Our Budget for a Trip Around-the-World

If we give you all our money can we can just keep traveling for a whole year?...

Ella’s question that got us started on considering this adventure we are about to embark upon.

Even the kids know we have to consider the cost…

How do you budget for a trip around the world?

When talking with others about our adventure, the question, “How much is a trip around-the-world going to cost?” usually isn’t far behind the initial “How are you going to pack?”

Packing and budgeting are a bit similar in the way that with both, we keep trying to squeeze in just one more thing. The budget though doesn’t have a hard wall to force us to stop adding more on.  Without one in place to help guide us through decisions, we could quickly get ourselves into trouble.

Setting a budget for our trip wasn’t an easy task for us. To begin with, the words “budget” and “travel” aren’t often used in the same sentence in our home. We’ve been lucky to travel to some amazing places and as a result are a bit spoiled with what we are accustom to. Even the kids have a high standard. A few years ago, we were visiting Grand Teton National Park and spending our first two nights in a the motel style cabins at Jackson Lake Lodge. After a long day of travel, Angela VI (then six years old), flopped down on the bed. In a tired voice she called out, “Mommy – daddy, I’m exhausted, I think we should stay in tonight and order room service”.  For those that haven’t been, Jackson Lake Lodge, while comfortable and relatively clean, it isn’t a place you’ll find a room service menu sitting on the desk…,

So where to begin with creating a budget for a trip around the world?

Creating a budget for a trip around the world is a task that really needs to be tailored to each individual family. Some families are comfortable camping, backpacking, or staying in hostels. Others are only comfortable in high end resorts and villas with all the amenities. Neither is wrong or right, it really is driven by preference. Our family falls somewhere in between the two. As much as we’d love to stay in the finest hotels and resorts worldwide, we can’t really afford to stay more than a day or two at a time. We also aren’t really interested in moving every few days.

We started the process of creating our family budget by speaking with others who have taken similar trips themselves. Not knowing where to begin, we thought it would be best if we learned from the experience of others. The majority of those we talked with shared that they were able to take their trip while keeping their spending in line with their normal amounts spent at home. In some cases, even less. While we found that to be encouraging, we didn’t really know if it would be true until we put pencil to paper.

We first jotted down all of our normal monthly expenses:  
Mortgage, electric, gas, water, TV, internet, garbage service, mosquito control, school, after school clubs, average weekly groceries, car insurance, etc..  Any and all monthly expenses we pay on a regular basis.

Next, we highlighted everything we could cancel or wouldn’t be have to pay for if we weren’t home. As we added up the highlighted items, the amount of money we’d be comfortable with spending each month on our trip started to become clear.

Should we just sell everything and go?

When many get to the point of evaluating their current expenses, they choose to sell everything they own before leaving town. We weren’t ready to take that leap. We are lucky that one of our friends was in a need of a place to stay and is excited with the option of living in our home at a rate we were all comfortable with. Our friend now has an affordable place to stay, our house will remain occupied, and we’ll have a home to return to at the end of our trip.

The Pierson Family's Budget

After we had evaluated our expenses, we set our goal to keep our families yearly spend at or below $90k, not including our “vacations”. Our around the world airfare combined with a year-long, international family health insurance plan will be about $30k which leaves us with $60k for daily living expenses; basically $5,000/month.

To stay within our $5,000/month budget, we allocate an average of $100/night for lodging and accommodation. The remainder will go towards daily F&B and transportation costs. When sourcing our apartments, we talked first with our local Virtuoso onsite contacts to hear their advice on the neighborhoods we should target or avoid. Next, we searched for apartments in the desirable locations. We wanted to find places that were clean, had a bed for each of us, a small functional kitchen, and preferably a washer. In the center of a city, we often exceed our target budget. When in the more remote towns and villages, we often find accommodations under the target. We were pleasantly surprised with the number of accommodations available around the world that fit within the budget we set for ourselves.

Taking some "Vacations" while on our adventure

Just like we do when at home, there will be times when we feel the need to break from our daily work and school routines. It sounds funny to plan for “vacation” time while on the trip. We are sure though that there will be times when we feel the need to break away from our normal living budget. When “on vacation” – on a guided tour, a cruise, or at a nice resort, we are sure to go over our estimated daily expense. We have a sum of money set aside for these excursions. Just as we do at home, if we decide to take an extra vacation, we’ll do our best to find a way to pay for it by reducing another expense. 

Since we will continue to work on this trip, our normal income will be applied to the expenses we incur on the trip. If it ends up that we choose to go a little over our budget, it won’t be the end of the world. By simply having the budget in place we will at least be aware of what we are doing as we make our decisions.

If we can stay within our budget, we could very well return after a year of traveling the world together and find ourselves in the same financial situation as we would be as if we stayed home and didn’t take the trip at all.

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