Travelling around the world is a dream for many and it is stuff that you can wow you grandchildren with one day. However, budget and time constraints often put a halt to your ideal plans. The good news is with a little bit of planning and frugality, you can make a round-the-world trip attainable. Read further to get some realistic tips on how to save up money before and during travel and some valuable Do’s and Don’ts.
Step I: Planning your finances
A personally sponsored world tour is not a small thing in any way, be it in the money it requires or in the significance of its outcomes in your life. On average, a world-trip-on-a-budget costs anywhere between US$20,000 to US$30,000 for a year of travels depending on where you pick the majority of your destinations. This may seem like a big number, but if you’re not into financial planning, you probably wouldn’t realize that you would more or less spend the same amount per year just living where you are. So your first step is just that–financial planning.
Depending on your current financial status, you might need to save for a duration that may last anywhere from a year to up to several years to have that US$20,000 to US$30,000 in your hands. This is why you need to plan your finances way ahead of the actual travel.
You will need to be smart and save money as well as earn extra money to pay for the trip. Here are some simple tips for growing your savings and minimizing your spending.
1. Cut back on whatever you don’t need to live. That includes things like magazine subscriptions, cable television, nights out drinking and eating at restaurants, using the air-conditioner (use a fan instead), watching lots of movies at the cinema and other, expensive non-essentials. You will be surprised at how much money you can save just doing these things. You need to remember that living without glamour for a little while will let you live like a king later on.
2. Save up 50% or more of your earnings. If you are going to have enough money to go on your trips, your savings should equal or be more than your spending. If you are a spendthrift and find it hard to control your impulses to spend, then take out the money and put it in a different bank account that is set up just for your savings. In some countries, the option to auto-transfer your monthly earnings from your bank account to another savings account is available. If it’s available to you, use it. Don’t forget, the more savings you have, the more interest you earn!
3. Credit cards are complicated. Credit cards charge you unnecessary interest, and their very presence often is an excuse to spend, spend, spend. However, some credit cards offer you flyer miles, so do your research and you may be able to save big on airfare in the future.
4. Make use of your time. For those who work office hours, there are several hours after work that you can use for freelancing, if you have certain skills. Instead of wasting away time and money drinking with your colleagues, use that time to earn some money. Whether it’s writing, web design, child care, house sitting or consulting, there is always something you can do to make an extra couple of hundred bucks a month.
5. Make use of your assets. If you are a collector and have items that you can sell, now’s the time to sell. Yes, it may be saddening, but the experience and insight you get while travelling is something even a prized collection cannot offer. If you have two cars and only use one, you could probably sell the other one you don’t really use. Prioritize making money for your trip above all else.
6. Invest. If you’re not financially sound enough to take your world trip within the next few years, you could look at some short term investment plans. Putting your money in the bank may not necessarily be the best idea if you’re looking for high returns, though it may look the safest. Look at shares, mutual funds or even investment through insurance products such as ULIPs that have a short term. At the risk of sounding like one of those commercials, it has to be said that these investment ideas are subject to market risks and need to be done after consulting experts.
7. Meet a financial planner. It’s always a good idea to make an appointment with a financial planner and tell them about your needs. They will do a need analysis and factor in your current savings, your projected income, the money you’ll need for the trip, the money you’ll need for your other commitments in life and then differentiate your perceived needs from your real needs and suggest the best path. This is the step where you might find out the shocking truth it might not be the best idea to eye for that world trip in your current situation. For instance if you’re a parent of two kids and that world trip might jeopardize your children’s education, it’s information you should get now–rather than later.
Step II: Planning Your Travels
Alright, now you have the money to actually pull it off. What next? It’s time to sit down, research and plan things out. Of course, even in this area you can do several things to cut costs and still have a good journey.
1. Plan your itinerary. It’s important to write down where you want to go and be realistic with your expectations. If you have a very small budget, covering key parts of Asia and Africa is more doable than planning to travel mostly to North America, Europe or the Caribbean, as those places need you to spend a lot of money just for lodging, food and other basic things. For a short trip of about 6 months, covering 9 to 12 countries is perfectly feasible.
2. Find travel buddies. It is not advisable to travel alone on such long trips both for the sake of your safety and also for the sake of your budget. It is best to travel in a group of 3-5 members. Get in touch with your old college buddies if you don’t have any trustworthy or fun friends at the job you’re in or in your neighborhood. If nothing works out, you could find friends over the internet, get to know them and travel with them although you need to be careful about the abundance of scammers and thieves looking for fresh people to rip off on the internet. And if nothing works out, look no further than home. Taking your parents or siblings along with you can be vastly rewarding as well. If you’re married or in a relationship, your significant other would be another no-brainer; you’ll learn a lot about somebody on a sixth-month trip!
3. Book budget airlines wherever possible. Budget airline companies are no longer rare today, and it’s time to make use of them. For example, if you are travelling around Asia, flying with AirAsia will probably save you 50% to 70% compared to if you fly with a full-fare airline. If you have to fly budget all the way, do it! You can use the saved money for other things. It’s also good to research when ticket prices are low for a certain country (especially for domestic flights). Booking way in advance isn’t always the best way to score cheap tickets in some places. Of course when you’re traveling domestically in countries with extensive rail networks, it is better to use rail both to minimize costs and also for seeing the landscape and meeting new people.
4. Book hostels and dormitories instead of hotels. This is for obvious reasons, as hotels charge way more for accommodation. Not only that, hostels and dorms are a great way to meet other travelers without blowing your budget by going to bars and clubs to meet people. If you plan on spending a lot of time in a particular place (more than 2 weeks), using a home exchange or hospitality exchange service may also help you cut cost on accommodation.
5. Paid tours cost a lot, so avoid them wherever you can. There is always a way to see places without a tour guide or going on a paid tour. Google the places you want to visit and see what others say about travelling cheaply in that place. Plan your trip accordingly and be sure to prepare whatever necessary (e.g. translation books, proper clothing).
6. Find local buddies. There are websites such as interpals.net and others that you can use to not only find travel buddies or friends but also people who might be interested in assisting you in the country you will be arriving in. Of course, they’d only be as willing to help you out as you or someone else in your country would be willing to help foreigners out in their travels to your country. So it is best to not have high expectations about how much help you can get from them, although you may get lucky. It is also advisable to get to know that person well before you commit to go there and meet him/her and always meet in a safe, public place.
7. Paperwork. Last but not least, you need to do extensive coordination and paperwork if you’re going to go on a world trip. This pre-travel planning includes procurement of VISA documents for all of the countries you’ll be traveling to.
Step III: During Your Trip
So you’ve planned everything out, and now you are finally on your dream trip! Just practice the tips below to stick to your budget and save cash.
1. Save up on transportation. Saving on transportation can easily be done by using bicycles and public transport to move around, instead of taxis and tour buses. Sometimes, public transport costs only about 10% of what using a taxi costs! Be smart and get educated on how to get your places of interest as cheaply as possible. Of course, walking to nearby places is highly recommended.
2. Eat at the places locals eat, as opposed to expensive restaurants or fast food outlets.The cuisine of a place is part of its charm, so eat what the locals eat. In most cases, the local food is many times cheaper than international restaurants.
3. Socialize in settings that don’t cost much money. Instead of spending money at a bar or club, go to a public park or mall to meet the local people and communicate with them. You may even make a few friends who can show you the cheapest ways to travel through the country!
4. Beware of thieves! If you’re traveling in a developing country or an underdeveloped country, you might want to stick closer to your group and stick even closer to your wallets. Be careful even when you’re using taxis or talking to people who claim to be guides. The excessively friendly con-artists may not look like they’d ask for much but when they’re done doing their thing, they might threaten you or demand you pay an exorbitant amount of money, so it is best to not entertain them in the first place. It is best to buy safety locks for your luggage and also keep your documents with you at all times or have them locked up in a safe place.
Step IV: DO NOT go on a world trip if…
1. You have children/dependents that need your constant assistance – It is unfair to be selfish and neglect your basic responsibilities towards your family. However if you can arrange for some of your trustworthy friends/relatives to take care of your dependents/children and, say, your children are older and will be fine under these circumstances, then you are free to go.
2. You cannot get holidays at your existing job for the period of the trip or get a new job when you return – If the trip is going to lead to a ruined life when you return from it, then it is best to hold off. However if you’re an entrepreneur or if you’re looking forward to quitting your current job and starting a new business, or if you’ve just graduated or don’t have a job as of now for some other reason, this is the perfect time to go.
We hope this guide will help you to get a good idea about what you need to think about if you’re planning that once-in-a-lifetime trip. Good luck and most importantly, have a safe journey!