You know there’s not going to be any one concrete answer to this, right?
This is a question I get asked a lot in the comments and in emails, and it always makes me wince a little, because when I answer I usually have to say it depends.
Kind of vague, but true. What does it depend on? Well, a lot of factors and also on unforeseen circumstances. Even so, with some careful consideration and a little research you should be able to figure out a pretty good budget to aim for.
Here are the factors you need to consider:
What Is Your Travel Style?
The biggest influence on how big your budget needs to be is your travel style.
So what kind of traveler are you? I’m willing to bet most of the people reading this consider themselves backpackers, but there are many shades of budget. Will you be scrambling to find the cheapest flights, self catering and hostelling it up, or will you aim to rent apartments, eat out frequently and splurge once in awhile?
It’s important to be honest with yourself here. It might seem ideal to pinch every penny you can by squeezing yourself into the cheapest dorm rooms and eating nothing but canned beans, but chances are the actual reality might be miserable. If you’re the kind of person that values a private room, take that into consideration. There’s no shame in knowing yourself.
Where Are you Going?
This may seem obvious but different parts of the world cost more or less. Six months in Europe is going to cost a whole lot more than six months in South East Asia.
Based on my experiences:
Expensive: Western Europe, Oceania, Japan
Mid-Level: South America, Eastern Europe
Inexpensive: South East Asia, China
Once you know where you want to go roughly, then you can start researching an average daily budget in those places. Blogs are a good place to start, but you can also get a rough idea by pricing out accommodations. The general rule of thumb for a daily budget is a nights accommodation x 2 or 3 (depending on how shoestring you plan to travel).
You can also start to price out flights, which are usually one of the biggest expenses for a trip.
How Long Are You Going For?
How long do you plan to to be abroad and where?
I wouldn’t recommend you plan your trip out to the day, but if you have a general ballpark for how long you plan to be in each region, you can figure out how much money you’ll need for that leg. It’s not necessarily true that a longer trip will cost more than a shorter one either, depending on where you go and for how long.
Some of us like a little more spontaneity in our travel plans. We don’t know how long we’re going ot be gone for or where we’re going to end up. That’s cool too, but then you need to pad your travel budget a little more to make sure you have room to choose as you go.
What Kind of stuff are you Going To Do?
Consider the big ticket items on your wish list- things like tours, rental cars, adventure sports activities or safaris. These things often cost quite a bit of money so you’ll need to factor that into your budget.
It’s definitely good to do a little web research while budgeting. Nothing is worse than getting all the way to Australia and realizing you can’t skydive because it costs way way too much money (not that I’d know or anything…).
Will you Have Any Income Streams?
Part of the reason it is hard for me personally to pin down the budget question is because I work on the road. I have money coming in as well as going out, and I’m not very good at accounting so it all kind of gets muddled up. I could tell you how much is in my bank account (I won’t) but I couldn’t tell you how much I’ve spent on travel in the past year. I know, I’m a mess.
If you will be working while on the road, be it teaching English or freelance writing, then you have an extra cushion that most people don’t have.
Note that this is for people who actually KNOW they will have money coming in. If you think maybe you can start a travel blog and make some extra money as you go, it’s probably not wise to depend on that hypothetical money.
How Big a Gambler Are You?
Another way to phrase this would be, how big a comfort cushion do you need?
Things go wrong on the road: people get injured, loved ones get sick, plans change. For that reason you will probably want to invest in some sort of single-trip travel insurance. You might also want to sock a little money away for emergencies not covered by insurance (read your policy, they are usually oddly specific on what is and isn’t covered).
Finally, consider adding in a re-entry cushion for after your trip. If you don’t have a job waiting for you at home, you will probably need some money to cover living expenses while you re-establish yourself post trip.
Okay all that said, the general wisdom is $20,000 to travel around the world for 1 year. That was my base line and my goal. Did I stick to that budget? Well, kind of sort of… My plans for a one year trip veered wildly off the rails at the very beginning which is why I’m writing this from a high rise in Buenos Aires and not an office building back home.
Plans do change, but you can set yourself up for success by planning ahead. So you take all of these threads and tie them together and you should have a pretty good picture of what kind of budget you need to aim for. Basically, creating a budget goes hand in hand with trip planning: it’s hard to do one without the other.