How To: Set up a RTW Travel Budget

You probably thought it was easy to create a budget until you went to actually make one.  Then you sat down and (hopefully) made a list of your expenses and that list seemed to go on and on and on.  Finally you thought you had finished, but then just when you’d sorted out your “money piles” you remembered that your cell phone bill wasn’t included.  Ooops!

Travel Books Section at Uppsala Library Photo courtesy of flickr user unicellular via creative commons licensing

Learning to budget is the first step in making your dream a reality. Here are a few basic steps and tips to help you navigate setting up a travel budget:

1. Track your expenses for a month. There are plenty of sites on the internet that will help you track your spending.  Your bank may even have software available, but all your need is a basic spreadsheet.  Write down everything you spend for a month.  Trust us you’ll be glad you did.

2. Be honest with yourself. Are you really willing to for go certain creature comforts?  Are you comfortable with a bathroom down the hall?  Are you comfortable in dormitories?  Answer these questions truthfully, you’ll be glad you did.  If you lie to yourself at this stage in the game you’re going to have a rough time of it on the road. Plus it’s better to save more than find yourself out of money.

3.Research. This probably sounds intuitive, but take some time to get a realistic picture of how much things cost in the country or countries you are going.  Review our Real Traveler, Real Budget page to get an idea of the actual cost of traveling in certain regions.  Remember, everyone travels at a different level of comfort, but it never hurts to get an idea of what people are actually spending. It’s good to have a ballpark figure!

4.Figure out what you CAN spend. Take a hard look at your savings and income. How much are you comfortable setting aside for travel? Remember to keep a good amount of savings for those unexpected expenses, like bungee jumping in New Zealand and a flight or two home.

5. Do the Math. Now that you know how much you spend per day at home, divide that into the amount of money you CAN spend.  That will give you a rough idea of how long you can travel- you’ll likely spend less on the road, but this will give you a ballpark of a per day budget you’re comfortable with.  Now compare that number to what you researched for your desired destinations?  If it doesn’t match up, think of less expensive alternatives, or regions where travel may be cheaper.  Now that you have a number, compare around.

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