Perhaps you are expecting me to reveal a secret formula or quick way to make money that gives you the means to travel round the world for a year. I’m sorry, we do not have one.
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It’s similar to asking a trainer or nutritionist what’s the best way to loose weight and their response is always, “eat healthy and exercise,” uh, what a bummer. Who wants to do that! We never want to do the work we just want to bask in the results.
Budget Travel Secrets
Now, I’m definitely not an expert on financial planning or round the world trip planning for that matter. But, I am going to share with you the personal details of how Jason and I were able to pay for the $15,000 USD each for our year of travel in Latin America. Unfortunately, my answer for how we saved money is probably worse than eating healthy and exercising. It’s financial responsibility. Gasp!
Aracely’s Financial History
I am from a single parent home and have worked since the age of 14. My mother has never had the means to save much money and always lived from paycheck to paycheck. That meant I had to work for what I wanted. I rushed through college because I knew I had to hurry up and help my mother and younger brother financially. I paid for it all with financial aid, scholarships, grants and working up to three jobs at one time. Oh, and I never had any credit card debt, ever.
After college I was hired by Mercedes-Benz where I worked for a little less than 5 years. With my salary, I paid for my own apartment, car, bills and helped my mother. This meant I too lived paycheck to paycheck during that time. Then in 2007, at the age of 25, I landed a job with a Fortune 500 Company. The move gave me a much needed 50% salary increase. When this happened, I did not purchase a new car or get a bigger apartment as most Americans have the habit of doing. In fact, I reduced my spending by getting rid of my leased vehicle, since I could now take The Path (NJ-NY public train system) to work everyday. This enabled me to save a lot of money over 1.5 years.
When we decided to travel for an entire year we began to run the numbers and calculated that we needed $15,000 USD each. This does not include any of our gear expense. In my case, I also had to make sure there was enough money to continue to help my mother during the time we were traveling. That was an additional $6,000 dollars for the year. Upon our return, I wanted to make sure that I had enough savings left to feel financially safe for emergencies.
Once I knew all of the above was feasible, from only 1.5 years of savings, I gave my boss my resignation notice.
Jason’s Financial History
This is probably the only time I will consider my age an advantage. I had never planned on long term travel before, therefor I have never saved money for it. But, I have been working since 1997 and was able to begin saving money after I paid off my debt in 2003. My debt was the result of owning a high maintenance car and some small graduate school loans. From 2003 to 2009 I had saved enough money for a down payment on a home, my highest priority at the time. I own a vehicle that is paid off and have no existing debt. It was the perfect time to move forward on a home considering the housing market had tanked.
Unexpectedly to both us, we suddenly made a decision to travel long term. The good thing was, I had the money. The bad thing was, I would be spending the down payment of a house. We look back now with no regrets. I don’t see us buying a house anytime soon, it would hinder our traveling significantly and eliminate many freedoms we have today.
I didn’t necessarily save or budget for this trip, I saved for the sake of saving. I saved for a house, financial freedom, an active social life and fun vacations. Saving includes eliminating credit card debt. If you are saving money, but at the same time increasing your credit card debt or taking out loans for cars, you aren’t saving. It’s a concept that the United States struggles with, including our government. Debt takes away your freedoms.
I quite my job and am now traveling and running a travel blog on my many years of savings.
Travel Budget Review
We rationed our travel budget at $1,333 USD each per month for a total of $2,666, of which $1,000 was allocated towards adventure and the rest for day-to-day living expenses. The actual expenses varied from month to month and country to country. After 11 months of budget travel we had already exceeded the $30,000 mark by $1,500 dollars. At this point we had not purchased our tickets home and had one more month of backpacking expenses left. We both agree that we could have stayed within our original budget if we didn’t have friends visiting from home. That’s not to say we didn’t want our friends visiting.
When friends visit us, it’s a vacation for them. They have 2 weeks to see and do as much as possible. That usually means flying places and eating at fancy restaurants. If we eliminate the flights and fancy restaurants we ate at during our friends’ visits we would have made our budget. During our last month in Quito, Ecuador, we ate in all the time, saving money. It wasn’t enough to break even, but it helped.
Travel Budget Advice
There you have it. I’m sorry again for not being able to provide a secret formula. The only secret is financial responsibility. Even though we already had the money saved before we decided to do long term travel, I think the same behaviors apply regardless of what you are saving for. You must have discipline and patience. These characteristics are important for more than just saving money.