A reader recently wrote in asking for advice about how to stretch his travel budget. He’s a twenty-something who has decided it’s time to hit the road and live the traveling lifestyle for a while, and here is what he wants to know:
My friend and I each have around $15-20,000 saved up and we wanted to know how long this can last us? Is it sustainable, and what tips or advice do you have for people traveling with this budget?
It’s a great question and something I’m sure many people have wondered about, but it’s also a really complex one to answer. We all have different spending habits and I think some people could blow through that amount of money in a month or two and other people could make it last for a year. With that in mind, I’ve come up with four main factors to consider when working out how far your money will take you:
1. How long you hope to travel
2. Which destination(s) you’ve chosen
3. The pace of your journey
4. How “independently” you travel
How long do you hope to travel?
There are two ways of approaching your trip length. The first is to determine a fixed amount of time you want to travel (say six months, or a year) and spread your finances out so it lasts that length of time. The second approach is to simply travel until your money runs out. Which approach you choose largely comes down to how flexible you think you are. Are you someone who is happy staying in cheap hostels and possibly couch-surfing if your funds run low? Do you mind self-catering when possible? Are you happy to visit developing countries, which tend to be cheaper? And importantly, are you the kind of person who can control their spending? If you answered yes to most of these questions, the first option of picking a set duration for your travels could work well.
On the other hand, if you are someone that hopes to stay in mid-range hotels, to enjoy fine dining, and to visit more expensive destinations (and there’s nothing wrong with any of this) then the second approach of traveling until the cash runs out might be best. Your journey might come to an end after three months rather than six, but you’ll certainly have lived it up. I don’t want to make this an issue of quality vs. quantity, because I do think that the kind of lean travel described in the first approach can be an absolute blast too (read this post and you’ll see what I’m talking about), but to some extent you have to make a decision on what you’d rather sacrifice – extra time traveling or creature comforts.
Which destinations have you got in mind?
It goes without saying that the destinations you choose will have a huge impact on how far you’ll be able to stretch your budget. The biggest distinction is between developing and developed countries – in general, your costs will be significantly lower in developing countries since the average resident has very little money and therefore things like food will cost a lot less. As an example, you can eat a great meal in a local restaurant in Thailand for a dollar or two, something which would not be possible in the US or Europe. Bear in mind that some things could still be a little pricey, such as consumer goods, imported products, and entry to tourist sites (there is often a double pricing system for tourists vs. locals) but overall, you can expect to get by quite reasonably for as little as $10-15 a day in some of these countries.
Another thing to consider is that even among more expensive destinations, there’ll be variation in your ability to keep costs down. For example London and Moscow would both fall under the “developed and expensive destination” category, but I think it’s much harder to keep the budget under control in Moscow. Between the language barrier, overwhelming subway system with Cyrillic-only maps, high fees for tourist attractions, and dearth of cheap restaurants and accommodation, there’s a lot of opportunity to spend and not much to save. London, by contrast, has a straightforward and relatively affordable public transit system, a plethora of cheap hostels and free entry to most major museums. The only way to figure it all out is to do lots of research.
The pace of your journey
One of the single biggest costs associated with long-term travel is transportation – notably your international flights, but also intercity trains, buses, boats etc., which can all quickly add up. For example, your daily expenses might amount to $40, but your onward transportation could set you back $100. Hopping from city to city is the fastest way to blow through your budget. Therefore, the easiest way to stretch your budget is to slow down – travel to fewer destinations and spend more time in each. The more time you spend in a place, the more you’ll develop a deep understanding of the country and culture. If you’re uncertain as to whether fast or slow travel is best for you, take a look at this post, which debates the issue.
If you want to stretch your dollar as far as possible, then make sure you’re traveling as independently as possible. Organized tours can easily eat through hundreds of dollars a day – even in countries where you could comfortably get by on a fraction of that amount. Of course there might be occasions when you have to use a tour company to do a day trip or activity that would be dangerous or impossible to do alone, but for the most part, try to keep your travel independent. Guidebooks, smartphone apps and the wealth of information available online make this easier than it has ever been before.
I hope this post has given you some things to think about when it comes to looking at your budget objectively and deciding on a savings goal. Of course, there are myriad ways to stretch your budget when traveling and I’ve discussed many other ideas before. To read more, including advice about saving for travel in the first place, check out my archive of travel tips.