If you’re trying to put together a reasonable backpacker budget for a journey around the world, start with the logistics instead of the bucket list.
The difference between the planning process for an experienced traveler and one planning to take off around the world for the first time is that the experienced traveler knows what can quickly kill the budget. So they avoid the pitfalls below. The newbie often decides where they’re dreaming of going and then spends the next few months crossing things off the list—or goes broke halfway through the trip.
Here are some paraphrased quotes from people who have sent me e-mails or asked questions on message boards or Facebook groups I’ve been on.
Yes, I know we’re going to a lot of expensive places in Europe, but we’re going to sleep in hostels.” (Person who had Norway, Denmark, Holland, Belgium, England, France, Spain, Italy, and the Greek Islands all on their itinerary.)
“We’re on a tight budget, but we really want to hit all every continent except Antarctica on our trip.” (A trip that was just 12 months long.)
“I’m trying to find a cheap round-the-world flight that includes South America, Europe, Asia, and Australia but I’m not having much luck.”
These statements are inherently at odds with traveling on a budget. They’re hoping for a magic bullet answer that is the equivalent of defying the laws of physics.
“Europe on a budget” by itself is an oxymoron if you don’t pick the destinations carefully. Plus flying from one continent to another is inherently expensive, especially if crossing an ocean. If you don’t tackle the big travel cost line items from the start, you had better have lots and lots of money saved.
You can ignore most of the “Top 10 Ways to Travel the World for Cheap” articles unless they’re written by a travel blogger who has done it—not a magazine desk editor in New York City or London. Most of the time these articles are just about messing with the margins, the small stuff. It’s like trying to fix the U.S. deficit problem by cutting funding for the arts. To really make a difference we would need to reform social security, truly fix the health care system, or cut defense spending. All three at once to achieve anything dramatic.
Spend $60+ a night for a dorm bed in Western Europe, or get a fancy hotel room for less in another country
Location and Your Backpacker Budget
Budapest is a fantastic bargain. So is Sarajevo. Nobody will ever call Oslo a bargain, or even London for that matter. You can buy a round of great beers for all your friends in the Czech Republic for the price of one so-so beer in Norway. The price of a hostel bed in Amsterdam (where dorm bed prices can top $100 in summer) will get you a spacious hotel room for two almost anywhere in Eastern Europe. One nice restaurant meal in Switzerland will cover dinners for a week in Bulgaria. Your Europe trip cost could be as low as $50 a day if you pick the right places. Pick the wrong ones and it could be three or four times that.
Now take that further and go to Central America, Southeast Asia, or the Indian Subcontinent. Prices drop in half again, for almost everything you could possibly spend money on. If you spend $60 a night in Nepal for your lodging, you’ll be at 4-star level, maybe 5-star in the off season. There are almost no hostels because you can get a decent double room with private bath for under $10. So don’t think of how you can shave costs by self-catering and staying at hostels. If you cut the entire “basket of goods and services” cost by 2/3, messing with the margins isn’t necessary. You can relax and enjoy it.
Your chosen travel destinations will have a bigger impact on your budget than anything else, day after day. So go where you can spend freely and have fun instead of places where you would spend twice as much and have to watch every dollar. And as I’ve said often, getting out of the big capital cities will usually help too no matter where you are. Especially avoid the worst overtourism spots. Go 50 miles away and you’ll avoid both the crowds and the inflated costs.
Velocity of Your Travel
The more you’re moving around, the more money you’re going to spend every week, every month. Period. It’s not far-fetched to say that someone visiting 24 countries in one year is going to spend twice as much as someone visiting 12. The one visiting 8 and moving around less will spend even less.
You really want to spend half your backpacking time doing this?
If those 24 countries are on multiple continents that require long-haul flights, bump the budget up by thousands of dollars. Even in destinations where transportation is cheap, being on the move a lot requires constant spending on transportation tickets. In a country with comfortable buses or trains, a five-hour trip to the next city will often cost you more than a night’s lodging. Do that a few times a week and even your backpacking Asia cost will skyrocket. A backpacking in Europe cost can easily double if you’re on the move every couple days.
If you’re in one place for a a week to a month though, it’s just your feet and local buses or subways. A five-hour bus in Mexico could cost you $32. A local bus is just 40 cents. A city taxi in the interior of Mexico is only $3-4. Plus when you get to know an area, you don’t have to throw money at hurdles because you’re in a hurry. You can figure out cheaper/better options for everything from lodging to groceries to bus options for leaving town at the end.
Many people setting out on their first round-the-world trip act as if their life is going to end the moment they return home. They have to do it all, see it all, on this one grand adventure. Hey, you’re 28 years old; is this really the last time in your life you’re going to get on a plane and go somewhere?
On my three round-the-world trips, I never even set foot in Latin America. Adding that to the itinerary would have added too much to our round-the-world backpacker budget. Now I’ve been to a majority of the countries in Latin America and am heading to Brazil in a month. Those countries didn’t disappear from the map. I could save them for later, no big deal. I still haven’t been to New Zealand. But I think it’ll wait for me.
This set of flights STARTS at $6,000
Distance and Your Backpacker Budget
I’ve written a few articles over the years on traveling in the cheap destination travel clusters of the world. This can have a huge impact on your budget, which is why so many budget backpackers spend a lot of time in Southeast Asia, then hop to India and Nepal. Two flights, many countries. 
The idea is, you take a long-haul flight to a cluster of cheap countries, then go overland from there. The most common one is to get a flight to Bangkok and then you can hit a half-dozen other countries without getting on another long-haul flight. You can get a cheapo flight from Singapore to Indonesia or a not-so-bad one from Bangkok to Nepal or India, which is the start of another cluster. The cheapest cluster option from the U.S. or Canada is to fly to Mexico or Guatemala and then make your way south by land and boat. For the Brits, a cheap flight to Budapest or Prague can then turn into lots of jaunts by train and bus to the least expensive parts of Europe.
The easiest way to ratchet up your long-term travel backpacker budget in a hurry is to try to check far-flung places off your list on one trip. Sure, you may have always dreamed of visiting Japan, New Zealand, South Africa, Israel, and France, but if you’re trying to find a ticket hitting all those areas, it’s going to be the price of a used car, no way around it. Save some destinations for later.
What lesson did you learn the hard way between planning your backpacker budget and actually traveling?
Dean
Wednesday 15th of May 2019
When you try to figure your budget for lodging, divide all the costs of transportation for a month by 30 and add that to the cost of a nights lodging. You should be able to average $10 a night for lodging and $10 a day for food except in western Europe, but it is the the transportation costs that will kill you in the end just like Tim said....