by To finance a trip around the world, you need a budget. There are two parts:
- Saving money.
- Building the budget.
Both go hand in hand. It’s impossible to take a world trip without savings, and impossible to know how much to save without creating a budget.
In this article, we’ll focus on building the budget.
How do you make the budget?
Everything depends on what kind of around-the-world trip you’re doing and which countries you plan to visit!
The length of the trip matters a lot. Certain places are much more expensive than others.
For a world trip, there are four main categories, plus certain fixed costs.
Categories
Transportation. This includes cars, flights, trains, gas, RVs, etc.
Accommodation. Airbnb, camping, hotels, motels, etc.
Food. Restaurants, groceries.
Activities. The reason you travel, right!
Fixed Costs
- Health insurance
- Backpack and gear
- An RV
- House maintenance
- Storage rental
Variable Costs
We divided the world into four cost levels: low, medium, high, and very high.
Then we assign a daily budget to each region and adjust it up or down as needed. It’s all about averaging.
This way, we can modify the overall cost of our trip by changing how much time we spend in each cost tier.
This daily amount includes lodging, food, and activities.
Low — $80/day: Kosovo, Bosnia, Montenegro, Albania, Thailand, Vietnam
Medium — $120/day: Croatia, Slovenia
High — $150/day: Belgium, United States, Italy, South Korea, Australia, New Zealand
Very High — $180/day: France, Japan, Singapore, etc.
Our Plan
We live in a house, so we have three options:
- Keep the house and leave it as-is until we come back.
- Keep it and rent it out (short or long term).
- Sell it.
Our current plan is to sell the house, simply because…
- It’s in a very expensive area and we’re worried about a housing bubble.
- We want the freedom to settle somewhere new after our trip. Who knows—our tastes and needs will probably change.
- We don’t want to manage a house from a distance.
So, we will sell. And if we can’t, then we’ll rent it out.
Which brings us to the second part:
What do we do with all our stuff?
Our plan is to donate/throw away as much as possible, sell another portion, and reduce to the bare minimum.
Our target ratio is 50% donated/thrown away, 25% sold, 25% kept.
I call this “a lifetime downsizing.”
It allows us to reduce our belongings to the essentials.
We’re using Marie Kondo’s method: it’s simple—if something doesn’t spark joy, it goes.
The hardest part will be the kids’ toys. For them, they’ll have several memory boxes and a backpack each for their favorite items.
As for me, I’m getting rid of everything… except a few books and video games. 😉
Everything else is gone. I’m keeping very few mementos, since we’ve digitized everything.
We’re getting rid of almost all kitchen items and all our furniture.
Beds and mattresses are being sold or donated.
Cost: Storage unit rental.
We’re aiming for minimalism here too.
The smallest unit is 5ft x 5ft x 8ft = 200 cubic feet.
Enough for 133 small boxes, or 50 large boxes.
When you look at it that way, it’s huge!
Cost: $1800
Health Insurance
We’ve heard a lot of good things about WorldNomad, so we’ll probably go with them.
Plus, I need to sort out several credit cards—some offer medical coverage, trip insurance, cancellation protection, etc.
Cost: $2000
Transportation
This part gets complicated!
Most Europeans seem to choose RV travel (campervan) and ship it around the world.
That combines transportation + accommodation, but it’s restrictive, hard to drive into cities, and shipping costs are outrageous.
So we’re going with several modes of transport:
United States:
Road trip from west to east.
We’ll use our car and sell it around New York City.
Europe:
We’ll lease a car for six months—Peugeot Open Europe offers the equivalent of a Toyota Sienna for ~ $4500.
We’ll use public transport in big cities.
Trains between cities get expensive with a family of five.
Asia:
Public transit, taxis, etc.
Australia/New Zealand:
We plan to rent an RV to explore Australia.
And finally: flights.
We can optimize a bit and hunt deals, but it’s still tough since we want to stay flexible.
Round-the-world airline tickets exist, but they’re not very flexible:
- You must use airlines in the same alliance
- You can’t backtrack
- Most are limited to 1 year (and we want to travel for ~500 days!)
Once we add up our major flights, factoring in five tickets, we get a total of ~$10,000.
Costs
- Car lease in Europe: $3000
- RV rental in Australia: $6000
- The rest is spread into variable daily costs
Gear
We need good backpacks and various travel essentials.
Cost: $1000
Conclusion
We plug all the numbers into a spreadsheet so we can experiment.
Our total comes to $93,000, which fits comfortably under our $100,000 budget.
Not bad for a family of five traveling for 18 months!
