Money, money, money! Probably the most complex part of planning a trip like this the money. Whether we like it or not, money makes the world go round and as travelers, without it, we won’t be on the road very long. Putting together a rough guesstimate for a trip of this size isn’t easy.
Since I have been thinking about a trip like this for a couple of years now, I have used my travels over the past to experiment with budgets and set standards for our upcoming RTW budget.
If you have the ability to do that, do it. Think about how you want to travel on your long term trip from accommodation to transport to food to tours. Then take a trip and live like that. Try it out and see how you do. This is ultimately what helped us to set our projected budget for our RTW trip.
It wasn’t easy at first, we were used to the 1-2 week vacation from corporate life that usually involved a fair amount of indulgence. We weren’t luxury travelers by any means, but operated on that mentality of ‘do everything because we can’. The first time we took a trip and stayed in hostels, used local transport and ate at food stalls really opened our eyes to how affordable travel could be without sacrificing the experiences.
We found ourselves over time starting to spend less than planned and actually coming home with money in our pockets. This was a great feeling as we all know how easy it is to just spend it because you have it. As far as numbers, we seemed to be pretty comfortable operating on a $50-$100/day per person budget near the end and on a couple of occasions, yes, still coming home with money in the pocket.
I also want to note that just because we returned with money, doesn’t mean we sacrificed things on the trip to save money. We planned ahead, scheduled the things we wanted to do and did them. We came back with extra money and no loss of experience.
There have been times I have traveled with friends and spent way less, but David and I prefer private rooms when we travel and a private bathroom is a bonus if available. We know there will be times when that isn’t an option, but for most of our travels, we plan to book those types of rooms. We also really enjoy visiting with locals, so taking local transport is a good way for us to interact. Bonus, it’s cheap too.
So our budget comes down to our travel style and needs while we are on the road. This is an overview of how we plan to travel:
- Use miles for free or deeply discounted tickets
- Use budget airlines
- Hostels/B&B’s- private rooms when possible
- We are looking into house sitting to stretch the budget
- Eating local
- Street food
- Cooking our own meals when we can
- I am not about to embark on a trip like this and miss out on things. This will take up the biggest chunk of our budget and in my opinion, it is money well spent
- Local transport
- Using trains and buses overland when we can in exchange for more expensive flights, when possible
- various expenses for supplies
- things you can’t plan for
- This is an expense but it won’t affect our budget. We will be paying for it before we leave.
So that is a basic overview of how we will spend our money. Traveling long term puts you into a variety of economies that can either be budget-friendly or budget foe. Our itinerary involves a variety of this, so we realize that setting one number won’t work as a catch-all. However, our plan is to stick to it as closely as we can in expensive countries and try to over-indulge in the more affordable places. We are hoping this creates some sort of balance for us! We shall see…
Our goal budget, after careful consideration, comes out to an average of:
That means, for both of us. As I said, we know there will be countries that we surpass this, but our goal is to average it out and still spend the same amount when it is all said and done. This number gives us roughly $3,000 USD to spend each month.
We plan to track our spending and bring you reports of how we are doing while on the road. Look for breakdowns by country and month in our new series, Let’s Talk Budget.
More on Long Term Travel:
- How to Plan A Trip: Step by Step Guide
- 11 Easy Tips on How to Find Cheap Accommodation
- 10 Killer Tips on How to Find Cheap Flights
- How to Save Money for Travel: A Step by Step Plan
- Essential Travel Vaccinations Guide: What You Need & Why
- How to Sell Everything to Pursue Long Term Travel
- What We Told Our Families Before Long Term Travel
- Giving Up Our Couch to See the World
- 20 Days Till Liftoff: Long Term Travel Preparation Checklist
- Ultimate Long Term Travel RTW Packing List
- Where Will 2 Years of Long Term Travel Take Us?
- Redesigning My Life at 30: Long Term Travel Career Break
- House to Hostel: A Married Couples Perspective
- 6 Month Long Term Travel Recap
- 2014 Travel Review: 1 Year of Full-Time Travel
- 2015 Travel Review: 26 Countries on 4 Continents
- 2 Years of Long Term Travel Down: What’s Next for Divergent Travelers?
- 2016 Travel Review: 16 Countries on 4 Continents
- 2017 Travel Review: 7 States & 7 Countries
- How Traveling the World Changed my Perspective of the USA
- 5 Ways to Reduce Your Carbon Footprints while Traveling
17 thoughts on “How to Plan a Travel Budget: Step by Step Guide”
Very well written, I agree with your budget recommendations thought most of people when travelling usually act on an opposite way. Why they do this? because is another to love travel and is a totally different thing to go holidays. The difference? the ones that goes holidays just want to spend like no other does because they can’t bother of thinking how to stay longer on a tighter budget control. I suspect they do this because of work pressure they have back home, but that’s the way it works.
Anyway just wanted to let you know that you have write an excellent article about travel budget which i wish one day people will release the beauties of travelling abroad, is not about visiting posh places is about knowing different cultures and this saves huge on budget.
Yea, travel doesn’t have to be expensive. So many people at home kept asking us if we had won the lottery to go traveling. Not the case, we actually spend less on the road then we did at home.
I love the real way that you write. It’s how I found you in the first place, and for that I am grateful.
Hi Kobi! Thanks for stopping in!
This is awesome. It’s tough planning for a multi-country trip because prices can vary wildly from one place to another. But you have a good range there and, having lived in Australia before, I’d estimate that $3,000 a month should be enough for two. There are so many moving variables that it’s really hard to say though, for example airfares could be more expensive if you plan to go to the smaller towns and “experience” costs (like boat tours, snorkeling, 4WD drives, etc.) of course depend on your travel style. All the best with the travel budget!
Yes it is! We’re hoping we’ve planned in enough of a buffer to equal out the cheap and not so cheap countries.
We had the same experience transitioning from thinking about 2 week vacations to our RTW trip. Based on all the blogs we’ve read and the fact that we are skipping the expensive countries (USA, Australia, Europe, etc). We have come to a budget of $85/per day, total. We know that will be a little tight, but we hope we can make it work. Like you guys we also dont want to miss experiences along the way so we have our “funny money” fund that has about $2,000 in it and will get additional funds if we do any contract work from the road. That will be how we pay for things like safaris, hot air balloon rides, scuba, etc. We leave for our RTW on January 7th and will definitely be following along with your trip. When do you guys head out and whats your first stop?
yes, it is hard to change that mentality when you are so used to doing things a certain way. But we both agreed we weren’t going to travel around the World and miss out on things for the sake of the budget. I think that $85/day is very reasonable. We aimed high at $100/day I think, but I want there to be ‘slush fund’ money leftover in places. I think it will help balance some of the more expensive countries. We are starting in FIJI!!! Planning to fly out Feb 3rd as long as our house sale closes as planned. 🙂
Very exciting! Well good luck on your home sale and hopefully our paths will cross during the next year! We’ll be updating our blog as we go, so feel free to check it out when you have down time. 🙂
Planning for things you can’t plan for is very smart. We made the mistake of basing our budget on just the necessities, and not taking into account things that could go wrong, or just us making mistakes with things. $50 per person per day seems a pretty solid budget; I’m looking forward to seeing your spending reports while you’re on the road, so we can compare notes!
Budgeting for a trip this size IS difficult! LOL we are hoping we factored in enough padding for the unexpected and splurges. If not, we’ll have to get some jobs or house sit! 🙂
I am really looking forward to your updates on your budget! Like you, we are used to working in corporate America and only taking 1-2 week trips, so we do tend to “splurge” on things like convenient flights, renting cars (instead of using public transport), and accommodations in a central area (instead of something that might be further away, but cheaper). If you take those out of the equation, since you have time on your side now, I think you can easily stay within your budget!
That is what we are hoping!!! LOL It will be hard to break the ‘convenience habit’. I am used to analyzing things and then justifying the slightly higher cost. Time to get in the mentality of cheapest option! I think we will be good with this projected budget. We plan to spend a lot of time in places that are really affordable- Asia, India, etc. But we also plan to spend some time in NZ and OZ, but we have diligently been planning that so we know ahead of time what it will cost so we can stay on track. I couldn’t think of any other way to do it. Having too much flexibility in those pricier countries made me nervous for the budget, so we will really be ready to cut loose when we hit Indonesia after OZ. 🙂
I am just hoping mine works
I know!! Me too!
I’m so excited for y’all and to start reading your updates from the road! 🙂
Thank you! We look forward to having you tag along!