Budgeting for Your Round-the-World Trip: Coming Home

On December 15, 2009, just a little over two months after landing back in the United States after our year-long trip, Jeff and I closed on a house, putting a solid 20% down. No, we aren’t rich. We didn’t discover that we were the long lost relative of a member of the royal family. We didn’t win the lottery, embezzle funds, or steal and pawn a gold Buddha. No, the money we used to purchase our house didn’t come to us in any exciting way. Instead it came to us the old-fashioned way: by working and then saving.

When the idea of a RTW trip first weasels its way into your head, all you can do is dream. You dream of what it will be like to stand at the Sun Gate and look down on Machu Picchu after three hard days of hiking. You dream of the way your heart will race the first time you see a lion in the wild. You dream of the taste of the pad thai that you will learn to cook yourself in a class in Chiang Mai. You plan routes in your head. You read blogs and travel guides and you watch travel shows to fuel your dreams of all the places you can go and the adventures you can have.

Then when the idea has entrenched itself so much that it’s no longer a dream but a plan, you begin to look into the costs. How much is a RTW ticket? What about individual legs? How much does it cost to sleep and eat in South America? Africa? Asia? Australia? What’s the price tag for a gorilla trek in Uganda or learning to scuba dive in Malaysia? You determine what kind of traveler you are. You decide what you can live without and what you must have. You calculate, add and subtract, guesstimate here and there, until you have a number. Your budget. The amount it will cost you to take a round-the-world trip.

Maybe it’s $50 a day. Maybe it’s $100 a day. Doesn’t matter. Everyone travels differently. What does matter is that what you have here is only a partial budget. What you have here is the cost to travel. What you’ve forgotten is the cost of coming home.

Of all the destinations on your trip, home is going to be the most expensive for the majority of round-the-world travelers. Sure, maybe Mom will let you crash in your old room and will have missed you so much that she’ll fix you food and let you borrow her car, but after the absolute freedom of long-term travel being dependent on someone else is not going to be very fun. So what you’re going to want to do is budget for both your trip and your return home.

Here’s how in five easy steps.

1. Take a realistic look at how much it costs to live at home for one month.
How much is an apartment going to cost? Don’t forget the deposit and utilities. How much do you need for groceries? What are your transportation costs? Assume that you’ll live pretty frugally upon your return, but don’t be too ascetic in your budgeting. Chances are you’re going to want to catch up with friends over a beer or hit your favorite restaurant when you get home.

2. Assume you’re going to be without income for at least one month upon your return. Then plan for three.
While some people are able to line up work in advance of their return, most travelers return from their travels to find themselves unemployed. Getting hired, especially these days, isn’t the easiest thing, and even in the best economy, the time from application to interview to hiring is usually a few weeks at minimum. And honestly, you’re going to want to give yourself some time to readjust to home before you slip back behind a desk. Three months worth of savings gives you time to re-enter, look for a job, and hopefully get hired, if not at your dream job, at least at the local coffee shop.

3. Take the three month figure and then pad it.
Did you consider the fact that if you’re unemployed, you’re also without health insurance (at least in the U.S.)? You’re going to need money for a temporary policy. Did you sell all your stuff before your trip and have to go shopping for something to wear to your interview? Regular life is often filled with unexpected costs. Be prepared.

4. Set up a separate account as your re-entry fund.
Every time you feed your round-the-world account, feed a portion of it to your re-entry fund. It’s just as important as the actual travel fund, so don’t neglect it with the idea that you’ll feed it at the end. Even better, feed it first, and then start in on the travel fund. You’re going to want to make sure this is a secure account (not stocks that might crash before you get home), and it’s a good idea to make it an account that is really hard to access from the road so you don’t “accidentally” spend it when some “opportunity-of-a-lifetime” presents itself to you when you’re drunk at 3 a.m. in Nicaragua.

5. Depart on your trip, knowing that you’ve done what you can to make re-entry easier.
With a nest egg set aside for re-entry, get going. Have fun. Take part in all those adventures you dreamed about when the idea of a round-the-world trip first crossed your mind. When you do come home, re-entry will be challenging (and that’s okay), but you’ll have made it a bit easier on yourself by taking care of the coming home part before you ever left.

If you’ve taken a long trip, how did you manage when you returned home? If you’re planning a trip right now, do you have a coming home fund? Share your tips for planning and saving for re-entry costs.

10 thoughts on “Budgeting for Your Round-the-World Trip: Coming Home”

  1. So true! We had a nest egg amount set aside for our return home – and we were able to keep our jobs! It was important to us to not have to worry about money when we returned. We knew we would be all topsy turvey from being away a year and just wanted to be able to not think about it. Through careful planning and saving we are now in the best financial position of our lives…AND we got to travel around the world for a year!! No more debt for us…just a small pile of savings that keeps growing until the next GiantStep!! Cheers!

  2. The coming home fund – a very important part of the budget I bet a lot of people forget about. I like your suggestions to be organized about how you save. I am a horrible saver and budgeter but we did try to take some steps to make sure we don’t have to live with our parents forever. For example, we met with a financial planner so we could invest some savings that we didn’t want to use for the trip in a brokerage account with low-risk investments for a year. We just learned the account made a decent chunk of money, which is always nice to hear when your checking and savings accounts are otherwise dwindling fast.

    Congrats on the house purchase!

  3. Wise words! I came home from my first post-graduation trip to Africa with $200 in my bank account. It was 2008 when the market really took a dive. And it took me 3 months to find a job. It was such a struggle but more stressful than anything else! I had an Absolutelydonottouch fund for when I came home from my rtw trip (it was literally labeled that at the bank) and though I did decide to dip into it a bit, I could breathe a sigh of relief when I came home and needed to pay bills until I found a job.

  4. I totally agree that 3 months is what you should give yourself to reintegrate into society! There’s so many things going on when you get back and it all takes a ton of time. Great advice!

  5. Great post! The re-entry fund was huge for us. We set aside enough to finance a down payment, basically taking the funds from the sale of our old home, as well as an extra cushion.

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