Budgeting for a long-term trip is scary when you don’t know how much it’s going to cost. Mat and I didn’t have a clue how much we’d be spending before we started travelling. Not knowing made it hard for us to plan and it also increased our fear that we might not be able to make our trip happen at all.
Now, two and a half years later, we’ve mostly got our budget figured out and want to share details about our income, expenses and lessons learned in the hopes that they’ll help you plan your long-term travel budget.
Friendly Warning: we’re sharing a lot of detail so this post is a little long :)
Before getting into the numbers, it probably makes sense for me to share how we travel so you can adjust your own budget according to your personal travel style.
To keep our accommodation costs down, we usually house-sit, stay with family and friends, stay at artist residencies or sleep in our van. When we do stay at hotels or hostels, we try to spend $60 or less per night. We pack our own food and snacks on travel days to avoid spending a fortune at the airport and we usually cook our own meals instead of eating out. We only spend money to see tourist attractions if it’s something we really want to do. Otherwise, we find alternative things to do that are free – flea markets, libraries, parks, hikes, etc. We rarely shop for ourselves and we send postcards instead of buying souvenirs. Last but not least, we travel slowly and stay in each place for at least a month. Oh, and we almost never go out for drinks.
Over the past couple of years we’ve earned an average of approx. $35,000 per year, which gives us a budget of around $2,900 per month.
During our first year of long-term travel, our $35,000 income came from a combination of money we had saved, money we earned from the sale of our house and money we received from a small insurance settlement (Mat was injured in a fatal, high speed car accident in 2010).
During our second year of long-term travel, right up to today, our $35,000 per year income is generated from my part-time salary (approx. $2,500 per month after taxes) and Mat’s art sales and graphic design contracts (approx. $5,000 per year). Mat also takes care of all travel planning, van maintenance, meals and back massages :)
We divide our expenses into two categories: cost of living (food, rent, car insurance, etc.) and travel costs (flights, hotels, travel insurance, etc.).
Our monthly cost of living varies per month depending on whether we’re backpacking, house-sitting, road-tripping or living in a tiny apartment. The table below shows an estimate of our monthly living expenses for each living/travel situation:
Knowing what our cost of living will be (even just roughly) allows us to figure out how much we’ll have left over to spend on travel expenses like flights, hotels, travel insurance, etc. To give you an example, here’s how we would plan and budget for a 3-month backpacking trip to Costa Rica:
- Our cost of living when backpacking is $1,100 per month (as per table above). If we deduct that amount from our monthly budget of $2,900, it leaves us with $1,800 per month for travel expenses.
- Our total travel budget would be 3 x $1,800 = $5,400 total
- We could each get a round trip flight for $750 = $1,500 total
- We would spend 90 nights at a hotel at $35 per night = $3,150 total
- Our ground transport (taxis, buses and shuttles) = $450 total
- Our travel insurance is $100 per month = $300 total
- Food, fun and misc. expenses are in our living expenses budget
We could easily spend more on this example trip by staying at nicer hotels, eating out more often or doing more touristy activities. We could just as easily spend less by staying at a cheaper hotel or renting a cheap cabina.
We plan our trips based on how much money we actually have and then we make the trip fit our budget. If we planned them the other way around (planned the trip first and then tried to come up with the money to pay for it after) then long-term traveling would be much more stressful since we’d always need more money to pay for the things we were doing.
We are extremely grateful that we’ve found a way to travel long-term in a financially sustainable way. While there are certain factors that have made it easier for us to adopt this lifestyle (no student loans, no kids, no house, to name a few), we do spend a lot of time and effort planning each of our trips and figuring out how we can afford them. We work on our van every weekend, we review our budget every two weeks, we apply for new house-sitting jobs and artist residencies every month. Being nomadic means that we can never stop planning our next move.
We’ve been very careful to stay out of debt during our travels and we always incorporate a $200 “miscellaneous” cushion into each monthly budget to cover unexpected expenses. That said, we’ve realized that $200 per month is not enough – in the last 7 months we’ve had 4 big ones that we didn’t budget for:
- Plane tickets home from Barcelona (we missed our original flights!) – $3,000
- Dental work for two – $1,000
- Two new sets of tires for the van – $1,000
- New front brakes and a new battery for the van – $700
With almost $6,000 on our credit line, we’ve learned an important (and expensive) lesson: we need to slow down our spending and we also need to set aside more money each month to cover unexpected expenses like these.
If you made it this far, you must be seriously interested in long-term travel! So, what do you think? Is our lifestyle more or less expensive than you thought it would be? If you’re a long-term traveler, how does our budget compare to yours?