Ready, Set, Save: How We Budgeted for the Trip

Saving Every Little Bit

After we started discussing our desire to travel the world, the next question that immediately came up was “How can we afford it?” Was it realistic to think we could do something like this? It took a lot of research, a conscious effort to cut back on our spending and ramp up our saving, and a lot of planning to put us in a position financially where we are able to travel for a year or so. Here are the steps we took to get here and to budget for our trip.

1. Set a Goal

So, how much does it cost to travel? There isn’t a right answer to that question.  Some people could spend $10,000 on a two-week trip to Europe.  Others could live comfortably for a year staying in one place for the same amount of money. We are planning to travel somewhere in between these two extremes, keeping a close eye on our budget but not killing ourselves to save every last dollar.

Our general goal is to travel on roughly $50-$60 per person each day.  This might seem absurdly low, but we did enough to research to know that this is very realistic and doable. In fact there’s an entire book devoted to traveling the world on $50 a day. We may end up spending more in pricier areas such as in Europe, Australia or New Zealand.  However, these high-cost locations will be offset by places such as India, Cambodia, and Vietnam where the cost of living is much lower. Figuring out how much we would spend allowed us to set a savings target.

2. How we Worked Towards Our Goal

 Here are just a few of the ways we were able to cut back on our spending, boost our savings and make our money work for us:

• Eating breakfast and making coffee at home in the mornings
• Bringing our lunch to work instead of spending ~$10 each day to eat out
• Cooking dinner most nights and skipping the alcohol when we did go out to eat
• Putting a moratorium on buying any new clothing, gadgets, or other things that we didn’t need (having a tiny NYC apartment with no extra space helps)
• Fewer taxis and more walking, biking or riding the subway/bus/train
• Putting our money in a CapitalOne 360 savings account that pays 0.75% in interest (not great but better than the 0.01% that most accounts offer)
• Opening up a couple of CDs that paid in excess of 1% interest
• Investing our money in stocks and mutual funds
• Using credit cards for almost every purchase to generate as many points/miles/cashback as possible
• Taking advantage of free money that Chase bank was giving away (We managed to score about $500 by opening various checking and savings accounts with them)
• Using coupons and promo codes whenever possible.  There’s a great plugin called Honey that automatically identifies promo and coupon codes for whatever website that is open in your browser.
• Putting almost all of our bonuses or gifts that we received directly into savings

3. How we Tracked our Progress

We kept a detailed spreadsheet of all our finances and our savings goals so that we could keep a close eye on how we were doing. We’d update this spreadsheet usually at least once a week, sometimes more if we had updates to plug in.  It was exciting to watch ourselves slowly make progress towards our goal.  We also tracked our airline miles and hotel points on the same sheet.

Mint has been another great resource for us throughout this process.  It enabled us to track our spending by category as well as consolidate all of our accounts onto one page.

 4. How we Plan on Making our Money Last on the Road

The last step is figuring out how to actually stick to our budget when we are on the road so that we can travel to all of the places we are planning on seeing.  Here are a few of the ways we are going to try and stretch our dollar as far as possible:

• Accommodation

• We’ll stay with friends and family, especially in Europe, whenever possible.
• Staying at hostels (We won’t go ultra low-budget and try to cram into a 10-person room with bunk beds, but we’ll get private rooms with shared bathrooms which are generally cheaper than hotels.)
• We are planning on WWOOFing for a week on a goat farm in Cognac, France, so we’ll have free room & board while we’re working there. (Video and pictures of this experience will be posted as soon as humanly possible)
• We’ll try to book apartments from time-to-time as well when it makes sense and when they can be found for cheaper than hotels.
• In a few spots, we’ll make good use of all the hotel points we’ve accumulated over the years to score some free stays.

• Transportation

• We will try to limit the number of flights as much as possible.  For the flights we will take, we’ll look to use our miles to cover them whenever possible.
• We’ll skip the taxis and utilize public transportation (metro, buses, trains). This is something we’re already used to living in NYC so hopefully it will be a smooth transition in most places.
• We also may try to use ride-share services such as BlaBlaCar.

• Food & Drinks

• Eating good food has always been and will continue to be a top priority for both of us. We’re looking forward to eating the local cuisine, but will try to stick to spots that cater to locals and stay away from the tourist traps. More street food and fewer 3-course meals.
• We’ll take advantage of the kitchens in hostels and apartments so that we can cook food whenever possible.
• 3€ bottles of wine will be our best friends.

• Activities & Sightseeing

• A lot of our time will be spent doing things that cost very little or nothing at all: Getting lost wandering around and exploring wherever we are at the moment, hiking, sitting on a beach, people-watching, etc.
• Of course we want to hit the highlights and see the main attractions in each city, but we’re going to do so with an eye on cost. This means doing self-guided tours rather than paying tour guides, taking advantage of free or reduced cost visiting hours at the museums we want to visit, or buying travel discount cards at the local tourism office to get the best deals.

• Banking & Spending

• We will use credit cards as much as possible as they offer the best exchange rates and we’ll continue to earn miles and points while we travel.  All of the cards that we’ve opened have no foreign transaction fees, which will help cut down on unnecessary costs. Also, they are all equipped with chip & PIN technology which is pretty much the standard outside of the US.
• In order to avoid ATM fees every time we withdraw money, we opened up a Charles Schwab Checking Account.  This is a no-fee account that reimburses you for all ATM fees worldwide.  It is considered the go-to checking account for international travelers. The ATM cards also come equipped with chip & PIN technology.

We’ve been planning for a long time now and are excited to put our plan into action starting August 11th! We’ll be monitoring our spending as we travel in order to see how good of a job we are doing sticking to our budget.

-The Morts