Dinero, Dinero, Dinero. Budgeting South America

Well you guys did an awesome job on the Straw Poll (and please, continue to add in your estimates/experiences, we’ll keep a running tally). Since I’ve been analyzing data nonstop for the past few weeks, I ran some statistics on what you’re responses, looking at our “collective wisdom.” The theory goes that all of our collective knowledge should produce the most accurate results. We’ll see how that works out. Here’s what you all collectively said:

Total responses: 12

Median budget: $41,000, $34,250-50,000 (25-75%)

Mean budget: $41,171, $34,835-47,507 (95% confidence interval)

So there you go, a nice normal distribution tells us it will cost $41,000 give or take $7000 for us (or two of you) to travel the world for a year.

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Now, that said, Theresa and I get our own say =). We are going to detail for you in as much detail as possible what we expect to spend, but we are going to do it in three parts. One for each continent. This will provide us with nice benchmarks by which to keep tabs on how we are doing with our budget and all of you with a continent by continent breakdown (since that’s where the greatest variance in costs are). We’ll update the finances to see how well we actually did at the end of each continent. So hopefully this will work out.

I’m going to start today with South America. We will be spending approximately 5 months in South America (with a brief stop in Nicaragua). There are two kinds of costs that go into any trip like this one, the first being your mundane, every day existence costs, mainly food, lodging, and transportation between places. The second is all the entertainment and adventure we want to do … which is the real reason to do a trip like this. So that’s obviously going to be a substantial chunk of change. So that’s the gist of how I’m going to sum our planned expenses up.

Every Day Costs:

In our research, we’ve come to the conclusion that private two person rooms at budget hotels/hostels are going to cost us around $30-40 a night. With the nose dive the dollar has been taking these days, we’re going to assume closer to the latter. Now obviously, we have no direct experience with this, but that’s what we’re going to budget. As far as food goes, nice restaurants tend to average ~$5 each for a meal. We also plan on eating some street food and cooking on our own relatively regularly. Using that as a vague basis on which to make estimates, we’ll budget $20 a day for food. This hopefully will be a little on the high end, and will help a little with the “sticker shock” from how little our dollars will buy anymore =). Travel by bus is relatively inexpensive, but by plane is relatively expensive, and neither will be an every day occurrence. Plus, we’ll try to keep our plane travel expenses controlled with frequent flier mile trips (there’s still a lot of work to do on that part of the trip). We do plan on using buses or trains for much of our travel, which seem to be quite cheap. I’d say budgeting $10 a day will cover us for the variety of transportation needs we are going to have. This leaves us at a conservative $70 a day between the two of us. You multiply that by the ~150 days we will be there and we’re looking to spend around $10000 on regular expenses.

Activities:

First of all, we’ll want to do plenty of things like go to museums, go into national parks, rent bikes, things of that nature. I’d say if we budget $10 a day we should cover an activity or two a day for ourselves, and I’m sure we won’t want to do a whole activity or two a day after a very short while. At least not activities beyond lie on the beach or walk around town. A number of the specific activities we want to do in South America are going to be relatively expensive. This is because they are pretty darn cool and lots of other people with plenty of money want to do them too. This isn’t a be and and end all list, but here are most of the specific things we will want to do that we have to specifically hire guides/pay for services:

Galapagos Islands – $1500 per person

Trek to Roraima – $200 per person

Machu Picchu – $400-500 per person

Nicaraguan language school – not more than our food and lodging budget

Amazon Jungle Trip – not clear as our approach is not settled (be sure to vote for your favorite), but likely not more than $200 more than food and lodging.

So when you combine all of this up, we’re looking at around $10000 for both of us to get around, keep ourselves fed and have beds to sleep in. This assumes any flights we take use frequent flier miles or do not gouge our expenses too greatly as they can get expensive in a hurry. It will cost us another $5000-6000 to do all of the things we want to do in South America, leaving us at a total of around $16,000. So there you go, our budget for two people for five months in South America is $16,000.  We’ll evaluate how we did after that leg of the trip.  Next up, Southeast Asia.

8 Replies to “Dinero, Dinero, Dinero. Budgeting South America”

  1. Your South American budget seems to have plenty of padding for what you want to do, but be prepared for serious sticker shock here in Brazil. The Brazilian economy has been kicking much butt in the last few years–combined with a horrible weak dollar we’ve found it the most expensive country in South America.

    Spanish school may be a bit better in Ecuador than Nicaragua (the Nicas speak with a very clipped style). Private instruction in Ecuador is still very cheap and is as clear as an instructional tape.

    You will save big bucks by booking your Galapagos tour in Ecuador vs before you leave home. The flights are fixed rate and $400 round trip from Quito if that helps in your budgeting. If you are interested in a good travel agent in Quito shoot us an email and we can give you one we were very happy with.

    Have a blast.

  2. Thanks for the thoughts Sean, the idea behind the budget is to be quite conservative, so I think we do have a fair bit of padding in there. But like you mentioned with Brazil, I won’t be surprised to find that in many places things cost a fair bit more than in the recent past due to dollar devaluation and other factors. Interesting point about Nicaragua and Ecuador … I guess I’ve learned the “clipped style” because most of my experience with spanish has been in Nicaragua.

    Christine, since costs are going to be slightly different in Southeast Asia and Africa and since we won’t be on those continents as long, I won’t speculate on that until I’ve done some more research and run some more numbers. Seems like a good number though, and one I’d be quite happy with =).

  3. What are the hard costs not associated with your travel time; for storage, pre/post healthcare, insurance, etc. It seems the more i work, the more i realize that things are more expensive due to time and travel… i understand qunatifying the trip in travel and stay terms, but will you do an analysis to see if you can modify the trip to save money, i.e. the path, time of year, seasonal expense change.

  4. Mitchell, there are definitely some pre-trip costs that add up. My parents have very graciously agreed to house our stuff for the year, so we don’t have to pay for storage, but we will have to pay to transport it to Louisville. We’ll be getting comprehensive travel/health insurance, and I have my eye on a policy right now that also provides two months of coverage back in the States, which will help as we transition to jobs and avoid that dreaded no coverage period. We’ll maintain car insurance to again avoid that no coverage issue, but at the most basic coverage possible, so at a pretty low cost. Immunizations and prescriptions for malaria drugs etc. will set us back a good bit also. As we get more firm numbers on this kind of stuff, we’ll post about it and add it to our budget.

    We’re pretty set on our overall continent to continent route. One of the prime decision factors was being at certain locations at certain times—Patagonia when the weather was decent enough for hiking, Machu Picchu when the Inca Trail is available for hiking, Africa when it’s good safari season, etc. However, we’re aiming to hit shoulder seasons in those places rather than high season. And other locations we’re visiting in the low season—avoiding the increase in costs associated with peak season.

  5. I say that’s about right, given all the tours you are throwing in there. When you get there, you may find you can make it a bit cheaper buy living locally as much as possible. But you’re on the right track.

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