How much travel money you’ll need is a difficult question to answer because everyone travels differently, but you can put the question into perspective by asking yourself nine important questions
1. How long will you be traveling?
It’s all too easy to burn through half your nest egg during the first portion of the trip thinking you still have plenty of money at your disposal for the rest of your trip. Designing a daily budget based on the number of days, weeks or months you’ll be traveling and keeping and adjusting it as you go is essential to keeping your savings intact.
2. What destinations are you visiting?
Some places are far more expensive than others. Europe and Japan are both far more expensive (per day) than say Cambodia, Central America or India. If you’re on a budget and want to spend as much time traveling as possible, developing nations will stretch your dollar farther. If money’s not an issue then go ahead, spend more time in Western Europe, Australia and New Zealand. For the rest of us, here are some hints on where your dollar will go the farthest.
3. How long are you stopping in each destination?
Transfers to and from airports can add up, not to mention trying to find budget-friendly accommodations in each new unfamiliar city. Found something good? Stick around. Also being unfamiliar with the local currency will probably have you spending a lot more of it. Take longer stops (and less of them) to keep these wastes to a minimum.
4. How do you want to sleep?
4-star hotels and restaurants will drain your funds in no time. If you’re not willing to sleep in shared dorms all the time, perhaps think of a sprinkling a private room in a hostel or guest house into the mix. Remember, where you sleep is a minor part of your trip. Offset that ocean view with a, shall we say, more spartan option.
5. What will you eat?
Eating out all the time will cost you a fortune. Street food is some of the most finely prepared and authentic food anywhere. Don’t overlook it – pepper street meals into your daily routine. Supermarkets are everywhere and make for a fun cultural experience and cheap eats. Picnics are fun, tasty and get the job done for far less than a restaurant.
6. Will you spend more time in big cities, suburbs or the countryside?
Downtown accommodations in big cities are more expensive than less-convenient spots. But if you plan on spending time most of your in the city center you may spend what you’d save on cheaper accommodations in the suburbs on transportation getting there and back. In small rural villages you may be able to swing two weeks for the price of two nights in the city.
7. Do you plan to do much adventure travel (i.e. safari, scuba diving, trekking or skiing)?
These activities cost serious money. If adventure tours and excitement are a big part of your RTW trip, save extra and do your research so you have time to determine whether booking in advance or locally is the better option.
8. How much overland travel are you doing and by what means?
In cities public transportation usually saves you money. Grab a bus, train or subway and skip the cab or car rental. Not only can it be an experience, it will allow you to see parts of the city you may not otherwise go to. Trains are a great way to see the country but also are more time-consuming and occasionally more expensive than a low-cost domestic or regional flight on a budget carrier. Check out all your options before buying. Trains usually have the advantage of departing from the city center however, as opposed to the airport on the outskirts.
Finally, once you’ve got an estimated travel budget to go with, add 25% to cover incidentals and surprise expenses.