The Round-the-world Travel Budget

I get a few e-mails each week from readers planning to take off and go travel the world and I’ll occasionally go surf the gap year and round the world branch on the Thorn Tree forum to offer some advice. The top question by far is, “Have I saved enough money?”

The problem is, nobody can honestly answer that question except in the obvious cases when it is clearly not enough. If your year abroad includes 9 months in Europe and a month in Japan, you had better have a big inheritance coming or a major amount of coin saved up. If you’re going mostly to the places covered in The World’s Cheapest Destinations, however, you can get by for far less than you would spend at home…IF you do it right.

Here are the questions you really need to answer honestly before you’ll know how much money you need.

1) Am I spending most of my time in cheap destinations? You can spend two months in Indonesia and spend less than you would in two weeks in Norway or Japan. The Czech Republic is half the price of Austria even though they share a border. I would argue that if you’re not made of money, a country’s costs should be your #1 factor in choosing where to go. It’s that important.

2) How much am I going to be moving around? Having a real or mental checklist that forces you to race around from place to place is a sure way to burn through your money twice as quickly. You will be handing much of your hard-earned savings to transportation providers and your memories will be a blur of buses and trains. Take time to get to know a place and its people and you’ll be amazed at how much less you need.

3) Am I a city person? There’s a huge divide between rural or small town prices and big city prices, whether you are in a third-world country or a developed one. In many cases the prices for lodging are double: Prague/Mikulov, Budapest/Eger, London/Nottingham, Atlanta/Chattanooga, Bombay/Hampi, Buenos Aires/Cafayate, and on and on. If you plan on spending most of your time in cities, double your budget.

4) How much discomfort can I put up with? I stayed in some downright scary hotels on my first round-the-world trip and was able to bump it up a notch on the next two, with slightly nicer rooms and some air-conditioned trains now and then. The difference was only a few dollars a day, but if you don’t have those extra dollars you’ll have to settle. Do some camping, some cold water showering, and outhouse using to assess your ability to truly cope with a shoestring budget.

5) How many flights will I need? I did this article a long time ago called Fly to the clusters and save. It still applies. Most of the cheap destinations are clustered together. If you’re not taking 12 flights for 12 destinations you will spend far less. A reasonable round-the-world trip can easily be done with four or five flights total over the course of a year if you’re not trying to tick off every continent.

Only when you figure out the answers to these questions can you really know how much you will need. If you’re on the right side of all the above, you and a travel partner can get by for $800 to $1,200 per month after flights fairly easily, for a year-long RTW trip. (Assume $500 to $1,000 if alone—there are savings in numbers.) Less if you stick mostly to the very cheapest spots and are a cheapskate. If you’re on the wrong side of the above questions though, double or triple it. Two of you will easily spend $1,500 a month just on hostel beds if you’re in Western Europe in the summer, before you eat even one baguette…

Comments
  1. Carolina

    I hadn’t heard the term “fly to the clusters” before, but that’s exactly what we’d been planning to do on our around-the-world trip. We’ve also learned the value of timing; our initial plan had us in our two expensive areas — Australia and Western Europe — in the high seasons (late December-January and July, respectively). After seeing how much lodging prices jump during these times, we decided it’d be better to move the departure date to two months later, which would give us time to save more money pre-trip and put us in those expensive places in shoulder seasons, when the weather will still be pleasant and the crowds will be gone.

  2. Mike

    Hey Tim – Nice to catch up on your blog after an absence – we were traveling cheap in France, believe it or not. $1000 USD per month per person!

    Anyway, another tip is that if you’re traveling during the holidays it pays to stay in one place for the weeks around Xmas and New Years. Prices can jump and if you’re traveling without reservations you can be stuck in the expensive hotels if the cheap ones are full.

    Far and away the most expensive part of travel is accommodation. Especially in expensive countries, if you want to save money on travel, put your energy into figuring out ways to sleep cheap – hook up with the friend of a friend from home who just moved to that country and is homesick for people who speak English, find a homestay organization that doesn’t suck, use wwoof or helpx if you’re interested in seeing working life a little…. Hotels are usually last-resort for us in expensive places, and we’ll often organize our trip around going to a location where we know we have a place to stay.

    If half your nights on the road are free then you can stay twice as long.

  3. brian from nodebtworldtravel.com

    Moving quickly does eat up alot of cash. A mad dash thru a number of countries will be more expensive than slowing down and enjoying a place as long as you want to.

  4. tim

    Thanks for the tips everyone. Staying with someone can indeed help a lot in an expensive country. If you’re going to be in Nashville, find me on Hospitality Club or Global Freeloaders. If I’m in town we’ve got a bed. Good point Carolina. Seasons can make a huge difference, even between one month and the next.

  5. hotels in prague

    You have to leran to be practical.I agree to Brian that quickly moving will eat lot of your cash.Try to find an easy way.

  6. Brad & Lana

    Hi Tim,
    My wife and I are about 3 months in on our around the world tour. We have calculated about $1,000 a week or $40,000 for 10 months of travel. Agreeing with you we have had over expenditures in countries like Australia & New Zealand, and we are getting back on budget now in the Asia countries.
    Feel free to check out or website and hopefully someone who is looking to budget this once in a lifetime opportunity can use our information as well.

    http://chasethesummer.com

    Cheers,

    Brad & Lana

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