“How could you afford to travel for an entire year?” I’ve heard this question asked in a hundred different ways this year.
I held off on answering partly because I wasn’t sure if our plans would work. We are not wealthy people. I secretly feared that we would have to come back early. Luckily, things worked out more or less to plan. Here are the main takeaways:
Plan your prison break carefully – I’ve said this a lot but it bears repeating: we planned our leap well in advance. We decided that cutting back on expenses was totally worth the effort it if it meant that we would be able to quit our jobs and have the freedom to do exactly what we wanted to do.
So we saved money by living in a one-bedroom, rented apartment instead of giving in to peer pressure and buying a house. We cut back drastically on eating out and entertainment. We drove older cars with no payments. We canceled subscriptions. I bought most of my shoes at thrift stores (good thing too, as I had a thing for cowboy boots and they only cost $20 at Goodwill instead of $200 new). We competed to see who could contribute more of their pay check to the travel fund. No cost saving measure seemed too much when compared to the absolute liberation that awaited.
Relocation not constant travel – Rather than opting for constant travel, our goal was to experience real life in different countries around the world. So we opted for a series of 3-month relocations instead of country hopping every week. This is critical. It saved us a lot of money. It was also more enjoyable than the stress of constantly being on the move. By choosing the 3-month relocation model, we actually felt part of the various communities we lived in, we were able to make friends, lend a helping hand to various meaningful charities and have a deeper understanding of the place we visited. It also meant that we could live in these exotic world cities for an average of $1000/month. That was very little compared to what we were spending at home.
Sell all your stuff – I sold my car and most of our furniture within the span of a week right before we left Chico, the Northern Californian town we lived in prior to our trip. I didn’t make a killing but we made enough to pay for our rent, groceries and entertainment for the first few months of our adventure. Not bad for a ’99 Jetta and furniture we had paid less than $500 for in the first place!
Make friends - In each of the countries we visited we either made new friends or reconnected with friends that we already had. Apart from the awesome social value of having friends to hang out with, these amazing people were generous with their time, networks and ideas. The result? We were hooked up with safe, affordable living accommodations, we were shown where to shop and eat out to save money and were (frequently) directly or indirectly offered income-generating opportunities. This made a big difference financially.
Identify all possible revenue streams (even small ones) – In stark contrast with the traditional rat race model where you work your tail off for one company or organization (which then has a lot of power to control you), we learned that freedom on our travel year had a lot to do with diversifying income streams. We decided that we were not going to hitch our wagon to one single employer (even if we were offered an opportunity to do remote work). Instead we worked hard on identifying and growing multiple income streams. We ended up with the following kinds of work: blog ad revenue, various freelance writing gigs, consulting and other jobs that we picked up on the way. This meant a lot more freedom and the ability to walk away from organizations we did not like.
Don’t buy crap - We stayed away from buying tourist trinkets for at least two solid reasons: 1) They were a waste of money 2) They took up too much space in our luggage. This tactic alone freed up cash to pay for more important things like groceries. In the end, we found a very low cost way to bring back souvenirs for friends and family: right before Christmas we bought non-perishable snacks from a few of the countries we visited and gave them as Christmas presents. That was a lot more cost effective (and tasty) than buying random, made-in-China plates with “Kuala Lumpur” stamped on them…
Buy cheap tickets – Despite a few big mistakes in this area (like buying a round-the-world ticket and having to abandon the final, Mumbai leg), we eventually learned a lot about buying cheap air tickets and saving money that way. The winning formula ended up being this: 1) Buy your long-haul tickets on a reliable, third party discount site like Priceline 2) Buy your short-haul flights from low cost carriers like EasyJet / Ryanair or Air Asia in Europe and Asia respectively and 2) For long-haul flights, buy the day before your flight (you save BIG by doing this because the airline realizes it will make nothing on empty seats) 3) Buy tickets leaving Tuesday – Thursday because these are less popular travel days and therefore cheaper.
Live like a local – We decided that there was nothing ritzy about going into debt by trying to live above our means and living above local standards. So we lived in fairly humble living conditions, never stayed in expensive hotels and almost never splurged on over-priced restaurants that catered to wealthy expats. As mentioned above, we learned that if we lived like locals we not only saved money but we also got a much more authentic feel for what life was like in the countries we visited. For example: we both wanted to see great tango performed in Buenos Aires but instead of dropping $100 on an over-produced tourist show, we accepted an invite from a friend to a fundraiser milonga (community tango dance) held at a local vocational school. The experience was great and we got to help support a worthy cause.
Always have a safety cushion – We did not want to lose our new-found freedom by having to return early to the US or having to return hat in hand, asking for donations. So we decided that, regardless of the fact that we had saved up quite a bit for the trip, we were going to leave a healthy financial cushion for future expenses. This allowed us to travel with more peace of mind and also allowed us to be more selective when crafting our professional plans for 2014 and beyond.
What are your travel budgeting tips? - We have learned so much from listening to the advice of others. How have you budgeted for world travel in the past? What has worked? What hasn’t? Leave a comment and give the CultureMutt community your best advice.