Saving to go Around the World (or on any other trip)

How much should you save?

One of the most common questions I get when I return back to reality from my travels is "how do you afford to travel so much?" My responses at home usually revolve around budgeting, priorities, and travel habits. Now that I'm on the road full-time and don't have a steady job, my answer is much, much simpler: I saved a

bunch of money before I left.

How much did I save? A lot. I'll leave it at that. The real question is, "how much should YOU save?" That's the answer that really matters. Generically, "a lot" still applies, but that doesn't exactly help you much.

It really depends on what your daily budget is going to be (check out this post for more on budgeting). At a surface level, how much you need is simple: daily budget x number of days you will be on the road = how much you need to save. Probably 90% of your funds will go towards your daily budget. Add in some buffer for flights, visas, and random experiences, and you should be set (a scary number to throw out there is a few thousand extra dollars, but it is really up to you).

As a reference, my savings for the around-the-world trip, when based solely on my daily budget, is just shy of $30,000. You definitely DO NOT need that much! I have set my budget to be constant regardless of which country I am in, which means it can be painful at times in Western Europe, but it goes a REALLY LONG WAY in North Africa and Southeast Asia. Keep in mind that you probably won't be working if you are going around the world, so living off $30,000 a year really doesn't sound too bad.

How to Build Your Travel Fund

If living on $30,000 a year while not working sounds a bit daunting, saving that much to do so can be downright scary when you are getting started (remember: you DO NOT NEED that much if you travel in cheaper areas!).

Building your travel fund is, conceptually, quite simple. You need to allocate a given amount of money to a dedicated fund that you won't touch until you hit the road.

But that ignores reality. You have bills, groceries, random car maintenance, fuel costs, insurance, and more to pay for every month. When you first start looking at your monthly budget, you will probably think that there is no way you will be able to save enough to take an extended trip around the world.

Not with that attitude.

The fact is anything worth doing takes extra effort. You will probably need to get a second, part-time job to really kick off your savings. Luckily, there are plenty of options in today's economy. You don't need to be a "whopper flopper" making minimum wage to bring in some extra cash. A few part-time gigs you can go for are:

- Server/bartender (you can make bank in tips!)

- Substitute teacher (if you have days off during the week)

- Tutor

- Pizza delivery

- Drive for Uber, Lyft, Cabify, Bolt, and others

- Video editor (if you are artistically inclined, plenty of YouTubers are looking for editing help)

- TSA security at the airport (if you're in the United States)

If you are willing to give up a few evenings a week or your weekends every now and then, bringing in extra cash, and a lot of it, to fund your travels can be pretty easy.

Make Saving a Priority

Life is all about choices. What you want to spend your money on, you will. If you find yourself with an extra job and still not saving enough, chances are your problem isn't money but your priorities are out of order.

When you make your budget every month, you need to set how much you are going to allocate to your travel fund and then not touch it. This comes after all of your normal costs are covered: food, water, shelter, utilities, insurance, clothing, car payments, emergency fund, investments, etc. Once all of these are covered, then you can see how much you can save. If you try to determine your travel funds before all the rest of your bills are covered, you will end up dipping into them to cover unexpected or under-budgeted costs constantly.

On the other side of the equation is your optional extras once all of your bills are paid. It is tempting to go out partying every weekend, eat out five times a week, get coffee twice a day, and spend money on hobbies. These things in and of themselves are perfectly fine...if they are your financial priority. If you decide funding your travels is a financial priority, then these other things may need to fall off. I don't mean to sound like your mom here, but you have food, coffee, alcohol, and movies at home.

Don't Forget about Hidden, Sunk, and Emergency Costs

Your budget is great and all, but it can really get blown out of the water if you don't think about other factors ahead of time. Are you really going to factor in that 200 Euro plane ticket into your daily budget? You could, but that would mean really tightening down. Same goes for that 700 USD Inca Trail hike, entry and exit visas, and an emergency trip to the pharmacy when you had the wrong food at dinner last night.

You need to build in a buffer for these costs:

- Hidden: Things you didn't know you were going to have to pay for, like that carry-on bag on a budget airline flight or a visa because the local laws changed

- Sunk: Costs for things that you know you are going to end up paying for anyways, are already obligated to pay for, and don't want to think about in terms of your daily budget (for the economists out there, yes, I know that is stretching the definition a bit; it's the concept that matters)

- Emergency: The label says it all; what constitutes an emergency is up to you, but it can range from a family illness to the outbreak of conflict

The good news is that if you have a budget at home, bring in extra money for your travel fund, and have your priorities straight, saving for these extra expenses will be a breeze.

Saving for Shorter Trips

Not all of us can quit our job to leave it all behind for an extended or undetermined amount of time. Maybe you have a hot-button career, family, or obligations that keep you at home. That doesn't mean you can't afford to travel! You just have to take shorter trips and be a bit more deliberate in your planning.

In principle, all of the above tips apply to taking shorter trips. You need a budget, an income, and money priorities to keep up your travel life. The difference is you will have more costs per trip than someone who is gone for an extended amount of time. You will be booking round-trip tickets instead of open-ended one-way tickets. You will (in all likelihood) planning more activities to make the most of your short stay than someone who has nothing but time on their hands.

This doesn't necessarily mean you need more money. You just have to be more deliberate with how you travel. Just like a round-the-world traveler needs a daily budget, you need a per-trip budget. You decide how much you want to spend on each trip, divide your travel fund by that number, and that tells you how many trips you can afford to go on. The less you spend, the more trips you can take. This is more feasible in some places than others, especially when you start talking the cost of round-trip international tickets.

Parting Thoughts

Saving money is probably the most stressful and arduous part of traveling. You save your money by spending your time building your travel fund. The good news is that there is a tangible reward at the end, and it is in sight. You don't need a six-figure job, generational wealth, or a fancy investment strategy to afford making your travel wishes a reality. With a budget, an extra source of income (part-time!), and the right priorities, you will be gallivanting across the world in no time, making friends and amazing memories along the way.