The second post this week in our ‘Resources’ theme – all you want to know about budget.
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When dreaming about a Round The World trip one of the first things that people wonder about is budget and if they can afford it. In the FB group for traveling families that we have joined this is also one of the most common questions asked: “how much should we budget for a family of 4 that travels to A, B and C?” It is, however, also a very difficult question to answer as it really depends on where you travel and what your traveling style is.
Staying in backpacker style hostels in Thailand is way cheaper than traveling by campervan through New Zealand. Visiting 15 different countries in 5 continents will also blow much more of your budget than taking a road trip through Europe and not spending money on expensive flights. Some people like couch surfing or opt for housesitting thereby reducing their accommodation costs to zero, while others prefer to stay in holiday homes or hotels and pay a bit more. Also adding bucket list activities to your trip will make a dent to your budget.
Looking at all the info we have seen over the year the budget for an average family of 4 or 5 falls somewhere in the range of $15k -$150k/year. The low end number would be a family traveling mainly in South East Asia with no long distance flights, while at the other end of the scale would be a family that travels mainly in 1st world countries, have a bit of luxury here and there and several long distance flights.
So what was our budget and how did we roughly spent it? We knew from the start that we wanted to visit ‘expensive’ countries. New Zealand and Hawaii are not known for budget travel. We also knew that we are no longer backpacker/budget style travellers and we desire certain standards for our accommodations. hence we set our total budget for a 10 month trip to $100k and if we sum it all up now, we will be ending just below that figure.
This is how we roughly spend the money:
- $25k for flights (we booked a business class RTW ticket and purchased a few separate tickets)
- $42k for daily living (about 150$/day for food, accommodation, local things)
- $10k for local transport – mainly car rental as we prefer self-drive over public transport
- $18k for the bucket list items (things like: Disney Land, helicopter flight, dolphin watching, 5 star safari experience, etc)
- $5k for insurance, vaccinations, admin things, unforeseen items and purchases of new stuff (travel bags, new clothes on the road, etc)
So where did the money come from? Again different people will have different means of getting the funds, but what I have learned this year is that doing a trip like this is doable for most people, it all depends on your priorities. Some people live frugal for a few years, save a lot and sell their house and all possessions to get the money. Others work online as blogger or website builder and create a stream of income to fund their travels. In our case it was a combination of things. We got some money coming in from renting out our house and dividends from our shares portfolio. Part of the money came from a typical Dutch employment benefit called the lifecycle scheme, which allowed us to save money tax-free in the past years and which can be used to fund among other things time with the family. The rest of the money came from selling some shares and out of our savings account.
This may sound like a lot of money (and I know it is a lot of money), but we don’t consider it as money lost, it rather is an investment for the future. An investment in an experience that will continue to form and shape how we as a family will develop in the coming years. Recent scientific studies shows that people are much happier if they spend their money on experiences rather than on buying things. Right now at the end of the trip we can fully support these findings and we can recommend anyone dreaming about doing something similar: just go for it. It is money well worth spent.