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While the adventure you plan is going to be the main focus, it cannot happen without a budget. The finances of any trip, whether a complete lifestyle change or 6 month travel trip, are going to make-or-break your plans. If you don’t have a plan for your finances, or you have a very vague idea of your budget for your trip, you are setting yourself up for failure, regardless of how good your intentions are. It isn’t good enough to have a rough idea or to use someone else’s budget. If you do, your trip will only feel stressful and maybe even get shortened rather than fun and freeing.
To help you on your journey to planning and experiencing a great adventure, here are some top tips for figuring out your finances.
Ask yourself: how do you want to travel?
Before you open up a spreadsheet and start making a plan for your finances, it is important to ask yourself the question: how do you want to travel? This will help you to understand your intentions better and plan your budget for the kind of trip that you want. You need to first gain clarity for your preferred style of travel.
Consider whether you will find a place and stay put, or if you will be constantly on the move. Are you going to be happy in a hotel or shared space, or do you need a quiet and more private space to spend your time? Do you want peace, comfort, and relaxation, or do you want to have a challenge and new experiences? Do you want to remain flexible, or would you rather have a structure or itinerary to follow?
If you are changing your location every week, you will have a very different experience and budget from someone who is staying in an Airbnb for 3 months.
Decide how long you want to travel for
Do you want to travel for a fixed period of time, or keep your travels open-ended? The length of your travels is going to significantly impact your budget. Not just to pay for the accommodation for longer, but everything that comes with it too. Transportation, if you are moving around, activities to fulfil your experience, food, visas, insurance, and more. Budgeting also includes all the boring legal stuff you need when you travel.
It is going to be much easier to budget when you plan to travel for a defined period of time. This makes it a lot easier to calculate things like accommodation and transition costs, your emergency buffer, and a food budget for each day.
If you are opting for open-ended traveling, then you need more than just savings. You need a system in place that works for you and your lifestyle. Without income, your trip is still going to have an invisible expiry date. For this reason, many people choose to work abroad after a period of time, or find a job that enables them to earn a little money while traveling. It is a bit more of a compromise this way, but it enables you to lead the life you want and travel long-term.
Working vs. using savings
For long-term travel plans, many people face the difficult decision to save and spend that money for their travels or to work abroad. There is no one right answer, as everyone is in a different position financially and will have different goals and preferences.
Saving before you travel
Saving before you travel means cutting back, making a few sacrifices in the short-term, so you can save enough money to travel long-term without having to find work. This will give you complete freedom over your time; there will not be any deadlines you have to adhere to, and you can have a much more enjoyable and immersive travel experience. Using your savings can also make the visa situation much easier.
Unfortunately, using your savings to travel isn’t all good. It will mean that you are limited to your budget, and you may experience some stress and anxiety as you see your money decreasing over time. There is also this underlying pressure for some people to make the most of the time they have abroad and to make every minute count.
Working abroad
In modern society, it has never been easier to work abroad. While you still have to consider a visa and insurance, you can use this as an opportunity to turn long-term travel into a lifestyle, rather than a temporary experience. One of the most popular ways to travel is to become an au pair. This means you get accommodation, food, and pay in return for caring for a family. This will come with fixed hours and routines, but you get to live in and explore another country.
Digital nomads are another great working option for long-term travelers. There is a higher earning potential with this route for in-demand skills like advertising and web design, and you get full control over your schedule and location. As long as you have a reliable income and know how to grow a client base (or work for a company that encourages remote working), you are all set.
Track and adjust
Setting a budget is just the start. This is going to be extremely helpful in planning and experiencing your perfect trip. However, there are also some ongoing tasks that you need to consider. Your first budget may not be 100% correct, and that is okay. It may take some time to readjust and improve it. Spend a little time on a regular basis tracking your finances and learning your habits. See where you are under- or overspending, and whether you are spending money at a sustainable pace. This will help you to move forward with more knowledge and know whether to slow down or earn more money.
Long-term travel isn’t just about having money to spend. It starts with understanding your relationship with it and what you want to gain out of your travels. This can help you to create a good budget so you can enjoy yourself.
