Thinking about taking a year to travel? This guide will provide you how much and how to save for a year of travel. Kickstart your savings journey the right way!
Hey good looking. I know why you’re here.
You’re what people call a wanderlust, a travel bug, and an adventurer. You’re probably also looking into taking an extensive trip around the world.
You’re in the right place.
Mostly because you’re here wondering about…MONEY. MONEY! So, let’s talk money ladies and gents. Let’s talk dollar bills! Let’s throw up them hunnits! LET. IT. RAIN-
Oops. Sorry, got carried away.
I’m on this epic Lord of the Rings-style journey around the world. Not really that epic, I just look like a hobbit. Even though I’m freelancing while traveling, I did save up and wrangle enough money for a year of guilt-free travel. Before we discuss budgeting for travel, I want to say this:
→ One, to budget for travel you must first learn how to budget – wait for it – in life. What this means is you need to learn the fundamentals of personal finance. Handle your money, show it who’s boss. Learning to automate your finances and save what you earn will drastically propel your ability to budget for anything, not just travel.
This post will be split into three sections. We’ll start with the fundamentals of personal finance. Then we’ll sum up how much it cost for a year of travel according to travelers of different style. I’ve read through so many travel budget sheets that I went ahead and picked out the top for you here. At the end, I’ll show you how to figure out how much to save per month moving forward. If you skip the first section you will live a life of shame, shame, shame! -rings bell as you walk down town Game of Thrones style-
Just kidding, but seriously. Read through the entirety of this guide if you’re serious about saving for long term travel.
Section 1: First, Some Money Management Advice
It’s great we want to travel but travel requires money.
If you’re reading this blog, I want you to be the kind of traveler that returns after a year with money still left in your account. To do this we have to talk about personal finance.
The best, most handsome personal finance advisor out there is Ramit Sethi. He calls himself your Asian surrogate father. Why?
He teaches you how to be rich.
Give me a halleluah!
Using Ramit’s money management advice has allowed me to save up for travel while being careful of my debt, 401k contributions, and other really annoying money-related things that we got to pay attention to. And listen, I’m the worst with my money. I spent $23 on a poop emoji pillow. Dude I don’t know why.
Ramit wrote a whole book and even built an easy-to-navigate website that details everything you need to know about personal finance. I know some people will go, “Gosh TJ that’s way too much stuff to read!”
No worries. I’m pulling some of his best advice here that will ultimately help you save for travel. (Still, do yourself a favor and buy his book. One of the best $8 investment you’ll ever make in your life).
Here’s how Ramit suggest you spend your money:
What this chart is saying is that every time you take home a paycheck, a certain percentage of that should go into these four categories. As you can see, fixed costs should eat up most of your paycheck. What’s awesome is that this model proportions 20-35% to GUILT-FREE spending money. Money you can use to spend on a Starbucks not-so-Christmas latte cup or an emoji poop pillow. What he’s suggesting is that if you treat your money right, YOU CAN TOTALLY SPEND SOME TOO!
Taking the structure Ramit recommended, I adjusted it to my lifestyle knowing that I wanted to travel for an extensive period of time. In section 3, I’ll show you how to use this model to figure out how much to save per month for your trip.
Here are three additional things to do with your money before you decide to spend it on a year’s trip:
Investing here doesn’t mean playing with stocks. I know that’s sexy and cool and lots of my friends are obsessed with it. Sad thing is most people don’t know what the hell they’re doing and have not earned much back from playing with stocks.
What we’re talking about here is not sexy and cool but SMART and WORKS 100% OF THE TIME. Now that’s hot. And that hotness, is the magic of retirement accounts.
BUT I’M IN MY 20S Y I NEED To SAVE FOR WEN Im OLD!1
I know, I know. But read this:
“If you’re 25 years old and you save $100/month until you’re 35 (for only 10 years, then you never save money again), and your dumb friend starts later – saving $100/month from age 35 to 65 (that’s 35 years compared to your 10 years) – you will have way more money(over $50,000 more) than him at age 65.” – Ramit Sethi
Don’t be that dumb friend.
Do not completely drop contributing to your retirement funds.
I know a lot of my readers may be or were recently students, both college and graduates, who are bogged down with student loans. Read this: Pay Off Student Loans or Start Investing: What’s the Better Choice? before continuing.
2. HANDLE YOUR DEBT
Please note what I’m talking about here are PERSONAL LOANS and CREDIT CARD DEBTS.
I’m going to say something that you’ll hate. Don’t drop everything to travel if you haven’t been diligently paying off your debts OR if you don’t have a plan to pay some off during the trip.
Boom. I hate being the bearer of bad news but it’s so important to travel responsibly. Why am I saying this? Because during the year you’ll be like this :)!! And then when you return you’ll be like this :'(( worrying about the ample amount of debt you’ve accumulated with the interests of a whole year. Money will also began to stress you out as you travel which is the surest way to ruin your experience.
If your wanderlust game is strong, make money while traveling so that you’re still paying off a portion of your debt each month. Watch this: How to Make Money Online & Work From Anywhere Video.
OR, include repaying your debt as part of the travel budget so that every month you’re travelling you’re also paying off some of those nasty negatives.
Stack method is a good strategic approach to paying off your debt. Read here: “How to Pay Off Debt Fast Using the Stack Method“
3. BIG SAVINGS & PRIORITIZE SPENDINGS
Personally I hate the idea of cutting back but I’ve realized that poor spending habit is a result of lack of prioritization. Even though 20-25% can be put towards guilt-free spending, you got to cut that by 10-15% and put it aggressively towards saving for travel. Notice how we’re not taking the money out from your retirements funds or debts repayments. What I’m saying is that $120-300 you spend on festival tickets could equal your month’s saving for a year of travel. And you won’t be affecting your ability to be rich later in life because you’re not pulling it from your retirement funds. That’s crazy.
Another way to be smart is rather than mustering up your entire self-control to save a few dollars a day, here’s a few things you can do instead to SAVE HUNDREDS:
→ Negotiate your salary.
Before becoming a travel vlogger/blogger, I spent a ginormous amount of time researching and writing about career building. The BIGGEST, SADDEST thing most people are doing right now is undervaluing themselves. Now, the backlash to that is wow you are such an entitled prick, you millennial garbage, blhalbhah blah – I know. Listen, if someone is a piece of doodoo who doesn’t do good work, I don’t want them to get paid higher either. I’m talking about top performers. Top performers believe in hard work to get the things they want in life. But if you’re a top performer, you also have to know this: you got to ASK for the things you want. Top performers ASK. Ask questions, ask what the problems are to discover opportunities, ask for advancements, and absolutely ask for higher salary. Here’s how you can negotiate your salary written by my kickass friend Valerie.
Stop eating at Mcdonalds so you can save. Think about how you can EARN more.
→ Lower your bills! (I saved $120 on my phone bill in a 10 minute phone call. That’s $120 saved for travel in just 10 minutes).
→ Cancel unnecessary monthly subscriptions. That $25 monthly subscription box…girl, don’t even get me started. That’s $300/yr that could be put towards travel.
Think about other ways you can save a ton of money quicker & smarter. No black market business though..ok?
Once you start doing these things with your money, you’re going to find saving for a year of travel to be much easier and less stressful. Automating your finances and being smart with your income will only ensure good things in life – including a trip around the world.
Section 2: How Much it Cost to Travel For a Year
Now, let’s talk how much it cost to travel for a year. Then we can figure out how much you need to save.
As with everything in life there are people who do things one way, and others who do things another. Some people travel with frugality while others prefer to travel with luxury. I want to show you how much it cost for a year of travel depending on the type of traveler you are.
For Comfort Travelers
There are many people who do not want to couch surf, cook their own meals, or avoid spending at all cost. Some people are comfort travelers as opposed to someone on a tight day-to-day spending limit.
Jeremy from LivingtheDream spent $11,974.69 in 167 days of travel. His daily average was $75.66, meaning he would’ve hit around $27,000 on a year trip. A part of Jeremy’s trip included luxury travel that included staying at nicer hotels or visiting tourist attractions during peak seasons. Jeremy also makes it clear that he doesn’t define traveling on a budget as going cheap.
If you’re more of a comfort traveler, check out his spendings breakdown.
For Strict Budget Travelers
Jamie, from Breakaway Backpacker, spent $27,696.22 for TWO years of travel, making it around $13,000 for a year. Now that’s a man on a mission! Jaime points out that to save money on accommodation, he stayed with people who he had met prior on the road or even some of his readers. At times he’d book long train rides to sleep overnight or sleep at the airport. But guess what? He was able to visit 30 countries and made over a million memories, all around the world.
If you’re more of a budget traveler, check out his spendings breakdown.
For Solo Female Travelers
The reason why I’m making this a category is because one, a lot of my readers are female and two, female travelers travel differently. For example, additional spendings on safer accommodations.
Shannon from A Little Adrift, one of my favorite travel bloggers, meticulously documented her day-to-day spending for an entire year. She spent a total of $17,875.
You can also download her budgeting template, all here.
If you’re in a relationship and want to travel as a pair, this Bay Area star lover will be your best couple friend. My ex-boyfriend sent this to me and it was the first time the idea of quitting your job to travel got planted in my head. Thanks ex-boyfriend. No thanks for other breakup crap though.
Gerard and Kieu from GQ trippin both took a pause from their career to travel long-term. They spent $24,488 per person for a year. They prioritized finding private doubles over hostels, didn’t hold back on eating but shared meals, and were not ashamed to ask for discounts whenever, for whatever! This smart couple also got sponsorships for their travel, covering some parts of their trip. Both comfy and strict, GQ trippin maps out a year of travel on a flashpacker’s budget.
Seriously, text your bae right now and say, “OMG this could be us!”
Another rtw couple travelers are Gillian and Jason. They spent a total of $49,744.71, that’s around $24,000 per person as well. Here is there complete breakdown.
Mark and Britnee is another beautiful couple that broke down their year of travel by continents here. Their total? Same as the above, $24,000 per person.
→ Keep in mind:
Asia is CHEAP to travel in. You’ll find many world travelers spend a vast amount of time in Asia not only because it is beautiful and culturally brilliant, but it’s also cheap. Spend a whole year in Europe, however, and you won’t be so lucky on getting by with the above budget.
Research the country you’re visiting and understand the currency exchange. Different continents means different spendings.
Section 3: Putting it All Together
Averaging the budget I’ve accumulated from travelers listed here and on other sites, the answer is around $12,000 to travel for a year on a budget and $20,000 to do it with comfort.
With that in mind go back to section 1 with the personal finance lesson. If you’re trying to hit that $12,000 goal, here’s how much you’d need to save per month for a year of travel:
- If $300/month, save for 40 months (takes 3 years)
- If $500/month, save for 24 months (takes 2 years)
Let’s say you choose $300/month. Now 5-10% of your paychecks go into the savings category. This category for you now is travel savings. If your year salary is $50,000/yr, you’d make around $3,846.15 per 4-week period. You’d save $384/per month at the rate of 10% per paycheck.
Let’s say you want to do this faster. You’d down the percentage of your guilt-free spending and up your travel savings to 15% per paycheck. That’ll be $576/per month.
I’m not saying this will be easy but doing this allows you to NOT have to put strain on your investment or cause you to stop paying your fixed costs. Don’t be late on debt payment because you want to take a year to have fun. Don’t put a hold in your future richness either.
If your salary is higher or you run into extra income such as quarterly bonuses, you’re likely to hit your goal at a much faster rate.
If you want to take it a step even FURTHER – download my How to Become a Digtial Nomad E-Book to learn how to travel the world & MAKE AN INCOME at the same time. Then you can travel indefinitely. Your travel costs become your fixed costs. How damn cool is that!
That’s it for today’s lesson on money.
If this article helped you in any way, please help share it. Click here to tweet it. Preferably with people who’re just as much of a wanderlust as you!
You are onto something big and awesome. I cannot wait for you to start your adventures!
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How to Save For a Year of Travel – Additional Resources
- How I Saved $13,000 for Travel in Just Seven Months
- How We Saved Enough Money to Travel the World
- Travel Budget Calculator
- 75 Tips to save money when travelling in Europe
Have something you think will contribute to this list? E-mail me at email@example.com