Money, Money, Money, Mo-ney

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.