Many people in supposed rich countries are struggling to pay the bills, but something budget travelers discover really quickly is that it’s financially easier to actually travel around the world. You will spend less money being on the road for a year—counting airfare—than you will just staying home. This is hard for many people who only know vacation prices to understand. So here’s an old excerpt from my book Make Your Travel Dollars Worth a Fortune that still holds up well. If anything, the price differences have gotten even more extreme.
If you walk into the average bar in Copenhagen, Denmark, how much do you think you’ll pay for a draft beer? If you said anything less than eight dollars, you’re wrong. Now how much do you think you’ll pay if you walk into the average bar in Brno and buy a beer? If you said anything over $1.50, you’re wrong again. And you’ll get a better beer for a dollar in the Czech Republic than you will for nine dollars in Copenhagen. Looking at it another way, you could buy a round of the world’s best pilsner for yourself and eight friends in Prague for what you’d pay for a bottle of Carlsberg in Denmark.
Let’s go up a notch and look at meals for two in a restaurant. If you go traveling around the Southeast Asian countries of Thailand, Malaysia, Laos, and Vietnam, you can almost always get a good local meal for a dollar or two. You’ll have to go pretty upscale to spend more than five dollars per person on lunch. On the other hand, you can easily pay five dollars on one apple in Japan and you’ll be hard-pressed to even find a bowl of instant ramen noodles for that price at a Tokyo lunch counter. For what it costs to get a sub sandwich and a soda in the U.S., you can get a three-course lunch for two served to you in most of Latin America.
When it comes to hotels, prices between different countries can easily vary by a factor or two or three. For $35, about the price of the very cheapest Motel 6 in the USA, you’ll be lucky to get a private room of any kind in Western Europe, even at a hostel. In much of Latin America, that will get you a nice big hotel room with character, right in the historic center. In the lesser-known areas of Southeast Asia and the Indian subcontinent, it will get you the best room in town, complete with gracious room service, a bellhop to carry your bags, and a nice pool.
Often the difference between feeling flush and feeling broke is a matter of where you are standing.
Drop the High Fixed Costs to Travel More
So picking the right destinations is the first step, but just unshackling yourself from the monthly bills will free up an amazing amount of money. Take out inflated housing costs, auto costs, high insurance bills, and other fixed costs and you are subtracting thousands per month. Even adding back in the best travel insurance, new transportation costs, and nightly lodging, you come out way ahead.
It’s not unusual for long-term travelers to get by for $50 a day for one, or $75 a day for two. That’s less than a lot of people pay for rent and utilities. Never mind all of the other fixed costs paid out every month. And with that amount they’re seeing the world and having a great time. If they can budget double that amount (roughly the median U.S. income), they can do just about anything they want in terms of sightseeing and activities.
Many round-the-world travelers are also excited to discover that they can eat out every meal in cheap countries for less than they spent on the grocery bill at home. They can take local transportation all month and spend less than they did on a car payment and insurance at home.
At the very top end of the scale, however, you don’t get the advantages of pricing differences in the local economy. This is why people who have never traveled more than a week or two on a vacation budget have trouble comprehending how traveling can save you money. The average daily wage in Bhutan may be $2 per day, but that doesn’t stop hotels there from being able to charge $1,200 per night for a suite. My family of three can easily live for $2,100 a month in Mexico, but there are hotels in Los Cabos where you can pay that much per night. You can pay less than $10 a night for a comfortable hotel in Kathmandu, but you can also pay $350 if you want.
Budget for the long term and you will find that spending an entire year traveling around the world is cheaper than sitting on the couch and watching TV. “I wish I could travel more” usually means “I haven’t figured out how to stop spending so much at home.”
After all, if you commit to the road for months or more, you’ll actually feel richer than you did in a financial prison of your own making.