If you’ve gotten to this point in your trip planning, I’m happy to say that you’re on your way!  When you start looking at how much it’s going to cost you on a daily/weekly/monthly basis, you know you’re serious. 

How do you make a budget for a RTW trip?

How do you actually plan on how much you’ll spend?  Well, there are a few things that you are going to be looking at.  To get an accurate number, you’re going to have to look at a few factors.

  • REGION.  Look at what part of the world you’ll be traveling in.  What do the budget travel guides tell you about a budget in this region?  If you’re traveling in Central America and the travel guides say that you can spend between $25-35/day, you can probably trust that will be accurate.
  • ACTIVITIES.  Do you plan on living on the bare minimum of the budget or spending a little more?  A couple questions to ask yourself about this:  Do you want to stay in a dorm bed every single night?  Do you want to go out for beers if you meet some people?  Do you want to take tours, take dancing lessons, yoga classes, eat out, cook your own food?  Don’t lie to yourself; make sure you plan for doing what you want to do.  Maybe you can plan for eating out twice per week and taking one tour per week.  This will push your daily budget up, but won’t run you dry in your first week.
  • TIME.  How long do you plan on being in a certain region?  If you plan on spending two months in Central America, go ahead and multiply your daily budget by 60.  If you want to spend four months in Europe, multiply your daily budget by 120. 
  • ONE TIME HITS.  Don’t forget to add in the one time payments.  Vaccinations and flights fall into this category. 

That should be just about it.  As tough as it sounds, it really is pretty easy to find out how much you’ll be spending.  If you find yourself confused, just go over the above list and start from scratch.  This really shouldn’t even take you an hour.  Go ahead, give it a shot. 

 

Now that you know what your budget is expected to be, are you ready to go?  If you’ve got the rest of the itinerary set and savings in place, go ahead!  Once you go, here are a couple of tips to make sure you don’t run your bank account dry.

  • KEEP TRACK.  Don’t just estimate what you’ve spent, actually write it down.  Keep track in the local currency, then switch it over to your own currency.  For example, if you’re getting 3.6 Peruvian soles per dollar, add up your daily spending in soles, then divide by 3.6. 
  • REPORT TO YOURSELF.  At the end of every week or month, add up your totals from that time period.  Did you spend what you had expected?  If you’ve expected to live on $30/day and at the end of the first month you’re at $37/day, what’s your plan of action?
  • BE FLEXIBLE.  Believe it or not, you’re not going to end up exactly at your daily allowance at the end of your trip.  It’s just a fact of life.  But if your daily spending is way over what you’ve allotted for, take a look at where it’s coming from.  Are you buying a Starbucks coffee every day?  Was the difference in just a couple of tours that were expensive?  If so, go ahead and make an adjustment.  Get the free coffee at your hostel and spend a little more time checking around at the tour companies to find the best deal.  Just because you’re over on your budget doesn’t mean your trip’s over or you have to give up everything that you’re enjoying.  Try thinking about ways that you can save on the things you enjoy.  
  • CUT DOWN ON EXPENSES.  Now that you’re on the road, the time is yours to deal with how you like.  If you decide that you want to spend more than you had initially allotted for and just shorten your trip, that’s just fine.  If you want to extend your trip but not spend less, get creative.  Can you change sheets at a hostel in exchange for a discounted (or free) room?  Can you stay somewhere for a week and negotiate a free night if you pay for five nights in advance?  If you want to try some new dishes but don’t have money to go out to dinner every night, find somebody in your hostel from a different country and offer to make a dinner for them one night and they make for you the next, both typical of your respective countries?

Contrary to popular belief, there’s no big secret to the budget.  If you're not organized, it can ruin your trip.  As long as you stay organized and know what you’re spending you’ll be just fine.