How We Paid For A Year Of Travel
| by Aracely on July 13th, 2010 | 34 Comments » | Travel Tips, Trip Planning
Working at the Beach in San Juan Del Sur, Nicaragua
Perhaps you are expecting me to reveal a secret formula or quick way to make money that gives you the means to take a year long trip. I’m sorry, we do not have one.
It’s similar to asking a trainer or nutritionist what’s the best way to loose weight and their response is always, “eat healthy and exercise,” uh, what a bummer. Who wants to do that! We never want to do the work we just want to bask in the results.
Now, I’m definitely not an expert on financial planning or round the world trip planning for that matter. But, I am going to share with you the personal details of how Jason and I were able to pay for the $15,000 USD each for our year of travel in Latin America. Unfortunately, my answer for how we did it is probably worse than eating healthy and exercising. It’s financial responsibility. Gasp!
Aracely’s Financial History
Currency We Have Collected During Our Trip
I am from a single parent home and have worked since the age of 14. My mother has never had the means to save much money and always lived from paycheck to paycheck. That meant I had to work for what I wanted. I rushed through college because I knew I had to hurry up and help my mother and younger brother financially. I paid for it all with financial aid, scholarships, grants and working up to three jobs at one time. Oh, and I never had any credit card debt, ever.
After college I was hired by Mercedes-Benz where I worked for a little less than 5 years. With my salary, I paid for my own apartment, car, bills and helped my mother. This meant I too lived paycheck to paycheck during that time. Then in 2007, at the age of 25, I landed a job with a Fortune 500 Company. The move gave me a much needed 50% salary increase. When this happened, I did not purchase a new car or get a bigger apartment as most Americans have the habit of doing. In fact, I reduced my spending by getting rid of my leased vehicle, since I could now take The Path (NJ-NY public train system) to work everyday. This enabled me to save a lot of money over 1.5 years.
5,000 Chilean Pesos
When we decided to travel for an entire year we began to run the numbers and calculated that we needed $15,000 USD each. This does not include any of our gear expense. In my case, I also had to make sure there was enough money to continue to help my mother during the time we were traveling. That was an additional $6,000 dollars for the year. Upon our return, I wanted to make sure that I had enough savings left to feel financially safe for emergencies.
Once I knew all of the above was feasible, from only 1.5 years of savings, I gave my boss my resignation notice.
Jason’s Financial History
1 Guatemalan Quetzal
This is probably the only time I will consider my age an advantage. I had never planned on long term travel before, therefor I have never saved money for it. But, I have been working since 1997 and was able to begin saving money after I paid off my debt in 2003. My debt was the result of a owning a high maintenance car and some small graduate school loans. From 2003 to 2009 I had saved enough money for a down payment on a home, my highest priority at the time. I own a vehicle that is paid off and have no existing debt. It was the perfect time to move forward on a home considering the housing market had tanked.
5 Argentinan Pesos
Unexpectedly to both us, we suddenly made a decision to travel long term. The good thing was, I had the money. The bad thing was, I would be spending the down payment of a house. We look back now with no regrets. I don’t see us buying a house anytime soon, it would hinder our traveling significantly and eliminate many freedoms we have today.
I didn’t necessarily save for this trip, I saved for the sake of saving. I saved for a house, financial freedom, an active social life and fun vacations. Saving includes eliminating credit card debt. If you are saving money, but at the same time increasing your credit card debt or taking out loans for cars, you aren’t saving. It’s a concept that the United States struggles with, including our government. Debt takes away your freedoms.
I quite my job and am now cruising along on my many years of savings.
Our Budget Progress
10 Bolivian Bolivianos
We rationed our budget at $1,333 USD each per month for a total of $2,666, of that $1,000 was allocated towards “adventure” and the rest for day-to-day living expenses. The actual expenses varied from month to month and country to country. After 11 months of travel we have already exceeded the $30,000 mark by $1,500 dollars, we still have not purchased our tickets home and have one more month of travel expenses left. We both agree that we could have stayed within our original budget if we didn’t have friends visiting from home. That’s not to say we didn’t want our friends visiting.
When friends visit us, it’s a vacation for them. They have 2 weeks to see and do as much as possible. That usually means flying places and eating at fancy restaurants. If we eliminate the flights and fancy restaurants we ate at during our friends’ visits we would have made our budget. During our last month in Quito, Ecuador, we are now eating in all the time, saving money. I don’t think it will be enough to break even, but it’s helping.
Advice
There you have it. I’m sorry again for not being able to provide a secret formula. The only secret is financial responsibility. Even though we already had the money saved before we decided to do long term travel, I think the same behaviors apply regardless of what you are saving for. You must have discipline and patience. These characteristics are important for more than just saving money.
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Aracely / Jason,
I enjoyed this post and the idea of saving for what makes you happy or saving for savings sake are two good rules of thumb when it comes to personal finance.
I put together a list of my top ten money tips, mostly drawn from my experience as a first generation Italian American:
http://www.scordo.com/2010/04/on-what-italian-americans-immigrant-personal-finance-tips.html
Thanks Vince, glad you enjoyed the article. It’s been a while! I hope all is well with you!
Aracely – that’s cool that you were able to work while traveling AND it was enough to cover your expenses.
Yep, there’s no magic formula. In our case we were able to save 75% of our combined income (on average/below average salaries in the UK) for travel buy stopping spending money on unnecessary things. We have never had the need for fancy cars and always got a cheap old car instead. We pretty much gave up drinking and stopped buying ‘stuff’. Now we are travelling indefinitely and it’s all worth it.
Congrats! That’s very inspirational as well!
Thanks for the advice! I’m glad you guys aren’t way too over budget. I always wondered how yall were able to make this trip!
Yes Shariq, many others were asking us how we did this. This is why we wrote the post.
I like the straightforward nature of this post – there isn’t a magical formula, just financial responsibility and being able to live with less. Dan and I went through a similar process to be able to move to Prague and then through saving in Prague by living in a simple apartment and eating in a lot instead of spending everything on an apartment (what many of our friends were doing) or cars. This is what allowed us to get started on our journey. Like you two, no regrets
What a great opportunity to travel and work at the same time. I agree it all comes down to budgeting on a daily basis, but also giving yourself treats to enjoy the adventurous things.
Yes, there has to be room for fun. I can let go of the other stuff like eating fancy and prefer to experience new adventures.
Best of luck on your last month.. I keep looking in your posts for Ecuador? Did you spend a lot of time here?
We spent a month back in Dec/Jan and we are currently in Quito for two months. We did post one of Ecuador so far: http://www.twobackpackers.com/2237/south-america/more-to-ecuador-than-galapagos/
and have others coming up soon.
Best of luck on your last month. I agree – working and traveling at the same time makes the budget so much easier to manage. And, the only way to save enough money is to be financially responsible. It’s hard to say but true.
That is really good for the two of you, I have read single people spending over $60,000. In the last 2.5 years I have only went through 35,000. So traveling slow and spending responsibly is the trick.
Now I am eating more Raw Food and my food expense has dramatically decreased.
Do you know where they were traveling? I guess I can see someone spending close to that if traveling in more expensive countries like western Europe, US or Australia for example.
Traveling slow is a great way to cut cost as well as eating in..although I like to try local restaurants which usually are much cheaper than the touristic spots. Safe travels!
Most were doing the common routes, Europe, Turkey, Middle East, India, southeast asia and down under. The common RWT.
But everyone has different styles of travel, I of course have local food, but the home cooking is the best, my friends mothers in Bulgaria know how to cook. Yet, when I am going from place to place I eat mostly Raw food, keeps my energy high.
Definitely agree with the no nonsense tone of this post-even if a person is not saving for a huge trip, it’s still a good reminder that credit card debt is a killer. With a couple weeks left, how are you feeling about your return home?
We are excited to see our family and friends back home. Time has flown by I can’t believe the time has come to head back. We have tons of amazing memories, pictures and hours of video footage that we need to go back and edit to share with our audience. I’m not sure how I will feel being back and how soon will I get wanderlust again. We shall see.
I think it’s important to convey that these amazing year-long trips aren’t a result of trust funds or old money. Thank you for helping to dispel that nasty thought and show it can be done through elbow grease. It’s how I’m doing it, too.
I agree Keith, people often say to me “You’re so lucky” to be doing this…luck has nothing to do with it. It’s hard work and dedication that drives us.
Agreed! Nice round-up.
Hey Aracely,
I often get the ‘you’re so lucky’ comment as well. I paid for my trip the same way many people have: I worked and I saved. When friends were buying cute new clothes and dining at expensive restaurants, I was trying to stash money away to quit my job and travel. Thanks for sharing!
Bueno!
My girlfriend and I have just started our year of travel. We did it the same way. Saving up for a small budget of 1200/month each, with a similar cushion for when we get back to find jobs as we have both left them to follow additional passions (which everyone should work towards).
Great work!
Taylor
Best of luck Taylor, where are you guys and where are you planning to go? Safe Travels!
Great advice! I’m planning on my RTW trip – planning with a first stop in Guatemala – which I’ve been to twice already -but have friends to visit. I plan on then going to South America – and then who knows from there. I’m hoping for a longer trip of course – pretty much save as much as I can – and I hope/plan to leave by Nov 2011 to embark on my trip. This site has been great in helping me plan! Thanks so much for make such a site!
Hi guys, just found your site from another blogger who recommended it. My partner and I have been traveling for a year now and if we were to write an article on how we did it financially it wouldn’t be much different from this. I was a student and Katherine a social worker when we were saving for travel so not exactly pulling in the big bucks!
The biggest difference in how we did it is that we house-sat for a total of 11 months so didn’t pay rent for that whole time! That saved us a small fortune! We still could’ve done it without house-sitting, it just would have taken longer or we would have left with less.
At the end of the day, travel doesn’t have to cost as much as people think. In fact, we’re saving money by traveling! The way the housing market is back in Australia right now we’d be paying a fortune in rent – much more than what we pay for accommodation on the road!
Looking forward to following you on your travels and soaking up the travel wisdom
It’s so great to read an honest post on how to save for travel. I was pretty much doing the same thing as Jason—saving for savings’ sake—until I decided to spend it on my trip. It’s a good philosophy.
And financial responsibility is important. Not enough people pay attention. And too many people think a year of travel isn’t financially responsible, when it in fact can be. Great write-up!
So simple, yet so difficult to wrap our heads around sometimes. If it weren’t for my dream of world travel motivating me to financial responsibility, I’d probably be still living paycheck to paycheck.
Dreams have an uncanny power to motivate!
Hi Aracely and Jason!
I’ve been reading over your blog posts and they’ve been very interesting and helpful! A group of friends and I are planning on backpacking through Europe for about 5-6 weeks next year – a very expensive trip for sure – but we’ve already started saving up and thinking of extra odd jobs we’ll be able to do for money. This entry has really helped to motivate me to keep a tight hold on what I’ve earned so that I’ll be able to enjoy it abroad
Any suggestions would be greatly appreciated, even though you have traveled in different regions!
A great way of getting money for a long backpacker trip is to work in a country that has a higher exchange rate to the one you would be travelling. ie – working in London, UK for one month (and saving!) would easily afford you three months in sunny South Africa.
Thanks so much for sharing a great blog.. We will consider these tips and ideas when we plan traveling next year.. WE are currently trying to get our blog up and running and hope to share our adventure!
Cool, I am higher then that but did Canada, US, Asia and a really egregious stint in Europe. However similar ball park considering locations. I hear of these ridiculously low sums and figure these people well I dunno.
Thanks for sharing, great blog, just became a facebook fan and look forward to further updates.
Great story about your live. Sounds in some points familiar to mine. Starting in Sep for a 3 1/2 months trip to SEA and may do some video blogging as well. Which editing software do you use?
Thats the right guide. I have been working for an year, and living paycheck by paycheck. But after reading your post, I now realize “there are no free lunches in this world” Thanks guys. I hope some day I will also be able to travel that far…that way..