Budgeting for Your Round-the-World Trip: Coming Home

On December 15, 2009, just a little over two months after landing back in the United States after our year-long trip, Jeff and I closed on a house, putting a solid 20% down. No, we aren’t rich. We didn’t discover that we were the long lost relative of a member of the royal family. We didn’t win the lottery, embezzle funds, or steal and pawn a gold Buddha. No, the money we used to purchase our house didn’t come to us in any exciting way. Instead it came to us the old-fashioned way: by working and then saving.

When the idea of a RTW trip first weasels its way into your head, all you can do is dream. You dream of what it will be like to stand at the Sun Gate and look down on Machu Picchu after three hard days of hiking. You dream of the way your heart will race the first time you see a lion in the wild. You dream of the taste of the pad thai that you will learn to cook yourself in a class in Chiang Mai. You plan routes in your head. You read blogs and travel guides and you watch travel shows to fuel your dreams of all the places you can go and the adventures you can have.

Then when the idea has entrenched itself so much that it’s no longer a dream but a plan, you begin to look into the costs. How much is a RTW ticket? What about individual legs? How much does it cost to sleep and eat in South America? Africa? Asia? Australia? What’s the price tag for a gorilla trek in Uganda or learning to scuba dive in Malaysia? You determine what kind of traveler you are. You decide what you can live without and what you must have. You calculate, add and subtract, guesstimate here and there, until you have a number. Your budget. The amount it will cost you to take a round-the-world trip.

Maybe it’s $50 a day. Maybe it’s $100 a day. Doesn’t matter. Everyone travels differently. What does matter is that what you have here is only a partial budget. What you have here is the cost to travel. What you’ve forgotten is the cost of coming home.

Of all the destinations on your trip, home is going to be the most expensive for the majority of round-the-world travelers. Sure, maybe Mom will let you crash in your old room and will have missed you so much that she’ll fix you food and let you borrow her car, but after the absolute freedom of long-term travel being dependent on someone else is not going to be very fun. So what you’re going to want to do is budget for both your trip and your return home.

Here’s how in five easy steps.

1. Take a realistic look at how much it costs to live at home for one month.
How much is an apartment going to cost? Don’t forget the deposit and utilities. How much do you need for groceries? What are your transportation costs? Assume that you’ll live pretty frugally upon your return, but don’t be too ascetic in your budgeting. Chances are you’re going to want to catch up with friends over a beer or hit your favorite restaurant when you get home.

2. Assume you’re going to be without income for at least one month upon your return. Then plan for three.
While some people are able to line up work in advance of their return, most travelers return from their travels to find themselves unemployed. Getting hired, especially these days, isn’t the easiest thing, and even in the best economy, the time from application to interview to hiring is usually a few weeks at minimum. And honestly, you’re going to want to give yourself some time to readjust to home before you slip back behind a desk. Three months worth of savings gives you time to re-enter, look for a job, and hopefully get hired, if not at your dream job, at least at the local coffee shop.

3. Take the three month figure and then pad it.
Did you consider the fact that if you’re unemployed, you’re also without health insurance (at least in the U.S.)? You’re going to need money for a temporary policy. Did you sell all your stuff before your trip and have to go shopping for something to wear to your interview? Regular life is often filled with unexpected costs. Be prepared.

4. Set up a separate account as your re-entry fund.
Every time you feed your round-the-world account, feed a portion of it to your re-entry fund. It’s just as important as the actual travel fund, so don’t neglect it with the idea that you’ll feed it at the end. Even better, feed it first, and then start in on the travel fund. You’re going to want to make sure this is a secure account (not stocks that might crash before you get home), and it’s a good idea to make it an account that is really hard to access from the road so you don’t “accidentally” spend it when some “opportunity-of-a-lifetime” presents itself to you when you’re drunk at 3 a.m. in Nicaragua.

5. Depart on your trip, knowing that you’ve done what you can to make re-entry easier.
With a nest egg set aside for re-entry, get going. Have fun. Take part in all those adventures you dreamed about when the idea of a round-the-world trip first crossed your mind. When you do come home, re-entry will be challenging (and that’s okay), but you’ll have made it a bit easier on yourself by taking care of the coming home part before you ever left.

If you’ve taken a long trip, how did you manage when you returned home? If you’re planning a trip right now, do you have a coming home fund? Share your tips for planning and saving for re-entry costs.

“Special” Price for You

If you’ve traveled anywhere outside the developed world, you know that for you there is always a “special” tourist price, and by special I don’t mean discounted. If locals pay $5 for a taxi ride, you pay $10, though you’re probably quoted at least $15. Walk into a hotel and the rate you’re quoted is probably not the same rate quoted to the person in front of you or person behind you. You’re constantly being sized up. How much money do you look like you have? How much money do you look like you’ll pay? How big of a sucker do you appear to be?

Most things don’t come with a price tag in the developing world. You have to figure out what something is worth to you and then bargain with the person offering said item until you reach a point where you are happy with the price or you just have to walk away. It’s all a part of the game. Some people take it too far, fussing over the equivalent of pennies, while others hand over whatever is asked the first time around. Neither is good…for you, for other travelers, or for the local economy.

Most of the time I don’t mind it. But sometimes, like when a guy selling fake sunglasses asks $30 for them when even in the U.S. you wouldn’t pay more than $5, it bothers me. Do I really look like I found the tree from which money freely falls? I’ve accepted the fact I’ll pay more; I’m not willing to be extorted.

In Asia more than anywhere else we have been, “special” prices for tourists are the norm. And here tourist rates aren’t just for taxi rides, market purchases, hotel rooms, and the like; they’re also for admission to attractions. On one hand, I understand this. The citizens of developing nations usually don’t have loads of extra cash to spend on visits to museums, historical sites, and the like. You can also argue that through taxes and the like, locals are already paying for these places.

On the other hand, why can’t there just be a set value for things? In the U.S., if I want to visit the Grand Canyon, I have to pay the same as someone from Europe as someone from India as someone from Mexico. We have determined that the seeing the Grand Canyon is worth a certain amount, and if you want to visit it, it doesn’t matter who you are or where you come from, you have to pay the price. Some of my taxes are already going to support the national parks, but I’m not given reduced admission because of that. Perhaps using the U.S. as an example is not fair considering they’re not going to let you in to the country in the first place unless you can prove you have a good bit of money, but the idea remains…there is a firm and fixed value for things irregardless of circumstances.

Most of the time, I just roll with it, pay what I have to pay and move on. And sometimes it seems like it’s not a bad deal. For instance, to visit the forts and palaces in Rajasthan, India, we had to pay about 250-300 rupees ($5-6) each while locals paid around 10. It’s a big difference, but for their 10 rupees locals were given nothing but admission; those paying the foreign price received nice brochures as well as very well-done and interesting audio guides. Additionally, the notices that said the admission fees were going toward restoration work didn’t seem like BS, as the buildings were all in rather remarkable shape and were well tended to.

In Uttar Pradesh, it was a completely different story. At Fatehpur Sikri and Orchha, we again paid about 25 times the local price, but this time got nothing in return, not even a sketch map of the site. Additionally, the sites were not very well-maintained, so it felt as all the extra money we paid was just going right into the lining of someone’s pocket (which I have no doubt it was).

At the Taj Mahal, foreigners pay 750 rupees, 75 times the local price. But don’t worry you do get something extra here: a 500 ml bottle of water valued at 6 rupees and a pair of shoe covers so you can walk around the Taj without removing your shoes worth about 10 rupees. Definitely worth it, don’t you think? And while paying approximately $15 to visit a world famous site like the Taj Mahal isn’t in itself unreasonable, what makes the price so hard to swallow is knowing that just five years ago, admission was 15 rupees, or $0.30. And no, the price didn’t rise with inflation or go up each year; it was actually increased from 15 to 750 in one fell swoop. I don’t know, but to me that feels like they’re not charging what they consider a fair price but are instead trying to see just how much us crazy foreigners will hand over before we call the bluff.

What do you think? Should foreigners have to pay more to visit sites than locals? Should the U.S. and Europe implement a similar policy? If it is fair to charge more to foreigners, how much more? I’m curious as to what you all think.

Africa Budgets Posted

For all those who are curious about how much it costs to travel through Africa, we’ve posted country budgets for all of the countries we visited: South Africa, Namibia, Botswana, Victoria Falls, Mozambique, Malawi, Tanzania, Uganda, and Kenya. Just click on the tab at the top that says “Country Budgets,” and you can explore to your hearts content. For those who just like to know the big number, in our three months in Africa we spent $9,922.31.

How to Save Money When You Don’t Have Much to Begin With

It seems like finances—personal, corporate, and government—are big news these days. I can’t click over to CNN without reading some story about the current financial crisis…or the custody battle of some celebrity. Obviously both topics that require careful consideration by the American public.

But I digress, the quality of news on CNN is a topic for another day.

Today I want to talk about finances, and in particular those articles that promise to tell you how to save money and usually offer some tantalizing tidbit about how some family saved $25,000 by just making a few changes to their lifestyle. I always click open these articles and begin reading, looking for a new way to save, only to find out that the family being profiled saved that money by cutting out their $10,000 a year coffee buying habit, only buying 15 couture dresses this year instead of 20, and using their Audi for routine errands instead of taking out their Ferrari when they just need a gallon of milk.

Very wise moves indeed.

But completely irrelevant advice to me.

If I had $10,000 to spend on coffee, then I probably wouldn’t have much need to worry about how to save $25,000. And if I owned a Ferrari would I seriously even blink when gas prices skyrocketed beyond the gas pump’s meager price telling abilities? I think not. But then again, I’m not rich, never have been, and almost certainly never will be, so I don’t have any firsthand experience with how difficult it must be to swim in cash (DuckTales, anyone?).

So since I find these how-to articles so irrelevant to my life, let me share here with you five of my own tips for saving whatever cold, hard cash you can find under your couch cushions or rolling around the floor of your 1996 Nissan.

1. Spend all of your free time deep in the backcountry.
It’s practically impossible to spend money while you’re in a tent in a forest in the middle of nowhere. There aren’t any stores, and there’s no entertainment beyond the annoying people sleeping a few trees down singing loudly about pickles well past midnight. And those bears nosing around outside, they don’t want your dinero. They’d rather just have your hot dogs.

2. Develop your own special form of ADD.
See the preview for the movie. Get excited about the movie. Then remember that movies are long—two plus hours long. And during that whole, long time you’re expected to sit still and be quiet. Realize there is no way that’s going to happen and put your $10 back in your pocket (or better yet, the bank…but not all in one bank if you happen to have more than $100,000 because man, I hear those things are dropping like flies).

3. Convince yourself that coffee tastes like dirt. (Because it does.)
No one likes to consume dirt (unless you have pica, and then, really, you should get that checked out, because consuming dirt is totally not normal). If coffee tastes like dirt to you, you will not buy it. You will not spend any money (no less $10,000) on coffee consumption. When that well-meaning but budget-busting co-worker stops in your office and asks if you want anything from the coffee shop, you can say no and really, honestly mean it. Because heck if you want to consume dirt, there’s plenty of it to be had for free (see backcountry).

4. Become allergic to shopping.
Imagine, for one moment, a mall: the crowds, the racks and racks of clothes none of which contain the right size, those horrific fluorescent lights, that loud music, the perfume stench of department stores, the cookie place that looks like it should be so tasty but really isn’t. Did you not just break out in hives thinking about it? Me, I almost needed an epi-pen. You, not so much? Well then, fine, go ahead and spend your money to look trendy and cool; I’ll just be thankful that I’m still the same size I was ten years ago…and that every now and again fashion comes full circle.

5. Have no real idea how much money you make.
Remember when you were sixteen and worked at the zoo and made $5.75 an hour? Convince yourself that that’s still the case. Remember when you took the time to figure out just how many hours you would have to work to pay for whatever it was you wanted: a new paint job on your rusty old car, a Wendy’s value meal, tickets to the Tori Amos concert? Do that again, but calculate everything as if you still only make $5.75. Decide then how much it’s worth to you. When you turn 100, go ahead and check your bank account. Do a happy dance when you find out you’re a millionaire. Then spend it all like there’s no tomorrow (because, come on, let’s face reality, at 100, there’s a fairly high chance that’s true).

Budgeting for Africa

This the third in our three part budget outline. See Part 1 – South America and Part 2 – Southeast Asia.

We’re currently planning on spending approximately three months working our way down the east coast of Africa, from Ethiopia south to South Africa.  This leg of the trip has been the most difficult to nail down a budget for.  There’s a couple of reasons for this. First, our sole experience in Africa has come from our amazing trip to Egypt in 2006. We found Egypt to be fantastically easy to navigate and very cheap, characteristics that do not seem to fit the rest of the east coast as well. The second is also entirely our fault, because it is the part of the trip furthest away. Therefore we’ve done the least planning for it, so we really don’t have a great idea of our must see places and our must do activities (more specific than … go on safari, and … see Victoria Falls, etc).

Among things that are not our fault, Africa has a less developed tourism infrastructure that well known backpacking destinations like Southeast Asia do. Overall, there seem to be two poles of tourism service, the “very low” and the “over the top”, but little of the happy medium for budget minded travelers like ourselves. This makes it difficult to predict how much we will spend on average. And finally, it seems there’s more variance between the countries we’ll be visiting than Southeast Asia or South America. But I won’t back down! We’ll give this a go.

Every Day Expenses

Food seems like it will be quite cheap on the whole, I think we’ll be quite comfortable assuming $10 a day. Accommodation seems as though it will vary quite a bit depending on what is available in a given area. I think $40 a day should be a comfortable number, we’ll be well under that enough that it will make up for the times we’ll pay substantially more. Transportation will be somewhat the same way, since while buses are cheap, they may not exist in some places we want to go and private transport or airplane is not cheap. I think we’ll be safe and budget $20 a day. For our daily activities then this comes to $70 a day.


This is also a very uncertainly defined area at the moment, there are a number of things we want to do, but they can also vary wildly in cost.

Gorilla Trekking $1000

Safari $2000

Climb Kilamanjaro $1500

Any number of other adventure outings requiring guides $priceless

Put this all together and we expect the costs for Africa to be quite substantial. 90 days at $70 a day comes out to $6300 and you add it our additional activities and the total balloons to ~$12000.

Now, as evident throughout this post, this part of our trip is thusf ar the most poorly planned and the most poorly researched. So there are bound to be inaccuracies in this, and we would love to have you correct them. Any experience in Africa? What were your expenses? How easily were you able to get around?


So to summarize our entire budget and come to one big number, our entire budget comes to $32000 for two people. This presumes our RTW flights are covered with frequent flier miles and is based off of daily projected costs in each area with costs for the additional activities we hope to do factored in as well. This number does not include pre-trip costs such as insurance, immunizations, moving, storage, gear, etc. We’ll address these issues and their costs as they come up.

Southeast Asia Budget

We were in the midst of outlining our budget for our trip in three parts (see Part 1 – South America) when a week-long vacation to South Carolina so rudely interrupted us. So now that life is back on its busy schedule, its time for us to finish the last two legs. Our second continental stop takes us to Southeast Asia, where we are planning on staying approximately three months. We’re breaking our trip down into two categories, every day expenses for our daily food, lodging and necessary transport and activities for all the crazy, unique things we will want to fill our time doing.

Every Day Expenses

The region is a backpacker haven for a region: it is cheap. Most of what we’ve read pegs decent budget hotel rooms at under $10-15, cheaper in some of the less developed nations. So as we’ve been trying to do, we’ll play it safe and budget $15 a day for hotel. Eating will also not tax our wallets. Street food can be found for less than $1, with restaurants slightly more. I’m not sure I’ll ever be motivated to cook on my own when I can get some fantastic noodles for less than a buck, so we won’t budget too much home cooking in. $10 a day should cover the occasional splurge. Since the region is fairly small, we will traveling primarily by bus, which is quite inexpensive. We will likely take a flight out to either Indonesia or the Philippines (help us decide), though even those seem relatively inexpensive at the moment due to heavy competition. $5 a day should do us handsomely. That brings us to $30 a day between the two of us.


Here’s the thing. There are actually very few special activities we want to do in Southeast Asia, at least ones we will have to arrange in advance and hire guides and shell out expensive fees for. Obviously we will go to Angkor Wat, but guides can be hired just for the day if desired and access to the park costs $20. To me, that seems to fit into the range of the general activities costs. Most of the other sights we want to see fall into this category*. So we will simply budget $10 a day for our activities and consider this done. If Angkor Wat is only $20, this should be plenty to cover our adventures.

So again, adding all of these expenses together, we plan on spending $40 a day for 90 days, or $3600. Now that I get here, I’m shocked at how little that is. I’m not as confident we’ll hit this budget as I am about our South American budget. But, I guess you can’t argue with math. As I said earlier, it’s a backpacker haven for a reason.

*There is one big activity that would blow our budget, though we have not yet officially decided on it yet. Theresa will have more on it soon.

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.


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.


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.

Straw Poll: How Much Does a RTW Trip Cost?

This is a quick one.

How much do you think it would cost to do a round the world trip for one year (if you stay out of Europe since that’s a money sinkhole these days)?

Respond with a number in the comments and any further details you feel like adding. We’ll follow this up with a post detailing our budget plans and how they align with how the rest of you think.