Once we started spilling the beans about our adventure plans to our friends and family the most common questions we got revolved around money. “How much does a trip like that cost? How are you gonna pay for it? What about your jobs?”
Now, if we were saving for a down payment on a house or something more acceptable in polite society no one would think twice about it, but that’s not the point. It is understandable to be curious how we are saving to travel, so in the interest of transparency we’re going to lay it out for everyone to see. We will continually update the blog with spending data as we travel as well. Maybe by showing what we are able to achieve by making a plan and sticking to it we can inspire a few of you to pursue your own hair-brained ideas.
There are many people traveling by car, van, truck, or RV through Central and South America from all over the world. Where we differ from most is that we are not retired, independently wealthy, nor do we work tech jobs that allow us to earn a living from anywhere with an internet connection. We are self funding, and we are doing it through good old fashioned saving and frugality!
This path may seem out of reach for many, but it is not as far-fetched as you may think. We both earn average or below average incomes for Seattle, and one of us finished college with $40,000 of debt that needed to be dealt with before we could even think about long term travel.
Budgeting For The Trip
The first step for saving to travel was to come up with an expected budget for the trip. Anyone who has traveled a bit knows how difficult that can be. Expenses vary drastically from person to person based on the type of trip, personal tastes, haggling ability, etc. We traveled through Southeast Asia for over two months on $2,000 each, but many people spend more than that in two weeks in Thailand.
For us what’s important is to travel far, travel long, and really connect with the people and the culture of the areas we visit. That means slowing down, shopping in local markets to cook local foods, avoiding tourist traps, and spending time in nature. That’s what is fulfilling to us, and conveniently that’s what is most affordable.
After scouring numerous blogs from other people who have made the long drive south, one number kept popping up: $80 per day. That is typically the total cost for a couple to make this trip in relative comfort averaged out over a year. That’s $29,200 total, or less than $15,000 each. Most of the costs associated with the trip are fixed costs such as insurance, vehicle shipping, fuel and border fees, which means extending the trip to, say, 18 months actually doesn’t increase the total cost all that much because we would only be adding to our daily costs (mostly food and occasional lodging). That’s why long-term travel is where it’s at!
But not wanting to blindly take an internet stranger’s word for it we decided to throw together our own basic estimate to see how it compares.
- Fixed Costs ($16,000)
- Fuel – $6,000 (Assuming 30,000 miles at 15 miles/gallon and $3/gallon)
- Traveler’s Insurance – $2,000
- Darien Gap Shipping – $2,000
- Border fees – $1,000
- (Hopefully) shipping the van home – $2,000
- Vehicle Repairs/Maintenance – $3,000
- Daily Costs ($40/day or $14,600/year)
- Food – $20
- Lodging – $10
- Misc – $10
Adding all of that up gives us a grand total of $30,600 or an average of about $84/day – pretty close to that $80/day rule of thumb! I realize there are plenty of expenses that aren’t accounted for but that’s why I generally rounded up (sometimes drastically) for my estimate. We don’t expect to spend $10/day on lodging because we will be camped out in the van as much as possible. Nor do we expect to spend $20/day on food because that’s more than we spend at home. And I really hope we don’t need $3,000 worth of engine work!
But it isn’t quite that simple, because we don’t want to come home penniless. Ideally we will finish the trip with a bit left in our savings to travel the US for a bit and ultimately resettle somewhere to find work. Everyone has a different comfort level when it comes to their finances, but for ourselves we set an arbitrary savings goal of $50,000. We have no idea what the future holds and we believe that will allow us to travel at our own pace, stress free, and return home without being a burden to those around us.
The Savings Plan
Prior to hatching this plan we had a crash course in saving when we set a 2-year goal of paying off James’ student loans. So it was an easy transition when the time came to start our travel fund.
The secret to success for us has been to automate everything so we don’t have to think about it. We set up automatic payments on all of our bills, and arranged our direct deposits so that only what we need goes into our checking, while the rest goes straight into savings. This system keeps our finances predictable and forces us to stick to a budget.
That being said, none of it would be possible if we didn’t live on a lean budget to begin with. We sacrifice frequent nights out, concert/festival tickets, and unnecessary purchases to make this possible. We cook our own meals as much as possible, but when we can’t cook we stick to inexpensive restaurants. Fortunately our part of the city is loaded with cheap and delicious asian food!
But we certainly don’t live like peasants; we still like to enjoy the finer things in life, but we are strategic about where our money goes. All those small decisions add up to us putting over $2000 per month into our travel fund, resulting in a saving time of about two years. How many $10 decisions do you make each month?
None of this is easy and the limits of our patience with each other are regularly tested. But I mean it when I say that for the vast majority of you,
your dream trip is within reach!
Try tracking your spending for a month or two to see where your money REALLY goes. Here are a few resources for budgeting, saving for travel, and reducing your spending:
Mr. Money Mustache (A retired-at-30 blogger that loves to rant about American consumerism and excess)
Mint (A handy app to keep track of your finances and set a budget)
/r/personalfinance and /r/frugal (Reddit communities about saving money and managing your finances)