My Budget To Travel Around The World

One of the biggest questions that comes up when planning a trip ‘Round The World (RTW) is cost. Given my research, the short answer seems to be around $50 a day. Of course, one could spend less and certainly a lot more, but that is the average.

With lots of time, low cost travel is possible

Most people believe—as I did—that vacations are expensive. They are, but only because we force ourselves to maximize the limited time we have for one. We buy air tickets that center around what days we can take off from work; we avoid doing house work because we believe that being on vacation means avoiding chores and opting to relax. Yet, seldom do we actually return from a vacation feeling like we had enough time away or feel rested!

When doing an RTW trip with lots of destinations, anyone can agree that you’d need months to do it properly. As such, it requires either a sabbatical from work or just flat out quitting. And herein lies the secret sauce for cheap travel: time. Lots of it. With plenty of time, there’s no need to take that Friday afternoon flight: you could easily take the Thursday or even Wednesday flight and pay less. Spending more days in a particular destination, gives time for cooking or making your own bed: basic chores that you do at home anyway. This mindset allows you to stay in Airbnbs (as apartments normally come without maids), cash-in favors from your friends abroad or even brave hostels and guest houses. Furthermore, since you have so much time available on a limited budget, you won’t feel pressured to try many of the expensive attractions a city has to offer. You’ll have no problem just doing the “cheap” options as you will have remaining funds to advance to more cities. Moreover, as you have so much quantity of time, you won’t be pushing as hard for a “luxurious quality of time”. For example, instead of paying for an all-inclusive tour of a city, you can spend the time to create your own with public transportation, food of our choice and exactly the parts of the city you wish to see.

Prefer longer time in low-cost countries instead if high-price countries

The more time you have, the lower your daily average cost will be, assuming of course, that the destinations visited are well balanced. One shouldn’t expect to tour the Nordic countries for six months and expect a low daily average cost. One must favor more time in less expensive countries like Philippines, Thailand, Vietnam, Cambodia, Nepal, India and less time in more expensive countries like New Zealand, Australia, Japan, U.S., U.K., and any of the Nordic Countries.

Transportation is another major variable that can fluctuate wildly as a function of time. It is possible to travel across oceans for free while working on a freighter, but this path requires a lot of invested time —sixteen days to go from New Zealand to the U.S.— and actual work! But most transportation decisions on your journey will boil down to deciding between land and air travel.

As to air travel, there are pretty much two options: an RTW ticket or book flights as you go. The former comes in various flavors such as paying for mileage, where you literally pay for a set amount of miles to use as you wish; paying for stops, where you pay for a number of hops with potentially unlimited miles (be careful as a layover counts as a stop!); and paying for direction, where you must complete your loop around the globe by a certain date and you cannot back-track. There’s also an alliance limitation on RTW tickets: you are limited to use airlines only within their own alliance: ‘Oneworld’, ‘Star Alliance’ or ‘SkyTeam’. For example, you cannot go to Dubai as part of the RTW ticket since Emirates Airlines doesn’t belong to any alliance (you would have to pay additionally out of pocket). It also means you cannot use budget airlines like RyanAir, JetSart, SpiceJet and countless others in order to reduce the price of the RTW ticket. In short, you’d face many restrictions plus having to plan your entire world trip before you start. All for roughly a 30% discount over buying the same tickets separately. There are agencies that can help you plan the RTW trip but you will still have a lot of the same restrictions and slightly lesser savings.

Go where I want, when I want with whatever airline takes me there

I have decided to go with the pay as you go option. I chose this because I want the flexibility to go where I want, when I want, with whatever airline that will take me there. This level of freedom may come at a cost, not necessarily a financial one, but that of time. I will try to balance out the costs by taking advantage of budget airlines, last minutes deals and what I call ‘free city flights’. These are tickets heavily discounted because they have ridiculous layovers. For a person going on a one-week vacation, that sounds horrible; but for a world traveler, it’s a gift! For example, the flight I took to New Zealand from New York, was only $662.17 because it had a 22 hour layover in Hawaii. That’s actually a bonus when you have time to spare! My total cost for Hawaii was $89.25! How many people can say they went to Hawaii for under $100, all inclusive? Sure, I stayed there for only one night… but I was there. Some Airlines have actually embraced this tactic. Emirates, for example, allows you to add up to a four day layover in Dubai as long as they fly to and from your destinations. So if you’ve never been to Dubai, now you know how to go for free. 🙂

Now, some of what I’ve said above is based on research rather than actual experience. I probably will not average $50 per day, due to my itinerary trying to pack a year’s worth of destinations into 6-8 months. I will travel by air more than someone who has a whole year to reach that daily average.

Follow my expenses online

The average of $50 per day for 365 days comes out to $18250 for the whole year. Since I love a challenge, I’m going to give myself the same budget but only give myself half the time! 😉

To keep me honest, I will keep a spreadsheet up-to-date here with all of my expenses that anyone can see at any time. It will also be easily accessible through the menu.