Once again, I’m handing over my blog to Tom, who as you know is the brains behind this operation. When it comes to budgeting, this man knows his spreadsheets. I, on the other hand, use a calculator and then input the numbers into excel, driving Tom insane! He does the planning and I try to keep us on budget by finding the deals when we’re travelling.
Mr. Pretty Little Grub here today to continue the third part of this 3-part series on Planning a Year Trip. If you haven’t already you can catch up on the first two parts on how to Save for a Year Trip and how to plan a Year Trip Itinerary.
When we started planning and saving for our year long trip, one of the most important things we had to figure out was how much we would need to save. Luckily, the internet is full of amazing resources for figuring out anything including how much dough you need to see the world. The tricky part is, everyone has different travel styles and budget ranges, so this number can vary wildly from $10,000/person to $100,000/person. Being experienced backpackers we already had a pretty good idea on how our travel lifestyle compared so we could start on a rough budget.
Building the Budget
Once the rough itinerary is made, you can start to compile guesstimates on travel expenses for each region or country you plan to visit. I broke it up into three main categories:
- Daily Cost of Living
Most likely, your second largest expense while traveling, after accommodations, will be transportation. Thus, figuring out how you will get from point A to point B early on will help you to frame your budget. Overseas flights tend to be costly so it’s best to minimize them as much as possible. It was a bit necessary for us to include some additional overseas flights to ensure we could make it home for two important weddings happening during our year of travel. But if you can follow a logistical route in one consistent direction to minimize any backtracking, it will help both your wallet and sleep patterns. Google Flights is a pretty useful tool to quickly get some prices for flying just about anywhere at anytime.
However, flying doesn’t have to be your only option. Often you can travel between countries via train or bus which may take longer but can save significant cash – and it lets you better experience the country you are visiting. Do a quick Google search to determine your options and find a cost estimate for any necessary train or bus travel between countries.
Daily Cost of Living
The daily cost for everything including accommodation, food, local transportation (tuk-tuk, taxi, metro, ferry, bicycle, etc.), local tours, wifi, coffee, beer and so on; will vary dramatically depending on the country you are travelling in. An awesome resource to determine how much you should plan for is budgetyourtrip.com. This website uses data submitted by real travellers to provide an average cost of travel for almost anywhere in the world. It even provides a separate budget amount based on your travel style, split into Budget, Mid-range or Luxury. I typically used either a Budget or Mid-range cost estimate depending on the location and what costs I was expecting we would incur.
Then multiply this daily cost by how long you plan to spend in each destination. This is where you can get flexible with the rough itinerary you made previously to adjust your overall expenses. Spending too much $ in France? Move a few more days to the less expensive, but equally beautiful, Spain.
I included the cost of local tours and admission fees within the daily expense. But sometimes there are significantly larger costs associated with bigger excursions that require some additional budgeting. These are often those things you can’t afford every time, but want to ensure you include room in the budget for the one or two specific things you have a strong interest in. Some of these may include:
- Spanish school in Argentina
- Galapagos Island Tour in Ecuador
- Sailing adventure in Colombia
- Bungee Jumping in New Zealand
- Scuba Diving certification in Thailand
- Inca Trail Trek to Machu Picchu in Peru
- Hot air balloon in Caledonia in Turkey
Tally it Up
Here is the moment of truth where you gulp and realize just how much it may cost to follow your dreams. After hitting that Excel =SUM(…) function, be prepared to adjust any of the parameters to reach a savings target you feel is realistically attainable. Spend less time in those more expensive countries, reduce your transportation costs by skipping a continent or adjust the total number of days you plan to travel. Perhaps just 6 months or 3 months would be sufficient.
Don’t feel discouraged that saving enough isn’t possible – if you set your mind to it, you’d be amazed at what you can accomplish. And there’s lots of different ways you can reach your goals that you may not have considered. Check out our tips on saving for a year of travel or consider options to supplement your income while travelling such as with a Working Holiday Visa, teaching English abroad, volunteering or working for room and board (WWOOF).
Stick to the Plan
Once your budget is set, your coins saved up and your bags packed, it’s important to try not to stray too far from your budget. Otherwise, you may find yourself coming home early or stuck washing dishes in a foreign country. One amazing tool we have found so useful has been the Trail Wallet app for tracking expenses and ensuring you aren’t living life too lavishly… or perhaps that you actually can afford to splurge on that bottle of wine with dinner. A neat fact is that the trail wallet app was created by like-minded travel bloggers.
Our Travel Budget
I’m sure you are curious as to what our budget looks like, so we’ll share our details to help give you a frame of reference. By following the steps shared throughout this three-part series, we are targeting an overall travel budget of CAD$32,941/per person for one year of travel! This matches fairly closely with our intended budget target of spending CAD$90/day per person.
However, some things to keep in mind reflected in our budget:
- Our travel style is “backpacker.” Which focuses on saving money wherever possible: sleeping in hostels (mostly private, sometimes dorms), skipping the costly tour groups, avoiding tourist traps, pre-drinking convenience store wine before heading to the bar and either eating street food or cooking ourselves.
- Most of our international flight costs are significantly lower thanks to seat sales, using travel rewards points and family discounts (thanks Clayton!).
- Travelling as a couple allows some savings (food, double rooms, etc) that lowers the average per person cost compared to a solo traveller.
- We are spending some time in Canada (our home) which will save on accommodation costs during those days.
- Not shown in the numbers, is that we plan to reduce transportation and accommodation cost in Australia by buying a campervan we can later sell, hopefully at not too big of a loss.
- A necessary expense not shown here is travel insurance, which costs us about CAD$850/person for a year.
- We own a home that we are renting out to friends which has additional expenses (not shown here) such as condo fees and property taxes.
- Some of the expensive tours/excursions we included in our budget: Japan rail pass, scuba diving lessons in Thailand, snorkelling Great Barrier Reef, hiking Patagonia in Chile, salt flats tour in Bolivia and a sailing adventure from Colombia to Panama.
Over and above this, we made sure to save additional funds to give ourselves some flexibility and provide a contingency factor. After all, we did quit our jobs to follow this dream, and finding work again may take some time.
I hope you found this three-part series on planning a year trip useful. Let us know in the comments if you have any questions or additional advice for readers. Happy Travels!