Dear god, can it seem like an obstacle to living our dreams. In fact, it’s one of the most common challenges I hear about when I ask why people don’t or can’t travel the way they want to do, start the business they’ve been dreaming of, or otherwise leap out of a comfortable (or not-so-comfortable) 9 – 5 and into something unconventional.
I get it. Money is, by far, my biggest worry. It’s the one thing I’m constantly having to re-frame my thinking around. And the truth is that most of the successful people I know, the people who are really living the lives they want to be living, also struggle with money worries – no matter how much money they have (my friend who started a business with 3,000 euros was concerned and so is my friend who had $150,000 when he quit his job).
Just in case you, like me, consider money one of your greatest challenges, today I’m starting a new series about how I do it…how I travel the world full-time making a living, staying within a budget, and so on and so forth.
I thought I’d start by talking about my expenses.
The first thing you should know is that my lifestyle of full-time travel is something that I do on the same budget (or less) than I lived on in the US.
The second thing you should know is that there are people who travel the world full-time on less than I budget. In part, this is because most of my travel is in Europe, one of the more expensive continents you can travel on. In part it’s because I don’t stay in the cheapest places possible and, since I’m working and traveling with a dog, I rarely housesit or couch-surf.
For me, this works. Because the truth is that budgeting is the same no matter where you are. It’s all about spending less than you make.
But you already know that. Without further ado, then…my personal travel expenses…
Monthly Living Expenses
My biggest expense, both in the states and abroad, has been housing. When I left Denver, my budget for housing (which, for me, included my office since I worked from home) was $1,000, not including utilities, internet, etc. When I took to the road, I used this same budget, only this time, since I’m renting vacation spaces, internet and utilities are pretty much always included. Of course, I try to go cheaper than $1,000 where possible, so if you look at my housing across a 12-month period, the average probably falls lower, maybe around $800 per month.
(And keep in mind that I don’t always stay in the cheapest places I find. In Paris, I’ve seen private room listings for as low as $775 per month. In Prague, I saw a room listed for under $400.)
This is one of the tricks to affordable living on the road. First, that you budget the same amount or less for things and stick to that budget as much as possible and, second, that you find ways to make that budget actually workable. In my case, this means staying in places for a month or more. Monthly apartment rental prices are significantly lower than nightly or even weekly prices. This is why I prefer Airbnb to the other apartment rental sites out there: owners include the monthly prices as well as the nightly and weekly rates, so you can see the long-term prices with just a couple clicks.
The other major every-month living expense is, of course, food. Personally, eating fresh and good food is very important to me, so I’ve always allowed myself to spend more money on it. In the states, I shopped at Whole Foods and tried to buy healthier options, which were often a bit more. I don’t attach a specific number to this, but always strive to only buy what I need and to buy it in the best quality, most local form I can. I mostly cook at home instead of eating out (just as I would in the states) and when I do eat out I go for quality over quantity.
In Croatia, my full food spending (for both eating in and out) landed around $350. In Playa del Carmen, Mexico, it was a little over $400. And in Paris, it came in just under $450. So, while it varies, it generally stays within the same range and is very similar to what I used to spend in Colorado.
The third major monthly expense is transportation. For me, this usually means one or two train and bus tickets. During the month, I choose to walk whenever possible (which, in Europe, is nearly always) and only take buses and metros when the weather is walking-prohibitive or if the walk would be more than an hour long. This keeps my transport costs way lower than they were in the US, since my US costs included car insurance, car payments, gas, car maintenance, and yearly tag renewals (conservatively, I was spending at least $500 per month). These days, I spend anywhere from about $30 (an overnight train ticket from Italy to Paris on sale) to $350ish (trains from Paris to Split, Croatia).
And the secondary benefit of the whole walking thing? I get to see more of my temporary cities and I stay fit and strong.
Finally, my monthly expenses include Luna’s food and care, which varies a little from country to country, but rarely exceeds $100 per month, and entertainment/fun money, which actually often ends up being less than I spent in the states because abroad I’m more content to simply take long walks, hike, and participate in all manner of other free or cheap activities.
Miscellaneous supplies and gifts purchases tend to run less abroad as well, in part because I am careful about what I buy, since I carry everything on my back, and, in part, because I’m less bored and thus feel less of a need to shop. The ironic and wonderful thing about this is that the things I buy are often higher quality and more expensive, yet I seem to be spending less overall.
In all, I try to keep monthly spending under $2,000, which was also my goal in the US. (And even with this as my budget ceiling, I very often come in far under. Some simple math with the five monthly place budgets I posted this year shows an average falling around $1,500.)
For specific monthly budget breakdowns around Europe, visit the budgeting + saving category.
I generally separate my business expenses from my regular monthly expenses, since they vary pretty wildly.
Monthly, I pay $6 for my Skype phone number, which allows me to take unlimited incoming calls from the US. The Skype number is a US phone number, which means people in the US can call at US prices no matter where in the world I am, as long as I have an internet connection. This is how I stayed connected and accessible to my US clients while traveling.
I also pay $10 at a time for credit on a Google Voice account, which allows me to make outgoing calls cheaply. I use it to call people in the states and all over Europe and the cost tends to range from one to three cents per minute. This isn’t a set monthly expense and if I had to guess I’d say that I probably spend $20 – 30 year (much, much less than I would spend if I owned a cell phone).
Once a year or once every few years, I also have expenses for web hosting and domain renewal for the website. This costs me less than $100 per year.
Another variable cost is contract labor. Sometimes I pay someone to write or edit something if I’m overwhelmed. Other times I hire a developer or a designer (like the fabulous illustrator who did this). These are one-time expenses and vary greatly, so I budget for them as needed on a per-project basis. I also tend to rely a lot on trades, offering up writing or strategy consulting in exchange for design or development work that I can’t tackle myself.
Finally, there are taxes, which I pay quarterly (it’s not yearly, like when you’re employed full-time). So every three months I calculate the taxes I owe (to the best of my not-a-math-whiz ability) and send the government a check. Then at the end of the year I do a much more detailed calculation (usually with the help of a tax professional, which adds another $300 – $350 in expense to my yearly tally) to make sure everything has been paid properly. Often I find that I overpaid (due to a better-safe-than-sorry attitude) and get a small refund.
Quarterly & Annual Expenses
There are a few things I don’t budget for monthly (or include in my monthly budget posts) because they are yearly or quarterly expenses and may vary greatly from month to month. One of these things is plane tickets.
I’m not a traveler that flies a lot, preferring to explore one continent thoroughly at a time and take trains where possible, so I don’t track plane ticket costs monthly, since I’m not buying them monthly. This year, I flew internationally four times for non-business reasons (four one-way tickets, all of which, actually, were unexpected and only due to my run-in with British Immigration and my subsequent need to re-plan a large chunk of the year, and all of which were outside budget for that very reason…see Expecting the Unexpected below) and twice for business (two round-trip tickets in those cases, covered by clients or within my business budget).
In 2014, I’m hoping to spend most, if not all, of the year in Europe which, knock on wood, may mean zero plane ticket purchases on my own dime.
Health insurance is another yearly one. I pay for 6-month or one-year plans at a time. At first, I used travel insurance, but now I’ve switched to global coverage under a more long-term option that was designed for expats. I chose my plan after a lengthy discussion with a Pennsylvania-based insurance brokerage and paid for one year up front. For a healthy, 20-something who plans to spend no time in the US, Canada, or a few select other high-healthcare-cost countries, plans can be as low as $700 for the whole year, I believe. I pay a little more (just under $1,000 for the year) for coverage that includes the US and Canada (as long as I spend less than six months of the year in them), just in case.
Which brings me to the other ongoing, variable expense that I tend to look at on a yearly rather than monthly basis: healthcare. Doctor visits. Dentist visits. Medications. The good news is that the rest of the world tends to run way cheaper than the US. Three months of birth control in the US cost me about $150 out of pocket (and that’s with a discount). A doctor’s visit and a three-month supply of birth control in Germany, by contrast, cost me under $100. And three months of birth control in Switzerland? Less than $50.
Now, most good budgeters divide their yearly expenses by 12 and add that number to their monthly budget. For some reason, my brain doesn’t work that way. Instead, I look at the big picture, adding my monthly budget x 12 to my yearly budget items and making sure that my yearly income is set up to exceed that number.
This works for me because my income varies wildly month by month, but does not vary too much from year to year. Some times of year are busy and lucrative. Some times are lean. If I look at everything on too much of a micro scale, my emotions and spending habits would vary wildly, too. If I look at the consistency of my income in 2011 (my first year of self-employment), 2012, and 2013, however, I feel secure in my monthly budget, even if my monthly income is sometimes lower than my monthly spending.
Expecting the Unexpected (Savings)
Finally, for me, part of feeling comfortable starting my business and then, a few years later, leaving to travel full-time was having a decent financial buffer in the bank. I was advised while starting my business to have at least six months worth of expenses in the bank just in case. Being a bit neurotic about money, I waited until I had 10 months and enough clients that I was already almost breaking even.
Similarly, when I started traveling, even though I would be working normally and hopefully earning normally, part of feeling comfortable was the knowledge that I had a buffer. If all my clients ditched me in month one, I could live for a year without income (assuming I lived relatively frugally).
Everyone operates differently on this. When my aunt started her business, she quickly went into debt. Yet she was wildly successful over time. I’ve also heard stories of those who moved to a cheap part of Asia to start their business, which meant the limited funds they had could last them much longer while they got things off the ground. I know one man who told me it’s going to take $150,000 to start his business. Another woman told me a success story that started with just 3,000 euros in the bank. A recent roommate told me she’s been traveling and working for years with just a few hundred euros to her name.
All this to say that my path isn’t the path. It’s not what every nomad does. It’s not what every entrepreneur does. But it is my story and so far it’s worked out pretty darn well. By the time I quit my business and started my full-time travel and inspirational writing career a couple months ago, I had enough buffer to live frugally for as much as a year and a half without income (which, as I type it, amazes me). I’m not breaking even in my new career yet, but because of my buffer, that’s okay.
Any expenses you tend to have during travel that I haven’t mentioned? Any questions about travel expenses and budgeting? Toss them in the comments.
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