Actually Spent: $17,985;
Per Person/Per Month: $1,635
My budget for 11 months of backpacking around the world came in at just under US $18,000 which was right on target with my predictions. I traveled solo for half of the trip but also had friends join and thus offset some costs (shared guest-houses in South East Asia). Since we already covered how I paid for the trip (which was working part-time the whole way to cover 75% of the costs) I knew that if I stayed under $1,500 in expenses per month my monthly freelance salary could sustain my trip for my entire planned route. The $1,500 per month also included my airfare allowance since I booked my flights as I traveled rather than a RTW ticket.
I stayed at hostels and cheap guesthouses the whole way, couch-surfed a time or two, house sat for a bit and only treated myself to nice restaurants and Western food occasionally. With those cost-cutting measures, I managed to stay right on target with this figure in the overall scheme of things, but not on a monthly basis. I started the trip in Australia and blew through money on diving and tours, but followed up with 6 months in South East Asia, India, and Nepal, all of which came in at roughly $1,000 a month, before hitting Europe. My full budget, broken down to the nitty-gritty detail on a per country basis, can be found on my budget post (with a clean downloadable version for anyone wanting a starting point!).
Gillian from One Giant Step
I meticulously watched my spending and used the spreadsheet to ensure that upcoming plane ticket prices were still within my budget. I love my excel spreadsheet because I could access it offline during periods without internet, and I use it as a Google Document so I can access from any computer with internet (not just my own laptop). I added categories in the spreadsheet that could also be written off later (things like internet costs and part of my lodging) for easy reference come April 15th!
Shannon traveled around the world from 2008-2009, documenting her entire journey on her blog, A Little Adrift, came home, and then hit the road again, working as she travels. Her site is a wealth of information for female solo travelers, vegetarians, and anyone wanting a dose of cheerful honesty about out-of-the-way destinations like Cuba and Bosnia. Connect with her at her blog, Twitter (@ShannonRTW), or Facebook.
Planned Budget: $50,000 CAD
Actually Spent: $49,745 CAD
Per Person/Per Month: $2,072 CAD
Budgeting was one of the major stress points for us....both before and during our trip. We searched and searched for information regarding how much each country we were going to visit would cost. We found there wasn't a lot out there and what existed was old. That is the main reason why I decided on total transparency with our budget. I set up a spreadsheet, posted it publicly on GoogleDocs, and linked to it from my site. It's still there...you can check it out here. It includes all our pretrip expenses and every dollar we spent while away. It looks onerous but, in fact, once it's all set up it wasn't that hard to track. Just keep a note book with you and mark down all expenses. We would update the spreadsheet every couple of days.
In the end, we decided that a budget of $100CAD/day for both of us should do it. This would include all accommodation (mostly private rooms in hostels/traveler hotels), local travel (buses, trains, taxis etc but NOT planes), food & drink (we eat one large meal a day and like to have a couple of beer every day too) and sightseeing activities. We figured it would cost about $10,000 for our flights for the year (we didn't have an RTW ticket; we purchased one ways along the way) and about $5000 for unknowns. Our intended budget was $50,000CAD for the two of us for a year.
The first half of the year was particularly stressful as we came in overbudget much more often than expected. Intellectually I understood that some countries would come in higher than $100/day and that, later on, other countries would be much less expensive. In reality, though, the numbers on the spreadsheet caused me great stress and I constantly worried that we would end up way over budget and have to go home early. I have no advice around this other than to be aware that Asia really is as cheap as legend says and you can make up the money by heading that way!
Our complete budget came in just under $50,000 even though our daily budget ended up being over by almost $5000. It shows that having the cushion is a good idea and that it's likely you'll spend whatever you have, cushion and all!
Do I wish we had more money? Hell, yeah! There were plenty of things that we didn't do b/c it wouldn't fit in our budget, and there are some places I just wouldn't have stayed if we hadn't been watching the pennies however I'm really happy that we made the money stretch. Here's the link to all our budget posts.
Gillian and Jason traveled around the world in 2009, returning in May 2010, and recently decided to be "responsibly irresponsible" and start saving for their next big adventure. Gillian writes at One-Giant-Step.com about her recent RTW trip; the planning, the traveling, the coming home and her future challenges. She believes that we are all only OneGiantStep away from realizing our dreams...it's not that far! Connect with her at her blog, Twitter (@OneGiantStep), and Facebook.
Keith and Amy from Green Around the Globe
Actual Budget: Around $48,000
Per Person/Per Month: About $2,400
The timing for this post on budgeting for RTW travel is excellent, as I spent this last weekend revisiting our detailed budget records for 2010 in preparation for filing our taxes. And while taxes are not the most exciting aspect of planning for a RTW trip, the impact can be significant, with a potential 27% impact on your cash flow. Wouldn’t you want an extra quarter on top of every dollar in your travel account? I know we did. After all the hard work, sacrificing and saving, by keeping records, receipts and a little preparation with an accountant before we left, we reduced our taxable income at the end of the year with appropriate business expenses.
In our case since we left in October of 2009, and returned to the States in June of 2010, we had income from full time jobs and consulting work that we were able to offset with expenses related to our travel and starting GreenAroundTheGlobe LLC, the company behind our blog. By keeping detailed records of our expenses and documenting the research we were doing talking with key leaders in sustainability, we were able to work with our accountant to appropriately claim business expenses against our income, significantly reducing our taxes at the end of the year. So call me a budget geek with my very detailed spreadsheets that allow me to know things like that out of the 266 days we were traveling the most expensive one was April 11, 2010 coming in at $720. However, by keeping these records we were able to keep over $8,000 in 2009 that would have otherwise been paid in taxes. With that in mind I happily embrace my inner budget geek.
For more information on the statistics, financial and otherwise, on our trip be sure to check out our Wrap Up Post.
*Disclaimer: This post is for informational purposes only, and as with all things financial you should seek the advice of a licensed professional. I recommend an accountant specializing in small business and with experience handling international travel expenses.
Keith and Amy documented environmental sustainability and green issues on their 10-month round-the-world trip on their site Green Around the Globe. We were lucky enough to meet the two of them in Cambodia and are so thrilled to hear that, after returning home in August 2010, Keith has leveraged his passions for sustainability and travel into his new job at Johnson & Johnson as Senior Product Director - Global Sustainability Marketing. Connect with them at their blog, Twitter (@keithsutter, @amysutter), and Facebook.
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*Travelers Talk Back is a part of the RTW in Retrospect Community Project, a series that intends to bring together the opinions of travelers on how they planned for their trip and how that planning panned out. And, we want to hear from you! If you are a recently returned RTWer or current RTWer and would be interested in contributing, please let me know via comments or e-mail at theroadforks [at] gmail [dot] com.