Long-term travel is a dream come true, but budgeting for it is a significant undertaking. When you’re budgeting for long-term travel, you have to have a plan for how much money you need, and a plan for when you get home. These budgeting tips for long-term travel are here to help you make sure you don’t get into a budget bind while you’re abroad.
1. Plan Your Budget by Day By City or Country
Before you leave for your trip, it’s a good idea to build a spreadsheet with the places you think you’ll go, and a rough budget by day for each of these. Generally, budgeting at the country level works, unless you’re visiting places where there are significant differences in cost between cities.
For example, if you’re headed to France, there is a sizable daily cost difference between Paris and just about everywhere else. That might be a time when you separate a “Paris” budget from a “The Rest of France” budget.
My planning spreadsheet had each country, and how much I thought I’d spend by country. For instance, I estimated I’d spend $70/day in Myanmar for 10 days, and $125/day for 13 days in Egypt. This gave me a starting point – even though there were many places where those numbers were off.
2. Make Sure You Find Reasonable Budget Numbers for You
The internet is full of people who have traveled long-term and done budget reports for their trips. This is a treasure trove of information for use in planning your trip, but make sure it’s reasonable for you.
For instance, I didn’t drink alcohol on my round-the-world trip. This kept my food and entertainment costs incredibly low. So if you take my daily spends and try to make them yours, you might find you’ve way under-budgeted for going out.
You’ll want to see if you can get a feel for the travel style of the person whose blog you’re reading and what the numbers represent. Yes, $30/day is possible in Southeast Asia – but are you the kind of traveler who only wants to stay in hostels, have self-organized tours, and eat only street food? If so, great! Go with those numbers. But if you want more creature comforts or activities, know that those numbers won’t work as well for you.
3. Don’t Forget to Budget for Emergencies or Mistakes
When you’re budgeting for long-term travel, it’s easy to not budget for emergencies or mistakes you’ll make. It’s not fun to think about, and it’s hard to budget for. How do you know what emergency you’re going to have or which mistakes you’ll make?
Just make sure to have a “miscellaneous” line item in your budget that can cover missed trains, planes or busses, and the occasional scammed cab ride. I like to have at least 10% of the total budget of the trip as a bit of a slush fund for these things, but you know yourself best!
4. Budget for Splurges and Memories
You’re taking a once-in-a-lifetime long-term trip. Don’t go so small on your budget that you’re not able to splurge on the things you’ll never forget. Yes, if you’re on a budget you won’t do all of the things, but make sure to identify the things that really matter for you.
For me, I’ll never forget taking a sunrise hot-air balloon ride over the Valley of the Kings. I’m so glad that was in the budget. On the other side, I don’t feel like I missed anything by not going up the Eiffel Tower in Paris. Pick the things that matter to you, and make sure to budget for them.
5. Don’t Overestimate How Much You’ll Make While Abroad
If you’re planning on starting a digital nomad type of existence, it can be very easy to overestimate the amount of money you’ll make from your digital nomad work. Unless you have an established client base and income stream you’re taking with you, consider budgeting to not rely on any income from digital nomad work.
If you’ve never travelled long-term before, it’s easy to think that you’ll spend half a day working and the other half sightseeing. But between moving around so much and just the difficulties of figuring out life in another country, you might find you have far less time for work than you planned.
6. Track Your Spend Relentlessly
I’m a big advocate for tracking every penny you spend abroad. You want to know about the dollar tips you handed out in Southeast Asia, just as much as you want to know how much you spent on the hostel at night. Keeping track of your costs, and watching how your daily averages align with what you initially projected will allow you to manage your trip as needed.
7. Have a Budget Plan for When You Get Home
It’s easy to remember to budget for the trip you’re taking. But what about when you get home? If you’ve put your things in storage, you’ll likely need to budget for an apartment deposit and rent while you’re finding a new job. And during that time, you’ll need food, health insurance, water, electricity and other not-as-fun stuff.
Make sure that you have a comfortable window of savings that you can rely on when you’re job searching and getting back to life as usual.