Series: How to Travel Long Term and Experience the World – Planning & Budgeting

In the third installment of my series on how to travel long term and experience the world we’re going to discuss coming up with a plan and preliminary budget.

The series so far:

Series: How to Travel Long Term and Experience the World – Introduction
Series: How to Travel Long Term and Experience the World – Finding Inspiration

Now that you’ve given some thought to what you might like to do while away and the kinds of things that make you happy, you need a plan. To get the plan started, ask yourself a few questions.

Q: What do I want to accomplish?

Q: Where do I want to go?

Q: How long do I think I need?

Q: Do I want to work or volunteer?

Q: What level of comfort would I like on this journey?

Children are of course a huge variable to take into account. Some people travel extensively with young children, or even relocated them to another country. Others wouldn’t even dream of it. Adult children may attend college or university and live away from home, others may still live with Mom & Dad. The children topic is a very personal one to explore, I’ll leave this one up to you for now to think about.

Answering these five questions should be your first priority since they will help you to form your more detailed plan. Now let’s throw in some answers to these questions, we’ll use three scenarios.

Now we can really get started! These questions are already helping us formulate a plan. Using our examples above we can start filling in the details.

In the first example, our intrepid traveler wants to volunteer in a developing country for a couple of months and learn a language. Given the low cost of living in these parts of the world and the relatively short duration, the cost for this experience would be much lower than that in the second example.

In the second example, this married couple wants to continue their careers in another country. This is an excellent idea but they will have to figure out what to do about work visas and language barriers.

While out for a walk on Ambergris Caye in Belize we came upon a new housing development which was a stone’s throw away from the ocean.

For those in the 50+ age group,  they may already have more than enough money saved and may not need to work to fund their time away. If this is the case, the couple could work or volunteer to increase their social circle, keep their skills up or just learn something new. This time away could be a sort of trial retirement to get a feel for how things might unfold in the future.

Related: The Ultimate Investment – You

Making a preliminary budget

Now that we have a general idea of what the experience could looks like, let’s talk money. Before we can move on with planning we need to understand how much this is actually going to cost so we can determine if our idea is even feasible or not!

This is where the research really begins, you need to figure out how much food, lodging, transportation and activities are going to cost in these parts of the world. These prices must be aligned to your desired level of comfort. Don’t forget to include travel health insurance as well.

For our first traveler

“Basic” level comfort may entail:

• Cooking your own meals
• Staying in hostels, guest houses or in someone’s home
• Taking public transit when possible
• Doing few activities during your travels

In South America, this type of lifestyle would cost in the neighborhood of $40-$50 per day for one person depending on the location. Countries like Brazil and Argentina are more costly than Bolivia, Peru, Ecuador and the like. Keep in mind that when traveling as a couple the cost per person doesn’t double since accommodation is shared. A couple traveling in South America may spend ~$80 per day.

This means that the basic daily budget needed for a 2 month trip for our single traveler is around $3,000. Now add on flights (~$1,500), insurance (~$200) and other activities (~$1,000) and the minimum funds needed would be $5,700. There may be additional volunteer program fees on top of this.

Related: The Basics – Saving

For the married couple

“Moderate” level comfort may entail

• Cooking some meals and eating at restaurants
• Staying in guest houses or reasonably priced hotels
• Taking public transit as well as taxis and perhaps renting a car or taking more regional flights
• Doing more activities

Given that the couple has listed Europe, South America and Asia as destinations, their daily budget will vary widely. We’ve already covered South America at a basic level of comfort so to increase this to moderate may lead to spending $120 per day for two people.

Traveling in Europe will be more expensive so a daily budget here for two people may be closer to $160 per day for two. If the couple were to spend two months in South America and two months in Europe, their daily budget would be $16,800. Adding on flights (~$3,000), insurance (~$800), visa fees (~$1,000) and other activities (~$2,500) and the minimum funds needed would be $24,100.

Those in the 50+ range

After many years of working people in this age range may be thinking of slowing down as their children get older and leave the house for good. They might even retire early in a country with a low cost of living. Given the wide range of options available to a couple in this age range, let’s just assume that they’ll need at least $50,000-$100,000 and the cost just goes up from there.

Take another look at your plan

Now that you’ve answered some basic questions and come up with a preliminary budget, stop and think about everything. Does this sound like a good idea? Are these dollar values reasonable? Is there anything you want to change? At this point it would be a good idea to get some friends or family more involved in your plans so they can give you some feedback.

A friend might point out that you’ve never stayed in less than a 4 star hotel, so your choice of staying exclusively in budget youth hostels may be overly optimistic!

Remember that the numbers I’ve outlined above are MINIMUM costs. Ask yourself, how likely is it that a person or company spends exactly on budget? I would say this rarely happens! Be prepared to add another 10%, 20% or even 30% to your budget to account for changes and emergencies.

In the next installment of this series, I’ll discuss how you can start saving up the amount of money needed to get started on your big adventure.