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How you can travel for a year: What does it cost?

by Michael

Note: We’re starting a new feature to answer questions readers have asked us about our travels.

How To Travel For A Year: What does it cost?

It depends on what type of travel you’re planning. Young, single backpackers can travel around the world for $15,000 while older couples may do it for $115,000. We’re not backpackers so we wouldn’t meet the low-end of the range but we’re not luxury travelers either.

Budgeting for around-the-world travel depends very much on what countries you plan to visit. Right now we’re in Europe, one of our more expensive destinations. But we also spent three months in Asia, which is extremely cheap for westerners. In Vietnam we stayed at hotels, nice ones, for $22/night.  Normally we rent short-stay apartments which are cheaper than hotels, and even less expensive than hostels in some major cities.  Whatever your budget, it’s important to tailor your trip so you can maintain your own personal comfort level. For example, we like places with our own bathroom.

You don’t have to be rich to travel for a year.

We’re certainly not. When this trip is over we definitely need to figure out a way to bring in a sustainable income. At present we’re doing some freelance writing, but not enough to cover our costs. For the five years before our journey we had uninsured medical costs that depleted a good chunk of our savings. Fortunately we had lived in our home for 20 years and built up equity.  We sold it and used some of those proceeds for travel.

What does your trip cost?

We calculated our day-to-day budget based on our prior level of spending, plus obvious extras like airfare.  Our budget for the year is $75,000. The single biggest expense is housing, which we estimate at $2,250 per month ($75/day). This is about what we spent at home taking into account mortgage, real estate taxes, insurance, utilities, maintenance and repairs. That leaves about $1,950 per month ($65/day) for all our other expenses: food, entertainment, cooking classes, local trains/buses, toiletries, film cards, maps, museums and other miscellaneous stuff. If you’re a single traveler this number may be lower.

Update: After our initial year abroad we are still global nomads and had to bring the cost down. We now budget $1,200/month for housing. We mostly find monthly furnished lodging on sites like Airbnb. Staying for a month at a time makes it much cheaper.

Our second biggest expense is transportation. We’re budgeting $12,000 each for plane and long-distance train tickets. The plane tickets bring the trip above what we spent at home but is a necessary cost for this type of venture. Choosing fewer destinations could decrease that amount for your journey.

We still have to eat but staying in places with kitchens keeps that cost down. We don’t load up on souvenirs, where would we put them? Our wardrobes are limited by what we can fit into our suitcases so buying clothing is not an issue.

While it costs money to travel, most of the expenses replace ones that are no longer incurred at home. It’s important to set up a budget and stick to it; just like we’d do at home. If we’re running a little high on housing one month, for example, we scale back on little luxuries, like a concert or a dinner out. In Vietnam where the lodging was so cheap, we ate out more.

Money house

How can you afford to travel long-term?

The major difference between a vacation and long-term travel from a cost perspective is that a vacation is an additional expense. You still have to pay your rent/mortgage, electric bill, etc. while you’re away. With long-term travel this is impractical and expensive.  The first step in thinking about affording a long-term trip is to start viewing the cost of your travel as your only living expense. Get rid of costs that you have at home, often starting with your house.

Figure out how much you spend now. Then imagine what type of travel you could experience with that money if you didn’t have to pay your routine monthly bills. We no longer own a house and cars so we don’t have all the expenses that go along with them. By minimizing our presence “back home” we gave up the following expenses:

  • Mortgage
  • Real estate taxes
  • Homeowner’s insurance
  • Home repairs (These always seemed to pile up, right when we least expected it.)
  • Routine home maintenance (Cleaning supplies, garden stuff, etc.)
  • Car insurance
  • Car payment/repairs (Our cars were 7 and 11 years old so they were paid for, but they were well out of warranty and didn’t fix themselves.)
  • Gas (What’s that costing a month these days?)
  • Cable, Internet, Telephone
  • Utilities (Electricity, water, gas, sewer)
  • Cell Phones (We no longer have cell phones and are loving it.)
  • Income taxes (federal, state and local)

Figure out what you spend on the above items, remembering to add in any other recurring expenses you’ll no longer have. And this doesn’t even cover what you may spend on miscellaneous items like entertainment, clothing, dining out, sporting events, vacation, etc.

What are the financial sacrifices when traveling long-term?

The biggest financial sacrifice is giving up income. But if the majority of your income simply goes to paying taxes and living expenses, you might realize you’re not giving up as much as you think. The key to making the jump is it has to be something you truly want to do. Otherwise it’s always easy to find another excuse to put it off.

For those of you who are still interested in pursuing your dream let us know. (Click “Contact” at the top of this page to e-mail us or leave a comment below.) If you want some advice with your situation we’d be happy to give it. If you want a little nudge to overcome barriers you’ve placed to taking the leap, even better. We’d love to encourage you to do what it says in the banner at the top of this page: Just Go Already!

What other travel questions do you have?

Click here for advice on what to pack for a year of travel.

Click here to see if you would save money by buying a round-the-world plane ticket.

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