Tell somebody that you’re taking off for 10+ months on a trip around the world, and they instantly wonder if you’re RICH or have received some kind of inheritance. The truth for us is: nope, neither, not at all.
Yes, we saved up a bit for our travels this next year, but mostly we both have just been very financially responsible in our everyday lives, have worked hard to get where we both are, and also have spent a GREAT amount of time and strategy to earn a large amount of airmiles and credit card points to allow us FREE flights and hotel rooms during our stay. Not for the whole trip, but some portions of it.
For those of you who don’t know: We strategized to accumulate 360,000 airmiles together within only 6 MONTHS, which got us FREE around-the-world airline tickets! We had to pay around $400 each for the taxes on the flights, but these tickets fly us from Milwaukee, then to 6 different stops around the world (continually going in a westbound direction), and return us to Milwaukee at the end. Once we make it back to the US, we will have made one full loop around the globe. If we had paid for these tickets out-of-pocket, it would have cost us around $4,000 to $7,000 each! So without even stepping foot on a plane yet, we have already saved around $8,000 to $14,000 together.
In addition, we have targeted specific credit cards that accumulate a large amount of bonus points and benefits that we can cash in for hotels and shorter flights along the way. We made sure that the cards we take on our trip have ZERO foreign transaction fees (in case you didn’t know, most credit cards will charge you 3%+ on any charges you make in a foreign country, which is EXPENSIVE and can add up fast!), and one of our cards gets us lucrative benefits such as baggage delay coverage, and reimbursement on any personal items if stolen from your hotel. We also opened a savings account with a credit union to receive the same benefits of ZERO foreign transaction fees on ATM withdrawals (again, normal banks will usually charge you 3% or more on withdrawals, which is REALLY expensive…. Think about withdrawing $500… will cost you $15 extra in fees!)
Another reason we can afford to travel for such a long time is because quite a few of the countries we are traveling to have such a low cost of living that you can easily get by on $20-40 per day (per person) for hotel, food, expenses, etc. For example, in India, you can find a perfectly acceptable mid-range hotel for $10-15 per night. In China, you can stay in a hostel for $5-10/person per night. And in Indonesia, $5 gets two people a three-course meal with wine. However, if we were to spend a great amount of time in Western Europe, Japan, or Australia, we would eat up our entire budget within a month or two!
Since we are traveling slowly and there isn’t a pricey trans-Atlantic flight to factor into the total cost, we can take trains, buses, and local flights to get us shorter distances around countries. We can also look into apartment rentals for longer stays or week-long volunteer opportunities to get us cheaper or free accommodations.
Budgeting for travel also REALLY depends on how you handle your personal finances. Personally, I am known among my friends as “the coupon girl” who ALWAYS gets a discount whether it’s groceries, prescriptions, restaurants, clothing, or toiletries. I cut and dye my own hair, groom my dog’s hair, pack sandwiches for road trips and visits to amusement parks, and strategize to get most of my shampoo & conditioner, lotions, medicines and more for FREE or cheap. I usually have a Groupon or coupon for restaurants, always pack my own lunch on workdays, and keep a pretty low budget on everyday living items in general. I have a REALLY hard time buying anything that’s NOT on sale, or that I haven’t shopped around for to make sure I got the lowest price or best deal.
And, of course, James nor I have kids or a mortgage to pay, so that also has allowed us to save more money over the past 5-10 years.
Finally, we are planning to keep the costs down on our accommodations, overall. We plan to stay mostly at hostels (which are not as fancy as hotels and means that sometimes we’ll have to share a room or bathroom with other people) and will also stay with some friends and family along the way. We also hope to arrange some “home stays” with host families and volunteer for some organizations, which will not only get us “free” accommodations, but also allow us to get a rewarding and personal look into the cultures of these countries that most people normally wouldn’t get to see or experience.
With all of these points in mind, James and I believe we can maintain a budget of $50 per day per person, which comes out to a total of only $10,000 to $15,000 each to travel around the world for 10 months! And we are ecstatic that our planning, preparation, and research will allow us the rare opportunity to completely take off for the year and discover the whole wide world together while we’re still “young”!
Meanwhile, we’re constantly looking for ways to cut corners and save money on our trip and strategize with our current credit cards to get the maximum points and miles as possible! We would love any advice or pointers you may have so feel free to comment with your own experience on how to save while traveling.
More about credit cards, points, and airline miles to come in future posts ahead . . .