Costs of RTW Travel
How much will it cost?
Is there an easy answer to this question?
No, there isn't, and it's a shame because this, or some variation of it, is certainly the most frequently asked question of all. If your objective was merely to go around the world as cheaply as possible you could buy one plane ticket that included two or three short stops and you'd be done with it for $2,000 or so. But unless you are just trying to win some Jules Verne-inspired bet by doing it, there isn't any point in that.
There are minimum fixed costs that are the same for everyone, mostly relating to transportation. This part of your budget is very inflexible. Long gone are the days when it was feasible to hop freight trains across land and stow away on freight ships over oceans. There are some creative ways of getting around, but they aren't very realistic for most of us who are trying to keep our enjoyment levels on the high side.
So it's pretty easy to roughly calculate your major transportation costs. Start by plugging your rough itinerary into an RTW trip planner and you'll get a basic idea. (Whether or not you should buy one ticket or separate tickets is covered here.) Once you have this general figure you've got your starting point and that won't be any different for a 2-month trip or for a 2-year trip.
But everything after that is completely flexible and up to you. Europe is one of the more expensive regions, but you can hitchhike from Spain to Greece and sleep in campgrounds or even bus stations while eating scraps people have leave behind on their tables. So as long as you don't want to visit museums or have fun at night you could conceivably cross Europe for almost nothing. But is doing it that way a good idea? Probably not.
Sleeping
Everything you add on top of the Bohemian/hippie method is completely up to you. Staying in Europe for this example, a dorm bed in a hostel in Madrid might start around $15 per night, but many people don't like large dorm rooms full of strangers so if that's you, you might be looking at around $40 as an absolute minimum for a private room. It can be tricky figuring out your budget if you haven't yet figured out how well you do sleeping in hostel dorm rooms.
Eating
On the food side of things, it's rather easy and often really enjoyable to get by on very little money, particularly if you'll be staying in a lot of hostels as they usually have a public kitchen where you can store and prepare your own food. Things like bread, cold cuts, and soup are always going to be cheap and easy to get, and even though those things can become interesting tools of your trip. But is it really worth going to Madrid and not going to a few tapas bars for snacks and a couple beers?
Entertainment
And while we are still in Madrid here, you can walk all over town for free, but to walk past the exceptional Prado Museum and skip going in to save the €6 admission fee is an insane way to pinch pennies. When planning your budget you need to remember that the whole point of traveling is to see the amazing things you can't see at home, and some of them do cost money.
Plan Realistically
So when you are figuring out your budget it's important to be realistic with yourself. When you are telling your friends at your local bar about your trip it sounds pretty hardcore when you tell them you'll be sleeping in hostel dorms for six straight months, but after a week or two of actually doing it you are going to want to treat yourself to something better once in a while just to keep from losing your mind.
And subsisting on baguettes and mayonnaise packets can actually be fun for brief periods, but you are going to want to try some local restaurants and bars or you'll totally miss out on part of the fun of being there in the first place.
It's pretty straightforward to add up estimated transportation costs and then figure out a workable daily budget for each country or city you plan to visit, but even beyond that there are some surprise expenses that will inevitably hit you on a very regular basis. We will cover some of those in the next section.
What other expenses should I allow for?
Hopefully you've already worked a "miscellaneous" category into your budget because you are going to need it. When you first start figuring out average daily expenses while traveling it's easy to remember the big things but not realize how many small things you'll be spending money on that can really add up. Virtually all of these are directly proportional to all the other costs in the country so you can usually just add a percentage.
But just to cut down on some future surprises, here are some things that can really start to add up:
Airport transportation - Some airports are close to the city center and/or are on the metro system, but most aren't. Often you can get into town on local buses, but other times pricier shuttles are a far better option, and some places are almost impossible to do without a taxi. This information is pretty easy to find in advance, so don't forget to check into this. And many of the budget airlines land at far flung airports so the long journey into the city can be pricy even on a bus.
Local transportation - Many cities are small enough to be completely walkable, but most large cities are not. Often you can save money by staying on the outskirts, but then you'll need to pay for public transport to get in and out. An all-day pass is often a good option. This is another expense that is easy to calculate if you consider it in advance.
Laundry - You'll be doing your laundry or paying to have it done every week. It's rarely very expensive, but it's also rarely free. You can do it in your sink once in a while, particularly to buy yourself a couple more days before a proper laundry is available, but don't plan on doing this every time.
Internet usage - Fortunately, more and more hostels and even hotels have free internet terminals for guest use, but often they'll be occupied or have a short time limit. Sometimes you'll want to spend more pressure-free time and in some cities internet use can be rather expensive.
Bottled water - In many places you won't want to drink the tap water so you'll (unfortunately) be going through a lot of bottles. Good bottled water is literally everywhere, and it's usually fairly cheap, but on hot days it can add up.
Phone cards - Coin phones are mostly a thing of the past and bringing a mobile phone is probably not worthwhile unless you are addicted to it and are unwilling to give it up. Phone cards, and in some places calling centers, are the way to make onward reservations and call home occasionally. They are usually cheap and getting cheaper all the time.
Visas - This one is easy to miss if you haven't done your homework. Some entry visas cost over $100 for US residents so depending on your route you might end up spending several hundred dollars on these stickers.
Should I avoid expensive places?
Now that you mention it, that might be a good idea. Just because you are going around the world doesn't mean you have to sample every single place along the way. Trips like this are already expensive enough without having to give equal time to some of the more budget-draining regions. We are mainly referring to specific places like New York City, Dublin, London, most of Scandinavia, Paris, Rome, Singapore, and Tokyo. These places, and a few more like them, are very hard to enjoy without going way over your normal daily budget.
If you've been there before or are fairly certain you'll have an opportunity in the future to visit these places it can be a wise move to avoid them on your RTW. You can easily spend 10 days in exotic rural India for what you might spend in one day in Stockholm. So by saving Stockholm for another time you can spend much longer in more affordable regions, and even be able to treat yourself to a bit of luxury there in the process.
Of course this is a very personal decision. If a place feels like it will be one of your highlights and you don't think you are likely to have a chance to get back there any time soon, then by all means include it this time. There is a travel cliché that says you should always assume you'll be coming back to a place again, but that's just a little trick to keep yourself from drowning in regrets for not having seen every last thing. The reality is that for most of us and most places, we won't be coming back. But even with that in mind, if you are intending to travel for a long time on a limited budget, skipping places like these can make a lot of sense.
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