Archive for the 'Money' Category

“Special” Price for You

Theresa October 7th, 2009

If you’ve traveled anywhere outside the developed world, you know that for you there is always a “special” tourist price, and by special I don’t mean discounted. If locals pay $5 for a taxi ride, you pay $10, though you’re probably quoted at least $15. Walk into a hotel and the rate you’re quoted is probably not the same rate quoted to the person in front of you or person behind you. You’re constantly being sized up. How much money do you look like you have? How much money do you look like you’ll pay? How big of a sucker do you appear to be?

Most things don’t come with a price tag in the developing world. You have to figure out what something is worth to you and then bargain with the person offering said item until you reach a point where you are happy with the price or you just have to walk away. It’s all a part of the game. Some people take it too far, fussing over the equivalent of pennies, while others hand over whatever is asked the first time around. Neither is good…for you, for other travelers, or for the local economy.

Most of the time I don’t mind it. But sometimes, like when a guy selling fake sunglasses asks $30 for them when even in the U.S. you wouldn’t pay more than $5, it bothers me. Do I really look like I found the tree from which money freely falls? I’ve accepted the fact I’ll pay more; I’m not willing to be extorted.

In Asia more than anywhere else we have been, “special” prices for tourists are the norm. And here tourist rates aren’t just for taxi rides, market purchases, hotel rooms, and the like; they’re also for admission to attractions. On one hand, I understand this. The citizens of developing nations usually don’t have loads of extra cash to spend on visits to museums, historical sites, and the like. You can also argue that through taxes and the like, locals are already paying for these places.

On the other hand, why can’t there just be a set value for things? In the U.S., if I want to visit the Grand Canyon, I have to pay the same as someone from Europe as someone from India as someone from Mexico. We have determined that the seeing the Grand Canyon is worth a certain amount, and if you want to visit it, it doesn’t matter who you are or where you come from, you have to pay the price. Some of my taxes are already going to support the national parks, but I’m not given reduced admission because of that. Perhaps using the U.S. as an example is not fair considering they’re not going to let you in to the country in the first place unless you can prove you have a good bit of money, but the idea remains…there is a firm and fixed value for things irregardless of circumstances.

Most of the time, I just roll with it, pay what I have to pay and move on. And sometimes it seems like it’s not a bad deal. For instance, to visit the forts and palaces in Rajasthan, India, we had to pay about 250-300 rupees ($5-6) each while locals paid around 10. It’s a big difference, but for their 10 rupees locals were given nothing but admission; those paying the foreign price received nice brochures as well as very well-done and interesting audio guides. Additionally, the notices that said the admission fees were going toward restoration work didn’t seem like BS, as the buildings were all in rather remarkable shape and were well tended to.

In Uttar Pradesh, it was a completely different story. At Fatehpur Sikri and Orchha, we again paid about 25 times the local price, but this time got nothing in return, not even a sketch map of the site. Additionally, the sites were not very well-maintained, so it felt as all the extra money we paid was just going right into the lining of someone’s pocket (which I have no doubt it was).

At the Taj Mahal, foreigners pay 750 rupees, 75 times the local price. But don’t worry you do get something extra here: a 500 ml bottle of water valued at 6 rupees and a pair of shoe covers so you can walk around the Taj without removing your shoes worth about 10 rupees. Definitely worth it, don’t you think? And while paying approximately $15 to visit a world famous site like the Taj Mahal isn’t in itself unreasonable, what makes the price so hard to swallow is knowNG that just five years ago, admission was 15 rupees, or $0.30. And no, the price didn’t rise with inflation or go up each year; it was actually increased from 15 to 750 in one fell swoop. I don’t know, but to me that feels like they’re not charging what they consider a fair price but are instead trying to see just how much us crazy foreigners will hand over before we call the bluff.

What do you think? Should foreigners have to pay more to visit sites than locals? Should the U.S. and Europe implement a similar policy? If it is fair to charge more to foreigners, how much more? I’m curious as to what you all think.

Africa Budgets Posted

Theresa June 21st, 2009

For all those who are curious about how much it costs to travel through Africa, we’ve posted country budgets for all of the countries we visited: South Africa, Namibia, Botswana, Victoria Falls, Mozambique, Malawi, Tanzania, Uganda, and Kenya. Just click on the tab at the top that says “Country Budgets,” and you can explore to your hearts content. For those who just like to know the big number, in our three months in Africa we spent $9,922.31.

How to Save Money When You Don’t Have Much to Begin With

Theresa July 24th, 2008

It seems like finances—personal, corporate, and government—are big news these days. I can’t click over to CNN without reading some story about the current financial crisis…or the custody battle of some celebrity. Obviously both topics that require careful consideration by the American public.

But I digress, the quality of news on CNN is a topic for another day.

Today I want to talk about finances, and in particular those articles that promise to tell you how to save money and usually offer some tantalizing tidbit about how some family saved $25,000 by just making a few changes to their lifestyle. I always click open these articles and begin reading, looking for a new way to save, only to find out that the family being profiled saved that money by cutting out their $10,000 a year coffee buying habit, only buying 15 couture dresses this year instead of 20, and using their Audi for routine errands instead of taking out their Ferrari when they just need a gallon of milk.

Very wise moves indeed.

But completely irrelevant advice to me.

If I had $10,000 to spend on coffee, then I probably wouldn’t have much need to worry about how to save $25,000. And if I owned a Ferrari would I seriously even blink when gas prices skyrocketed beyond the gas pump’s meager price telling abilities? I think not. But then again, I’m not rich, never have been, and almost certainly never will be, so I don’t have any firsthand experience with how difficult it must be to swim in cash (DuckTales, anyone?).

So since I find these how-to articles so irrelevant to my life, let me share here with you five fo my own tips for saving whatever cold, hard cash you can find under your couch cushions or rolling around the floor of your 1996 Nissan.

1. Spend all of your free time deep in the backcountry.
It’s practically impossible to spend money while you’re in a tent in a forest in the middle of nowhere. There aren’t any stores, and there’s no entertainment beyond the annoying people sleeping a few trees down singing loudly about pickles well past midnight. And those bears nosing around outside, they don’t want your dinero. They’d rather just have your hot dogs.

2. Develop your own special form of ADD.
See the preview for the movie. Get excited about the movie. Then remember that movies are long—two plus hours long. And during that whole, long time you’re expected to sit still and be quiet. Realize there is no way that’s going to happen and put your $10 back in your pocket (or better yet, the bank…but not all in one bank if you happen to have more than $100,000 because man, I hear those things are dropping like flies).

3. Convince yourself that coffee tastes like dirt. (Because it does.)
No one likes to consume dirt (unless you have pica, and then, really, you should get that checked out, because consuming dirt is totally not normal). If coffee tastes like dirt to you, you will not buy it. You will not spend any money (no less $10,000) on coffee consumption. When that well-meaning but budget-busting co-worker stops in your office and asks if you want anything from the coffee shop, you can say no and really, honestly mean it. Because heck if you want to consume dirt, there’s plenty of it to be had for free (see backcountry).

4. Become allergic to shopping.
Imagine, for one moment, a mall: the crowds, the racks and racks of clothes none of which contain the right size, those horrific fluorescent lights, that loud music, the perfume stench of department stores, the cookie place that looks like it should be so tasty but really isn’t. Did you not just break out in hives thinking about it? Me, I almost needed an epi-pen. You, not so much? Well then, fine, go ahead and spend your money to look trendy and cool; I’ll just be thankful that I’m still the same size I was ten years ago…and that every now and again fashion comes full circle.

5. Have no real idea how much money you make.
Remember when you were sixteen and worked at the zoo and made $5.75 an hour? Convince yourself that that’s still the case. Remember when you took the time to figure out just how many hours you would have to work to pay for whatever it was you wanted: a new paint job on your rusty old car, a Wendy’s value meal, tickets to the Tori Amos concert? Do that again, but calculate everything as if you still only make $5.75. Decide then how much it’s worth to you. When you turn 100, go ahead and check your bank account. Do a happy dance when you find out you’re a millionaire. Then spend it all like there’s no tomorrow (because, come on, let’s face reality, at 100, there’s a fairly high chance that’s true).

And finally, Africa

Jeff June 17th, 2008

This the third in our three part budget outline.  See Part 1 – South America and Part 2 – Southeast Asia.

We’re currently planning on spending approximately three months working our way down the east coast of Africa, from Ethiopia south to South Africa.  This leg of the trip has been the most difficult to nail down a budget for.  There’s a couple of reasons for this.  First, our sole experience in Africa has come from our amazing trip to Egypt in 2006.  We found Egypt to be fantastically easy to navigate and very cheap, characteristics that do not seem to fit the rest of the east coast as well.  The second is also entirely our fault, because it is the part of the trip furthest away.  Therefore we’ve done the least planning for it, so we really don’t have a great idea of our must see places and our must do activities (more specific than … go on safari, and … see Victoria Falls, etc).

Among things that are not our fault, Africa has a less developed tourism infrastructure that well known backpacking destinations like Southeast Asia do.  Overall, there seem to be two poles of tourism service, the “very low” and the “over the top”, but little of the happy medium for budget minded travelers like ourselves.  This makes it difficult to predict how much we will spend on average.  And finally, it seems there’s more variance between the countries we’ll be visiting than Southeast Asia or South America.  But I won’t back down!  We’ll give this a go.

Every Day Expenses

Food seems like it will be quite cheap on the whole, I think we’ll be quite comfortable assuming $10 a day.  Accomodation seems as though it will vary quite a bit depending on what is available in a given area.  I think $40 a day should be a comfortable number, we’ll be well under that enough that it will make up for the times we’ll pay substantially more.  Transportation will be somewhat the same way, since while buses are cheap, they may not exist in some places we want to go and private transport or airplane is not cheap.  I think we’ll be safe and budget $20 a day.  For our daily activities then this comes to $70 a day.

Activities

This is also a very uncertainly defined area at the moment, there are a number of things we want to do, but they can also vary wildly in cost.

Gorilla Trekking $1000

Safari $2000

Climb Kilamanjaro $1500

Any number of other adventure outings requiring guides $priceless

Put this all together and we expect the costs for Africa to be quite substantial.  90 days at $70 a day comes out to $6300 and you add it our additional activities and the total balloons to ~$12000.

Now, as evident throughout this post, this part of our trip is thusfar the most poorly planned and the most poorly researched.  So there are bound to be inaccuracies in this, and we would love to have you correct them.  Any experience in Africa?  What were your expenses?  How easily were you able to get around?

———-

So to summarize our entire budget and come to one big number, our entire budget comes to $32000 for two people.  This presumes our RTW flights are covered with frequent flier miles and is based off of daily projected costs in each area with costs for the additional activites we hope to do factored in as well.  This number does not include pre-trip costs such as insurance, immunizations, moving, storage, gear, etc.  We’ll address these issues and their costs as they come up.

Southeast Asian Budget

Jeff June 10th, 2008

We were in the midst of outlining our budget for our trip in three parts (see Part 1 – South America) when a weeklong vacation to South Carolina so rudely interrupted us.  So now that life is back on its busy schedule, its time for us to finish the last two legs.  Our second continental stop takes us to Southeast Asia, where we are planning on staying approximately three months. We’re breaking our trip down into two categories, every day expenses for our daily food, lodging and necessary transport and activities for all the crazy, unique things we will want to fill our time doing.

Every Day Expenses

The region is a backpacker haven for a region: it is cheap.  Most of what we’ve read pegs decent budget hotel rooms at under $10-15, cheaper in some of the less developed nations.  So as we’ve been trying to do, we’ll play it safe and budget $15 a day for hotel.  Eating will also not tax our wallets.  Street food can be found for less than $1, with restaurants slightly more.  I’m not sure I’ll ever be motivated to cook on my own when I can get some fantastic noodles for less than a buck, so we won’t budget too much home cooking in.  $10 a day should cover the occasional splurge.  Since the region is fairly small, we will traveling primarily by bus, which is quite inexpensive.  We will likely take a flight out to either Indonesia or the Philippines (help us decide), though even those seem relatively inexpensive at the moment due to heavy competition.  $5 a day should do us handsomely.  That brings us to $30 a day between the two of us.

Activities

Here’s the thing.  There are actually very few special activities we want to do in Southeast Asia, at least ones we will have to arrange in advance and hire guides and shell out expensive fees for.  Obviously we will go to Angkor Wat, but guides can be hired just for the day if desired and access to the park costs $20. To me, that seems to fit into the range of the general activities costs.  Most of the other sights we want to see fall into this category*.  So we will simply budget $10 a day for our activities and consider this done.  If Angkor Wat is only $20, this should be plenty to cover our adventures.

So again, adding all of these expenses together, we plan on spending $40 a day for 90 days, or $3600.  Now that I get here, I’m shocked at how little that is.  I’m not as confident we’ll hit this budget as I am about our South American budget.  But, I guess you can’t argue with math.  As I said earlier, its a backpacker haven for a reason.

*There is one big activity that would blow our budget, though we have not yet officially decided on it yet.  Theresa will have more on it soon.

Dinero, dinero, dinero

Jeff May 22nd, 2008

Well you guys did an awesome job on the Straw Poll (and please, continue to add in your estimates/experiences, we’ll keep a running tally).  Since I’ve been analyzing data nonstop for the past few weeks, I ran some statistics on what you’re responses, looking at our “collective wisdom.”  The theory goes that all of our collective knowledge should produce the most accurate results.  We’ll see how that works out.  Here’s what you all collectively said:

Total responses: 12

Median budget: $41000, $34250-50000 (25-75%)

Mean budget: $41171, $34835-47507 (95% confidence interval)

So there you go, a nice normal distribution tells us it will costs $41000 give or take $7000 for us (or two of you) to travel the world for a year.

————–

Now, that said, Theresa and I get our own say =).  We are going to detail for you in as much detail as possible what we expect to spend, but we are going to do it in three parts.  One for each continent.  This will provide us with nice benchmarks by which to keep tabs on how we are doing with our budget and all of you with a continent by continent breakdown (since that’s where the greatest variance in costs are).  We’ll update the finances to see how well we actually did at the end of each continent.  So hopefully this will work out.

I’m going to start today with South America.  We will be spending approximately 5 months in South America (with a brief stop in Nicaragua).  There are two kinds of costs that go into any trip like this one, the first being your mundane, every day existance costs, mainly food, lodging and transportation between places.  The second is all the entertainment and adventure we want to do … which is the real reason to do a trip like this.  So that’s obviously going to be a substantial chunk of change.  So that’s the gist of how I’m going to sum our planned expenses up.

Every Day Costs:

In our research, we’ve come to the conclusion that private two person rooms at budget hotels/hostels are going to cost us around $30-40 a night.  With the nose dive the dollar has been taking these days, we’re going to assume closer to the latter.  Now obviously, we have no direct experience with this, but that’s what we’re going to budget.  As far as food goes, nice restaurants tend to average ~$5 each for a meal.  We also plan on eating some street food and cooking on our own relatively regularly.  Using that as a vague basis on which to make estimates, we’ll budget $20 a day for food.  This hopefully will be a little on the high end, and will help a little with the “sticker shock” from how little our dollars will buy anymore =).  Travel by bus is relatively inexpensive, but by plane is relatively expensive, and neither will be an every day occurance.  Plus, we’ll try to keep our plane travel expenses controlled with frequent flier mile trips (there’s still a lot of work to do on that part of the trip).  We do plan on using buses or trains for much of our travel, which seem to be quite cheap.  I’d say budgeting $10 a day will cover us for the variety of transportation needs we are going to have.  This leaves us at a conservative $70 a day between the two of us.  You multiply that by the ~150 days we will be there and we’re looking to spend around $10000 on regular expenses.

Activities:

First of all, we’ll want to do plenty of things like go to museums, go into national parks, rent bikes, things of that nature.  I’d say if we budget $10 a day we should cover an activity or two a day for ourselves, and I’m sure we won’t want to do a whole activity or two a day after a very short while.  At least not activities beyond lay on the beach or walk around town.  A number of the specific activities we want to do in South America are going to be relatively expensive.  This is because they are pretty darn cool and lots of other people with plenty of money want to do them too.  This isn’t a be and and end all list, but here are most of the specific things we will want to do that we have to specifically hire guides/pay for services:

Galapagos Islands – $1500 per person

Trek to Roraima – $200 per person

Machu Picchu – $400-500 per person

Nicaraguan language school – not more than our food and lodging budget

Amazon Jungle Trip – not clear as our approach is not settled (be sure to vote for your favorite), but likely not more than $200 more than food and lodging.

So when you combine all of this up, we’re looking at around $10000 for both of us to get around, keep ourselves fed and have beds to sleep in.  This assumes any flights we take use frequent flier miles or do not gouge our expenses too greatly as they can get expensive in a hurry.  It will cost us another $5000-6000 to do all of the things we want to do in South America, leaving us at a total of around $16000.  So there you go, our budget for two people for five months in South America is $16000.  We’ll evaluate how we did after that leg of the trip.  Next up, Southeast Asia.

Straw Poll

Jeff May 15th, 2008

This is a quick one.

How much do you think it would cost to do a round the world trip for one year (if you stay out of Europe since thats a money sinkhole these days)?

Respond with a number in the comments and any further details you feel like adding.  We’ll follow this up with a post detailing our budget plans and how they align with how the rest of you think.

I’m happy to be a Swede

Jeff January 10th, 2008

When I was in college, we went to Sweden one summer, not unlike a number of other summers of my childhood, since my mother is from a small town in central Sweden. On this particular trip, however, my mom, dad, sister and I all stayed for three weeks in one hotel room in Uppsala, while my sister and I took a language course. With European hotel rooms being what they are and at that time in my life, let’s just say it was difficult to be confined in such a way. To boot, we were right on an intersection that, while not seeing much traffic, is friendly to blind people. Meaning it beeps. Loudly. Alternating between quickly when the pedestrians have a walk signal, and more slowly when they do not. So all through the night, my brain would rattle with a bee-bee-bee-bee-beep … beep … beep … beep … bee-bee-bee-bee-beep. I longed for mere Chinese water torture.

The carrot for enduring this temporary loss of sanity, along with a few more bureaucratic hoops, was permanent Swedish citizenship, which these days translates to EU citizenship. This has already been very useful, affording me flexibility in work trips to Sweden while my classmates fiddle with visas. (And since Theresa is married to me, she can easily get a work visa should we ever desire to move to Europe. Nice option to have, and one that many others would kill for.)

Don’t get me wrong, I enjoy being Swedish for the culture as well. I see a lot of how I am in the way the society works, both in good and bad ways. I feel I understand and fit in with both the timidity I disdain and the thoughtfulness I appreciate. Swedes have a very egalitarian perspective on society (as their government reflects … or is it the other way around?). And Stockholm manages to be the cultural center of Sweden while still feeling small and walkable.Sweden vs US Visa Info

But now there’s another new reason now to be pleased about being Swedish. When we looked up the visa requirements for all of the countries we were interested in visiting, we saw that many countries charge EU nationals substantially less than U.S. nationals for visas. I mean, check out the chart (click here to see a full-size version). At least Vietnam, Zambia, Brazil, Chile, and Bolivia all charge way more for U.S. visitors than Swedish visitors. I figure in total, my visa fees will be less than half of Theresa’s. So that’s useful.

I guess what I’m getting at is, thanks mom for pushing me to get my permanent citizenship. It’s an invaluable trait to have in an increasingly connected world. While my Swedish nature leads me to desire citizenship even without any benefits, saving a few bucks on my visas sure doesn’t hurt.

Mo’ money mo’ problems

Jeff December 21st, 2007

Originally I was planning on expanding on what Theresa said in her latest post, just below this one. If you haven’t read it yet, check it out, it’ll make you realize how affordable a RTW trip can be with some planning. But reading through it, I realized she already pretty much covered what I planned on saying. To sum it up in one sentence, it’s very financially doable.

So I thought I would give you a little insight into what we plan on doing financially while we are traveling. I know that this isn’t the sexiest of subjects, but it’s a pretty necessary component to traveling. It is a very different financial world abroad than it is here in the US. Both of us, like most people our age, are creatures of the modern financial world. Our preference for using credit cards is met by almost ubiquitous acceptance of them everywhere from parking garages to the corner deli (we, of course, pay them off every month, and we get some great rewards from it). We rarely carry cash. Our salaries are directly deposited. We dabble in the stock market. A lot of these things are going to change when we go on this trip (starting with the no more salaries part).

There are a few main goals we have financially while we are traveling:

1. Maintain a reasonably sized pool of cash that will be on our person.

Our travels will be mostly in the developing world, where cash is most definitely still king. Credit cards and other forms of electronic payment are by and large not accepted, at least outside of major cities, where even there they are mostly confined to pricier hotels and restaurants. For daily usage, we will need to be carrying cash.

2. Keep enough funds for our entire trip in savings with easy access.

One thing that has become pretty easy to find (again, in most major cities) are ATMs. That is how we plan to maintain the aforementioned cash pool. We also want to avoid ATM fees and while earning as much interest as possible, and fortunately, a number of checking and savings accounts have started to offer this features. We probably will open a Fidelity high yield checking account that seems to meet all of these requirements (I’m sure other companies have similar offers, but we have been happy with our previous experiences with Fidelity).

3. Minimize the number of credit cards we carry and minimize foreign transaction fees we pay

As I said, there are not many places to use credit cards in the developing world. They have their moments of extreme usefulness, however, so we will carry a few cards (a primary one and two backups) with us and use them when we can. We do have too many credit cards; this stems from me applying for cards for a myriad of great benefits — this has also contributed to our frequent flyer mile collection. So we will cancel or consolidate many of these that we will not use. Some cards are better than others when it comes to travel because there are extra fees added on for foreign transactions. There is a standard 1% fee that Visa or Mastercard adds, and the issuer of the card (ie Chase or CitiBank) usually adds an additional 2% charge. Even with these fees added, credit cards still offer the best exchange rate … banks and currency exchanges will charge heftier fees. Some card do even better though. We will be using almost exclusively a Capital One, that not only has no fees of their own, but they refund the 1% Visa fee, and our card pays 1.25% back, for a total savings of 4.25% on everything we charge compared to an average card. Another useful card to carry is an American Express card, because although they are rarely accepted outside the US, they have travel offices in many larger cities accessible only to members that can be very helpful. You can find the foreign transaction fee policies for most credit card companies here.

4. Simplify our investments and long-term cash.

Like I mentioned, we dabble in the stock market. This is not something we are going to want to think about at all during our travels, and a lot can charge in a year. Just think back to how hot real estate was at the beginning of the year compared to now. So we want to change our investments into something simple and safe. We’ll be selling most of our individual stocks and putting some money into some safer mutual funds and CD’s, but I won’t bore you with any more specifics here.

I think we’ve all had our share of finance for today. But with this simple set of changes, we will have easy access to cash, the best value from our credit, and won’t have to worry about our money for the trip or for afterward. So we’ve got that going for us, which is nice.

Money, Money, Money, Mo-ney

Theresa December 15th, 2007

Money. We all want it. We never have enough of it. It’s the root of all evil. It’s the means to making great things happen. It’s essential to this trip we’re soon to take. And it’s something everyone wants to know about, though not everyone is ballsy enough to ask about. So we’re just going to go ahead and address it straight on, Miss Manners and etiquette rules about not talking about money be damned.

I think a Q & A format works best for this, so that’s the approach I’m taking.

Q: How much does a one-year trip around the world cost?

A: Well, we haven’t taken said trip yet, so I can’t give you a final number, but I can give you an estimate. The estimate has many sources: guidebooks with their suggested daily budgets, the costs given by other travelers who have taken such trips, and our own personal experience traveling and living abroad.

First off, there is no standard amount for what a trip like this will cost. One major deciding factor is where you plan to travel. Traveling around Europe, Australia, New Zealand, Japan, and other highly-developed first-world countries is going to cost you a lot more than traveling around the developing world. For example, in Egypt, we ate steak kebabs for $1 and stayed in a nice hotel with pool and other amenities for $7. In Paris, the same would have cost us between $10 and $20 for the food and over $150 for the hotel. In Egypt, over the course of an entire week, we spent under $200 per person, and that included all food, train, taxi, and bus trips, admission to museums/the Pyramids/Temples, etc., hotels, a felucca ride on the Nile, a snorkeling trip in the Red Sea, souvenirs, etc. In Paris, $200 could easily disappear in a day.

On our RTW trip, we will be traveling almost exclusively in the developing world, which means that our money will stretch rather generously. (Also, as most of you are probably aware, the dollar is plummeting in value thanks to the current economic situation in the U.S. This does not have nearly as much of an effect in the developing world, however, for multiple reasons: the first being that many Third World currencies are tied to U.S. dollars, the second being that costs are so low to begin with in these countries that increases in costs are relatively small for American travelers.)

A second factor that determines how much a one-year RTW trip costs is your style of travel. If you want Western-style accommodations and food and opt for planes over trains and buses, your costs will be high. If, however, you seek out local lodges, eat where the population eats, and don’t mind long-distance overland travel, your costs can be quite low.

We actually prefer (gasp) the second option. We believe this is how you best understand a place. We don’t travel to recreate our own lives in another place, but to experience others’ lives as they live them everyday. That’s not to say that every once in a while, we won’t splurge. But let me be clear that for us splurging won’t mean a night at the Hilton, it will mean spending an extra $5 to get air conditioning when it’s 100+ degrees outside (and inside). Truly, everything is relative.

So, to answer the question, Jeff and I estimate that we will spend under $30,000 on our one-year trip around the world. This is just over $82 per day for the two of us. This is less than we spend in a year at home.

Q: How are you able to afford this?

A: To clear up any speculation: No, we are not trust-fund kids. No, we have not won the lottery. No, we do not have ridiculously high-paying jobs.

So how can we do it? Simple. We made it a priority. Some people want nice cars. Some people want large houses. Some people want to eat dinner out every night. We want to go on a trip around the world. So that’s what we plan for, save for, and invest in.

Jeff is currently in graduate school, although we are fortunate that his program provides him a real honest-to-God salary. I work for the government, making under $50k (well under, if you must know). We live in the Washington, D.C. area, which has a high cost of living. We manage, however, to save my entire salary every year. This is how we can afford this trip, and at the same time, be in a position to come home with enough money to pick up our lives without major changes.

So, how do we save so much? To begin with, we’re both naturally very conscientious about money. We’re savers, which means we’re going along with our natural impulses, not fighting them. This starts us off on a good foot. Secondly, we’re not into luxury. We don’t care much about cars, high-end clothes, fancy dinners out, or luxe hotels. Thirdly, we’re not especially social; we’re not the type who need to be out on the town every night. Jeff might go out for a beer after work every now and then, but we’re not regulars at any watering hole. Given the choice, we’d rather have friends over for dinner and game night than go out for dinner and a movie. We seek out free festivals. I snag free tickets to movie premieres and theater performances. We love to hike, bike, and go to the parks.

We also budget, which I think is key to saving money. We all know how easy it is to blow the $20 in your wallet and not have any idea of what you spent it on, so we keep track of all of our income and where it goes. We plan out menus for the week and then shop carefully and cook regularly. We take our lunches to work. We don’t buy a coffee every day.

For some people, this might sound like no fun at all. For us, it’s no big deal. Even if we weren’t going on this trip, we’d still be like this. It’s the way we are. And it doesn’t mean that we don’t enjoy a nice dinner out every once in a while or go to the cinema to see a movie. We just make conscious decisions to do it. We don’t go because we’re bored or lazy, but because that is what we really want to do. And we’re not cheap either. We don’t nickel and dime when we go to dinner with friends. We buy nice gifts for our friends and family for weddings, birthdays, graduations, and other special occasions. We give to charity. And we probably spend more than the average person on travel. Obviously, we love to travel, and we’re not afraid to spend our money to do that. But even then, we’re generally budget travelers. Our biggest splurge since we’ve been married would probably be our Grand Canyon trip, but even then we made sure we got the absolute best deal possible. We just don’t spend willy-nilly. Never have. Never will.

I think Jeff will follow up in a future post with some concrete saving and investing tips. He’s our money guru and has much more informed things to say about this. Let me just finish by saying that if you want to do a trip like this, you can. You just have to make it a priority and save for it just as you’d save for anything else. Goals, people, goals.

Q: What do you think will be the most expensive parts of this trip?

A: The first and most obvious answer is airfare. Flying isn’t cheap. That’s why we’re going to try to do much of our travel overland, saving flights for long trips between continents. The benefit of having a whole year for the trip is that you can take full days to travel. You don’t have to be everywhere now. As Jeff mentioned before, we’re also hoping to be able to use our miles to offset some of this cost.

Another expense is insurance. We will need to purchase health and travel insurance for the entire year we’re gone. We’re currently comparing options and will post more about this later.

Specialty activities will be a third expense. Going on safari, trekking to see gorillas, climbing Kilimanjaro, and other similar activities have high costs. The trick is determining how much certain activities are worth to us. This is how we’ll determine which of these specialty activities we choose to do and which we pass on—a good ol’ cost-value analysis.

Q: Will you be writing further posts about money and expenses?

A: Yes. I plan to be rather forthright about this. I love reading travel blogs by others who have done similar trips, but so often I find myself saying, “Well that sounds cool, but how much did it cost? Is this something I can afford?” Money might be taboo to many people, but not to me. Things have a cost. Why not let people know what it is? It’s like those damn menus that don’t print the costs of drinks. Nobody likes to wait until they get the bill to find out that their margarita cost $15. So I’ll just go ahead and tell you. Then, if you’re reading our blog because you’re planning a trip of your own, you’ll have the facts you need to make informed decisions. Otherwise, um, well you can gossip about it or something.