People ask about our travel budget and how we afford to travel as often and as long as we do. It still surprises me that anyone should care about our finances, but I guess that’s the world we’re in because of the blog and because we’ve been on this round the world trip for almost 4 years. We want to help people live their dreams, sharing how we manage financially and how we budget has to be part of that.
We’ve travelled around the world on what seems very little money, while still owning a house in Australia and almost buying another in Romania. It’s pretty unusual. So here I’ll explain how our travel budget works, or how it doesn’t.
This morning my lovely friend Heidi of Wagoners Abroad was asking about how we, and others, budget. I told her that we don’t. I don’t think she believes me.
” Everyone has a budget! It is how much you can spend each day/week or month…. if your paycheck is $100 then that is your budget… unless you want to be in debt and spend $150…. it is simple. you probably budget or “keep track” of what you are spending or want to spend.”
Another blogging friend, Manf of Renegade Travels doesn’t budget either, he says:
“(I) Never budget but just spend what we need to. I’ve been spending for long enough to know what’s affordable and what’s not. I know it intuitively I suppose.”
I think we’re the same as Manf.
A long time ago a bloke that I didn’t know from a bar of soap, accused me of setting an unrealistic budget and not doing my research.. My money, my system, we do what works for us and I do more research than anyone would believe, although I’m trying to cut down, it wastes a lot of valuable time.
First Some Background About Us and Our Finances
- We are not rich, we do not have pots of money nor a significant online income. We don’t have financial support from family, investments or any other business.
- We did not sell our house, that was something suggested by another blogger this week, as one of the ways families like ours manage financially. Some do, some see their mortgage as a financial trap and are better off without it. We still have a very small mortgage on the house we don’t live in, which our tenants cover. That house is our investment.
- We are almost digital nomads. The income we make online almost covers our expenses. This means we can be location independent and earn anywhere we find ourselves. We are not quite at that point yet, after 4.5 years of blogging.
- We usually travel long-term, backpacker-style, for that is what we enjoy. We do not house-sit to save money as a preferred method. Some do, even families
- Sometimes we base ourselves somewhere for a while. When we’re not travelling I’m a full-time mum and educator but I also put as many hours as I can into the websites. Full time travel always leaves us short of time.
- My husband is a chef, not a job you can do over the internet. He works occasionally in London in a top 5 star hotel. He has a UK passport and pays UK taxes. He does not work as we travel, low industry wages and working visa requirements make that impossible.
- Our style of travel costs less than staying at home paying mortgage, utility bills and shopping for pleasure. That is what makes our financial needs low, that is why this works.
Budgeting While Saving To Leave Home and Travel.
While saving for our departure and first year of travel we really cut our spending down to the bone. $30,000 was the travel fund we were aiming for. We saved that amount in a year. Below are some of the methods we used to save.
- Set an at-home budget. Ours was $200/week at first, over time I reduced that still more as I got better at being frugal. I took that amount of cash out of the bank every Thursday and that was all I spent, I stopped using cards completely. If I didn’t have the cash, I couldn’t spend it.That figure covered diesel for the car, food, clothes, toiletries, wine, toys, everything we all spend money on every week. ( I include wine because I’m not willing to sacrifice every pleasure in life!)
- The mortgage and utility bills still need paying, nothing we could do to avoid them, so they weren’t included in that weekly spend. We reduced our consumption of electricity and gas as much as possible, we stopped using air-con completely and found ways to cook more economically.
- If under budget in any week, keep that cash and take out less from the bank the next week. Keep that starting amount constant. Mine was always $200 ( or less, I know we got much lower than that in the end.) Being under budget is not an excuse to splurge.
- All windfalls and bonuses go straight in the bank to grow the travel fund. Never celebrate them by spending.
- Get pleasure out of going without and watching the savings mount up. It does get hard at times. The boredom of not being able to go anywhere gets to me. I’d rather not live that way, but for just a year of mild tedium, we bought our freedom. Boost moral by keeping a chart and watching the savings grow. Have a treat now and then. For us it was coffee and cakes on the Thursday we withdrew the week’s money.
- Boost your income in any way you can, take in lodgers, sell crafts or produce, work longer hours. Put this money straight in the travel fund.
The Travel Budget For Year 1 of Round The World Travel
We knew that we would have roughly $30,000 in the bank at the time we left Australia. We knew that we wanted to make that money last as long as possible and set the goal at 2 years. At that time we anticipated spending most, if not all, of our time in Asia travelling incredibly slowly.
$30,000 divided by 2, divided by 365 gave us roughly $40 per day. So that is the goal we set ourselves, to see if we could travel as a family of 4, on around $40/day.
We did OK, some countries are cheaper than others, we came in under $50 most of the time. It’s pretty easy to do in the cheaper parts of SE Asia. We’d stay longer in the cheaper parts, speed through the more expensive parts.
We never kept detailed records nor used any budgeting tools, we just use mental arithmetic, my husband has a good head for figures. I don’t feel any need to have a record other than that created by the bank. I don’t see why you’d need to, unless you were writing a book or posts on the subject, which we weren’t.
How We Made Our Travel Budget That Low?
- The children were small, just 6 and 8 years old, they didn’t eat much and we could all share 1 double bed at times. We never took a room with more than 3 beds back then and usually had child-stays-free deals. The cheapest rooms we found were just $12/night in Laos and Thailand, the most expensive $150 in New York, Times Square.
- Sometimes we book room online, sometimes we arrive and knock on doors until we find a room we like at the right price. You can negotiate face to face, you can’t online.
- We ate at regular backpacker type restaurants. Street food would be even cheaper but we like to sit down over meals. To give you an example of costs, a meal, such as pad thai is usually about 30-50 Baht. That’s less than $2 each. We often cut down to 2 meals a day and I lost a lot of weight, which was a good thing. I wasn’t hungry, you get used to smaller portions of healthier food in Asia. Tourist restaurants will have much higher prices, you need to find the right places, look at menus as you walk down the street, see who is charging what and get an idea of what you should be paying.
- Stay longer in the cheaper places, fly through the expensive ones.
- Don’t book tours and excursions, getting yourself there using public transport and ingenuity saves hundreds of dollars. For example, we recently vising Phang Nga Bay in Phuket, Thailand, a tour was around $100 each and there were 5 of us. Instead we hired a boat privately, it cost us under $100 total.
- Be flexible with flight dates, flying on a different date can save you huge amounts of money. Use Skyscanner to check prices by day.
Then Things Changed.
After just 6 months on the road we ended up in the UK because of family illness. That put us on the expensive side of the world and the ticket to get there hit us in the pocket. That 2 year spending plan went out of the window and we just decided to have a good time!
But having a good time doesn’t necessarily mean spending a fortune, it means spending what you need to spend, no more, no less.
We costed out our first year of travel at just under $100 per day. We were happy with that and you can read about how the money stacked up here. That was roughly the same amount we were spending at home ( including mortgage) during our very boring saving period.
It amazes me that single young people class travelling on $50 per day as “budget”. To us that would be a fortune, $200 a day for the 4 of us, twice what we spent.
We took 2 trans Atlantic cruises and visited 4 continents on that $100 a day.
Our Travel Budget Now. Do We Have One?
We no longer have a travel budget of any sort and now, 3.5 years into this round the world trip, our travel style has changed slightly.
We spend as little as possible on things we don’t care about, yet at other times we spend big. We always look for the absolute cheapest deals and find many free things to do, but we’ll happily splurge on an incredible day out for the kids or a special destination.
This is what round the world travel looks like for us now:
- We no longer travel continuously. We have a base in Romania that we return to for months on end. It’s in a beautiful village, life there is amazing and it’s cheap.
- We also return to London regularly.
- When we travel it tends to be a month here, a month there. Sometimes consecutively, sometimes stand alone trips. In 2016 we have visited around 15 countries. 5 were trips of a month or so. We still tend to call ourselves full time travellers because we haven’t been back to Australia since the day we left.
- We are professional travel bloggers so we get invited to luxury hotels as influencers. We don’t pay. If you see us staying somewhere expensive it’s usually work. But not always. This place was my birthday treat, no work on my birthday!
So obviously, different countries require different budgets, Greece cost more than Thailand, Nepal worked out quite expensive and London always hits us in the pocket. Everywhere we go, we simply make sure we spend as little as possible. We don’t shop for pleasure, we only buy what we need. Frugality and minimalism have become habit.
Last time we were in London I wrote a post about how we were having a fun time on one salary and still saving money to travel, that post is here. London is one of the few places we occasionally house sit. With London hotels costing us from £50- £100 pounds per night, it saves us a lot. My husband works as a chef when we are in London or we couldn’t afford to be there.
Our spending is based on value for money. OK, so 5 days in Dubai cost us a lot, but the experience was amazing and far more enjoyable than spending an extra few weeks sitting doing not-much, anywhere.
I contradict myself sometimes, quite often probably, because life changes and never stays the same. Sometimes we’re happy to sit still and save money ( that old slow-travel thing) sometimes we need a bit more excitement. Before we left Australia we intended to slow travel the world because that’s what all the family travel bloggers talked about. We found that we really didn’t like that much so we went back to what we love, backpacking.
What I’m trying to say is that you need to spend enough to make yourself, and your kids, happy. A good friend recently described us as being of above-average happiness. I like that, it made me smile, a lot of that happiness comes from having lovely people like her in our lives. I certainly feel incredibly happy and privileged to be living this incredible life.
Money can buy many of the amazing experiences that make up a lifetime of memories and beating yourself up over sticking to a budget that prevents you grabbing those experiences isn’t conducive to a happy life.
So no, I won’t buy myself a new pair of shoes or a haircut, but I will buy a plane ticket. To some it makes no sense, but to us it does. It’s not a budget I’m sticking to, it’s a lifestyle choice.
We have money in the bank, something we’re really particular about. We never spend right down to the bone. If I want to buy the kids another Lego set or take them to the zoo, I can. But I won’t waste money on things I don’t consider important. If it makes us happy we spend, if it’s something of zero importance to us, we don’t.
No Travel Budget.
So no, we don’t have a budget. I don’t know how much we’re spending at the moment. We’re spending less than is coming in and the savings are increasing, but I couldn’t give you a figure.
We don’t have a budget for our next round of travel, it could be something dirt cheap, to fill time in an enjoyable way, or some big budget bucket list item. We don’t even know where we’re going next, we haven’t thought about it.
We don’t use budgeting apps, spread sheets or even a pencil and paper.
I have a particular dislike for being asked “What’s your budget?” The last time somebody asked me that question they were trying to sell me a mobile phone. I will always answer “As little as possible”. I know that if I set a budget Mr. Phone Salesman will sell me a phone just 1c under that budget, when the reality is, I could have spent a lot less.
If you set a budget, you will spend to that budget. Which is why people on good salaries always think they need more.
We just have a good time, our way, on as little money as possible and when the money runs short again, we go back to work.
Are We Part of The New Rich?
I think maybe we are.
The “new rich” is a concept I’ve just come across through reading The 4-Hour Workweek: Escape 9-5, Live Anywhere, and Join the New Rich. I know it’s an old book and a best-seller, but I’ve only just discovered it.
We don’t have a business we run remotely on just 4 hours a week, but the book has given me some great take-aways on how to work on the websites more effectively. We do live what many would consider a millionaire lifestyle of travel and free time on minimal annual working hours, and that is who the new rich are. We’re living the life, we’re still working on the income.
Our way is working, for now, we’ve found a balance of work: free time : spending that suits us. If it stops working, we’ll change it all around again.
If you want help with budgeting I’d recommend you’d go and see Heidi ( at the link above) she’s far more organised than I am and a lovely person.
Got any questions? Stick ’em in the comments!