How to Keep Your Round-the-world Travel Budget in Check

“Have I saved enough money for my trip around the world for a year?”

Back when Lonely Planet’s Thorn Tree forum was the place everyone went for travel advice from their peers, I used to spend a lot of time looking at readers’ questions on the Gap Year and Round the World Travel message board. It’s not as active in these days of social media and more blogs out there, but people are still asking versions of this same question now. I also get readers e-mailing me their itinerary and asking, “Will this amount last me the whole trip?”

round-the-world travel

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, an online job/business you’ll keep doing, or a major amount of savings. 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.

Traveling around the world can be far cheaper than just living where you do now. It could even be 1/4 the amount you are spending on your monthly bills today. You won’t be living the same lifestyle, however, so take a hard look at your priorities.

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 Switzerland. The Czech Republic is half the price of Austria even though they share a border. Guatemala is half the price of neighboring Belize. Bolivia is less than half the cost of neighboring Chile. 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.

trekking in Nepal

Go where your budget will really stretch and budgeting will get a whole lot easier.

2) How much am I going to be moving around?

Having a bucket list 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. Slow Travel is not just a better way to experience a place; it’s also a sure way to spend less money. (See The Budgetary Case for Slow Travel.)

3) Am I a city person?

Paris France stopover one night

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, Mumbai/Hampi, Buenos Aires/Cafayate, and on and on.

If you plan on spending most of your time in cities, double your budget. Otherwise hit them for a few days and then move on to less crowded places.

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.

cheap hotel Ometepe Nicaragua

There are ways to cut your lodging budget through housesitting, couchsurfing, and crashing with friends of friends, but if you don’t have these things lined up in advance, budget like you’ll be paying for a (cheap) hotel every night so you’re safe. The more you can rough it, the lower the budget…to a point. This will probably be your biggest budget line item over time.

5) How many flights will I need?

I did this article a while back called Cheap Travel Clusters Around the World and it’s a good way to look at the world map when planning the big flights. 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.

Your best bet is often to just plan on the major flights, then figure the rest out as you go along. Especially within Asia and Europe, there are many cheap budget airlines that can get you from place to place, airlines you will find out about after you’re actually in the country and seeing the sales. (See 8 Reasons NOT to Plan Your Round-the-world Trip in Advance.)

flight deal airplane

Only when you figure out the answers to all these big 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 $1,000 to $2,000 per month after flights fairly easily, for a year-long RTW trip. (Assume $800 to $1,600 if alone—there are savings in numbers.) Less if you stick mostly to the very cheapest spots and are a cheapskate. More if you are a “flashpacker” or will be spending on a lot of adventure activities in developed countries.

If you’re on the wrong side of the big questions though, double or triple your budget to a couple grand or more. Two of you will easily spend $1,800 a month just on hostel beds if you’re in Western Europe in the summer, before you eat even buy one train ticket or eat one baguette…

Comments
  1. Bridget

    I think these are good rough estimates. I’m a solo traveler and my cheapest months ranged around $1,000-$1,200, maybe even less than $1,000. I nearly always had my own room in a simple but clean place to stay or rented an apartment for a month or so. My most expensive months (which went well above what I mentioned above) were in Africa, when I did some safaris and climbed Kilimanjaro, and in France, where it seemed to cost a fortune even though I did very little. Iran also cost me a lot because (as an American), I couldn’t travel solo there. I do know people who travel more on the cheap than me, so there are definitely ways to go cheaper, as you say, depending on what’s important to you.

  2. Ian

    Amen to items #1 & 2. We’ve been traveling for about a year. The difference between Costa Rica and Guatemala or costal Croatia and Bosnia was amazing. In Bosnia every time we ate out we went to town and left wondering if we were dreaming. The difference moving slowly vs fast was also amazing. For #3 I’d also add coastal vs inland. Costal Croatia vs Zagreb at least double. Costal coastal Rica vs the Central Valley towns the same.

  3. otlaat

    New post of wonderful way of writing , Amazing photos , I’m glad to be one of your follower , you are the best

  4. Kerry Dexter

    All true points, Tim — and I’d add thinking about low and high seasons when you begin to plan. Some of that you’ll only find out when on the ground in a region or country, but you can get general ideas beforehand. I’ve saved a good bit traveling in off seasons. Of course many sites/attractions/events will not be available at those times, so, as with the points you make above, it is about choosing your priorities and knowing why you are visiting a particular place.

  5. Juan Ovalle

    Very valid points! I think there are a few points that a lot of travelers sometimes overlook when doing their budget. Ultimately, it’s all about planning and prioritizing (is it comfort over cost? city over countryside?) Great read!

  6. sudeesh

    Yeah Tim, Apart from having the travel itinerary we should also have the budget agenda so that we don’t run out of money.

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