Budgeting is a vital part to a RTW trip. Whether it’s the months and years leading up to the trip or the trip itself, budgets consume many RTW travelers. Contrary to popular belief and despite the myths that abound about long-term travel, most RTW travelers are just normal people who made travel their priority. In order to make this happen, adhering to a budget is essential.
There are plenty of tips on BootsnAll about saving money and budgeting for a long term adventure when you’re in the planning stage. Since this is the On the Road stage of the RTW section, though, we thought it’d be a good idea to address budgeting while you’re actually out there.
The Importance of a Budget While Traveling
Budgeting doesn’t end the second you step on that first flight. In fact, budgeting while you are on your trip is probably more important than in the saving stage since you most likely aren’t going to have any money coming in. You have no doubt worked your ass off while preparing for your RTW trip, forgoing nights out with friends, eating as cheaply as you can, and never buying anything that isn’t totally necessary. You did it all for the trip.
Now that the trip is here, you’re no doubt going to want to let loose a little bit, which is to be expected if you were on a super tight budget for months or even years leading up to the big trip. You’re going to have to rein it in a bit though, as you didn’t work that hard to blow your budget at the beginning of your trip. But if you’ve done your homework and planned your budget properly, you should know what you can comfortably spend on a daily basis.
Keeping Track of Spending
Everyone has a different way of tracking their spending. When at home, it’s nice to be able to use a site like Mint, which tracks everything for you. The problem with sites like Mint is that you still have to keep track of cash spending, and when you’re traveling, particularly in developing regions, you are most likely going to be pulling money out of the ATM and spending cash instead of using credit and debit cards.
Writing down everything is a tactic some RTW travelers use. Yes, it’s annoying to write down every single penny you spend, but those who keep track this way are typically the same ones who stay within their budget. When we were on our RTW trip, I carried a notebook around with me at all times, writing down everything we spent. And I’m not talking just meals and hostels. I’m talking everything! Spend 30 Baht for some meat on a stick from a roadside stand in Bangkok? Write it down. Spend 25 Bolivianos for a bottle of shampoo in La Paz? Write it down. As a result, we came in just under budget for an entire year of travel without working a single day. Did I hate it at times? Yes. Have I been reluctant to have a budget since returning? You bet. But we didn’t go over budget on our trip, which was very rewarding.
If you don’t want to write down every single thing, you can estimate on a daily basis and then check it against your credit card and bank statements each week or month, depending on how you want to make it work. Keep in mind the longer you wait in between balancing your budget, the easier it is to let it spiral out of control. We all know how easy it is during a night out to buy that extra round of shots or have just one more beer. When you’re not holding yourself accountable for your spending on a daily basis, your bank account can start going south a lot quicker.
It’s never fun to do a double take at your bank balance, wondering where it all went wrong, which is why it’s vital to keep track of what you’re spending. Most of us are used to one or two week vacations, where it’s a lot easier to just say “Screw it” and spend more than initially planned. When you only have a week and are going back to work, rationalizing is easy. But if you do that too many times during a RTW, you are likely to have to cut your trip short by weeks or even months.
Another good tactic for keeping track of your spending is to have a master spreadsheet, particularly if you are traveling with a laptop, smart phone, or tablet. It takes a few minutes each night before going to bed to plug in what you spent, and having a daily budget helps you stay on track. I was a bit fanatical about our budget, but like I said, we stayed on track because of it. Here is a screenshot of our budget spreadsheet:
Dealing with Big Expenses
There are always going to be large expenses that pop up during the course of your trip, some planned and some not. That’s why it’s always a good idea to have a slush fund of sorts for those miscellaneous expenses that you don’t always plan for. How you do it depends on the person, but it may be a good idea to do it by country. If you’re going to New Zealand, for example, you should know from your research how much you’ll spend on accommodation, food, and transport. But if you’re an adventure sports person, you’ll most likely want to take part in some of the extreme sports on offer. These are pretty expensive, so get a miscellaneous budget in place for New Zealand. You probably won’t know exactly how much you’ll need because you won’t know exactly what you’ll be doing, so it’s always a good idea to aim high. Having money leftover in the slush fund is much better than going over-budget.
What to Do If Going Over-Budget?
If you hit a point where you are constantly going over your proposed budget, then you quite simply are going to have a few decisions to make. You didn’t save all that hard-earned money and sacrifice a job, a house, and a steady life so you could come home 3 months early and broke. If you didn’t estimate properly, you do have a few options:
- Start cutting back – You most likely had to work hard to cut back while saving for your trip, so you know how to sacrifice. If you are constantly spending more than you thought you would, simply record what you’re spending and cut something out. It could be less drinking at bars (or less drinking all together), it could be staying in dorms instead of privates, it could be eating out less. Whatever your poison, stop now before it’s too late.
- Cut your trip short – Not many people really want to do this, but the thought of scrimping and cutting back might sound worse. It’s up to each individual, but some may rather continue on spending too much and cut the trip short by a month or two. Remember, you are going on this trip to create lasting memories, and sitting in a hostel common room instead of going out just to save money might not be what you had in mind.
- Get a job – There are a lot of people who supplement their income during their trip by picking up odd jobs here and there. Working at a local or hostel bar, getting a job teaching English, waiting tables, or picking up freelance work as a digital nomad are all possibilities. If you want to continue spending the same way but not cut your trip short, then contemplate working for a bit.
- Slow down! – One of the best ways to blow your wad is to travel fast and see as much as possible. Not only will this blow your budget, but it will make you a prime candidate for travel burnout. Slow down, stay put in one place for a month or so, immerse yourself in the culture. If you’re traveling with someone else, consider getting an apartment for a month or two to cut back on costs. You can often get an apartment for less than a hostel bed, and having your own, private kitchen can save tons of money on food.
Part of the culture in places like the US is to really let loose while traveling, splurging constantly and always rationalizing. While this may work for a one week vacation, it’s not going to work for a RTW trip. Budgeting while on your trip is an essential part of the RTW experience, and it forces you to be smart in order to travel for the length of time you had in mind.
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