What I am about to say is not going to send you into an excited frenzy. I apologise now. I know that travel is fun and exciting and wildly exhilarating. But like everything it has a bland and untasty side. You know the one, it is like that ever growing stack of papers in the corner of your desk that you need to attend to but really don’t want to, and it is called a budget.
Budgets are boring, constraining, stressful but totally and utterly essential.
If you are planning a period of extended travel or RTW trip and you don’t have a budget then kick yourself up the backside and go and get one right now. This instant.
Here is why…
Sarah and I had been planning a long overseas trip for a while. And by planning what I really mean is fantasizing about leaving our jobs to sit on the beach on the other side of the world all day and eat lots of good food. That was until one day we actually sat down and said okay, how are we going to do this?
Up until this point we had a vague idea that we might set off in late 2010 or early 2011. In reality we ended up leaving 6 months later, in June 2011. This was because we had not sat down to think about our budget. Once we did this we realised that there was no way we could leave when we wanted to as we could not save the required amount by that time.
The hardest part is trying to work out how much you need to save.
The first step was to think about what we wanted from our trip. Our wants list looked something like this:
- We want to travel for a minimum of 6 months
- Our main destinations were Europe (focusing more on Eastern Europe), the UK, Turkey, and some parts of Asia.
- We did not want to have to rely on getting work overseas
- We wanted to have some money in the bank for when we got home
This is where the boring part comes in. We had to stop drooling over pictures in the Sunday paper travel section and stop reading about interesting and fascinating destinations on travel blogs. We had to research how much everything would cost.
Breaking it down…
We decided to break our budget into three parts
1. What we needed to pay for before we left (plane tickets, travel insurance, storage costs for the things we were leaving behind, car insurance, backpacks and a few other odds and ends)
2. How much we wanted to have in the bank when we left Australia
3. How much we needed for our life back home
Number 1 was relativity straight forward. Once we had worked out all those costs we had a figure to work with.
The same goes for number 3 on the list. We decided that we wanted to have $6000 in the bank to come home to.
It was working out number 2 that was harder. We read about the places we wanted to go in general and tried to piece together a rough idea of daily costs for the countries we knew we would be spending a lot of time in. We talked to friends and family who had done similar trips recently and compared their budgets. All in all it involved a lot of tedious and time consuming research.
In the end our magical number came in at AU$140 per day.
This took into account what we estimated we would spend on accommodation, food, transport, activities, sightseeing, attractions each day for the two of us.
We think $140 is more than we would spend in some countries (such as Turkey) but we know we will be hitting some countries like Italy and France in peak peak season and we may have to spend well over our budgeted amount but that hopfully it will balance out between the two.
Any surplus will probably go to some big ticket activities we think we might do like go sky diving and see some musicals in London.
Once we had this number we had a total figure to work towards. A goal.
We knew the minimum amount we had to put away each pay day in order to reach our goal. Based on that minimum amount, we worked out where we could cut down on our existing daily expenses, I took a second job, and we worked out how long it would take to save enough money to cover all three parts of our budget. After that the saving was a lot easier.
Although we did not realise it as we were working all this out, actually having an end goal to work towards made all the planning after a lot easier and it gave us something to work towards rather than aimlessly putting away a random amount of money each week.
Now that our money is saved, we have our tickets in hand and money in a bank account for our return, all that is left to see is whether or not our $140 a day will see us through.
Take home lesson: work out your goal, without one that round the world trip may never happen.