Budgeting for a Round the World Trip is no easy task. It requires a lot of thinking and planning and also more thinking as plans evolve and the list of countries you want to visit gets bigger or smaller.
It's not easy to estimate the cost of a several-months-long trip on your own. In this article, we help you ask yourselves the right questions to budget precisely by taking into account the main parameters that impact your expenses: travel duration, countries visited, transportation, accommodation, equipment, insurance, visas, vaccines, etc.
In-travel expenses make up with no surprise the largest part of the budget for a round the world trip, about two-thirds on average. Plane tickets and other transportation costs represent about one-fifth of the total cost. The rest of the expenses mainly consist of food, accommodation, equipment, insurance, visas, and vaccines.
When planning a budget for a round-the-world trip, here is a non exhaustive list of questions you need to ask yourself:
1 | How long do I want to travel for?
The duration of the trip has the most significant influence on the total travel budget. Fixed costs (equipment, vaccines, etc.) represent a very small portion of the total cost of a round-the-world trip when variable costs such as plane tickets, local transportation, accommodation, food, activities, travel insurance, visas, etc. weigh much more and are proportional to the trip's length. However, the longer the trip, the longer the stay in each country, which can reduce the on-site budget.
Depending on your total budget and the type of countries you would like to visit, you can play with the length of your travel to make sure that you do not end up having to go home mid way because your pockets ran empty (it happens more often than we think).
2 | Do I want to travel alone or with others?
Traveling alone, as a couple, with friend(s) or as a family, the options are endless but how does this decision affect your budget?
Traveling alone is the ultimate image of the young
Traveling with others allows you to cut many costs in half: rooms, taxis, hiking guides, etc.
Very often solo travelers might pay alone for a room which contains two single beds or a double bed but no panic, if you're traveling alone, you'll often meet other solo travelers who are also looking to save money by sharing a room. It’s also a good way to make travel buddies.
If you travel as a family, you will probably be able to save at scale: children eat less and can sleep in their parents' room and in many countries children do not pay for transportation or much less than adults.
3 | What are my bucket list travel destinations, and what is the cost of living in each?
THE LIST
The list of countries you wish to visit and you will not compromise on has a massive impact on the end budget you should work with. For instance, if you have Australia, New Zealand, French Polynesia, the U.S. and Canada on your list of must do during your RTW trip your budget will have to be much higher even when you backpack than if your bucket list is made of India, Vietnam, Peru, Guatemala and Egypt.
To illustrate with numbers, the average daily budget among the most visited countries by world travelers ranges from as little as €18 per day in India to €71 per day in Polynesia for backpackers / budget travel. If your bank account isn't very full, the best way to travel for a long time is to stay as much as possible in inexpensive countries in South East Asia, Latin America or Southern and Eastern Europe.
What we decided to do is to Balance out Expensive countries with inexpensive ones and to not stay more than 20 something days in more expansive countries with the exception of New Zealand where we will stay 4 weeks.
We also set a rule that we would travel extra cheap in 'expensive' countries and with more comfort in cheaper countries. We also did not include Western and Northern Europe, Australia, the U.S. and French Polynesia to our list to be able to focus on New Zealand.
THE RYTHM
Preparing for a RTW trip is a bit like eating at an all-you-can-eat buffet: you don't want to miss anything and you often tend to want to visit too many countries. Once you're on the road, however, you'll quickly realize that during a long trip you don't have the same rhythm as on classic vacations.
It is therefore advised not to be too greedy for your itinerary and plan some buffer time where you can just do nothing. Traveling slowly also allows you to considerably limit the costs of buses and other local transport or even to negotiate a good price for accommodation.
4 | What travel style do I want for transportation, food and accommodation?
The way you want to travel: budget, mid-range, luxury will impact heavily your costs and your total budget for the time period you've set with section 1. Travelling for a long time is unfortunately not as glamourous as when you go on your usual holidays 3 to 5 times a year.
Two expenses where you can really drive your costs up or down are food and accommodation. If your plan is to have your meals at the restaurant twice a day you will probably end up spending at least a 33% more per day then someone mixing restaurant and grocery shopping at the local store or market.
Same goes for accommodation, if you want to always be in the best location with the nicest rooms your budget will explode very quickly especially if you travel alone and do not want to use shared rooms in hostels from time to time.
In my opinion it's all about balance, finding what works for you or your group, what you are willing to compromise on and what is a no go. Personally, my top 2 requirements are location and cleanliness, it is up to you to decide what matters most and to be more flexible on what does not matter as much.
5 | What kind of coverage and insurance do I need / want?
Depending on your answer to the 4 questions above, you will have to determine which insurance you need as a baseline and which add-ons you will want depending on your travel style, your age, your current health, the country you come from, the insurance and credit cards you already have.
The price of your insurance is affected by the duration of your trip but also the countries you want to visit. Medical care being extremely expensive in the United States and Canada, many travel insurance companies charge a higher rate for the entire duration of the trip if you pass through one of these countries.
Most insurance plans have a fixed monthly rate, regardless of the length of your trip. However, some contracts offer decreasing prices so the longer you travel, the less you pay per month.
Credit cards like Amex, Visa or even Revolut include insurance for the first three months of travel. Some round the world travelers therefore choose to only take out insurance from the fourth month.
