When we tell people that we’ve dedicated the next year of our lives to traveling around the world, the first thing they usually ask is “How can you afford such a trip?” We’ve even had one family come to the conclusion that we must be millionaires in order to accomplish such an extensive journey. I assure you, though, that we are not millionaires. Not even close. In fact, we are pretty average in that we have had debt, we have a modest savings, and we have jobs.
For two years we knew that we wanted to travel for twelve months so we spent that time planning and preparing. The first thing we realized was that we wanted to actually enjoy our time traveling, and in order to do this with a baby we knew we needed to take it slow. We decided that the best way for us would be to live in a central location with easy access to public transportation and decent internet and experience what it’s like to really live in a different place–hence why we’re staying in each country for a month.
Here’s what we did to fund our trip:
1. Get Out of Debt
We were college students, newlyweds, and poor. We started off our marriage with a fairly small school loan and kept our debt at that for almost two years until we decided to try our hand at airline mileage points. We swiped our credit card a few too many times and ended up way over our heads in debt. The good news is we got the airline mileage sign-up bonus with our credit card! We’ve learned a lot since then and have perfected our process of accruing airline mileage points.
After creating a very strict budget we were able to pay off all our debt and have a surplus in savings in just 8 months. Here are some previous posts about our experience with debt:
2. Save for the Trip
When Scott and I first decided to take a year and travel we thought it was just going to be the two of us. We experienced two miscarriages and didn’t know if we’d be able to start our family as soon as we would have liked. Instead of waiting around, we decided to do something that we love–Travel! It was at that time, in 2012, that we reevaluated everything about our future and made a goal to save $20,000 for our trip.
A year later, and totally out of the blue, we found out we were pregnant, and this time it was going to last! We knew that even though our lives were going to change forever as we welcomed a human being into the world we still wanted to travel. The baby obviously changed how much money we needed to save for the trip and it seemed like an impossible amount to reach in the given time. Instead of putting off the trip until we could save enough money, we decided that we would depend on Scott working part time while we were traveling.
So we saved up our money to buy gear (computers, camera, backpacks, etc) before we left and we paid for flights and apartments (through airbnb.com) for the first three months. Our goal was to be planned and booked that far in advance, depending on availability.
3. Airline Mileage Points
Airline mileage points are pretty much the main reason this trip is possible for us. We have at least 23 flights that we’re taking this year and we’re only paying about $4,000. Yep, that’s right. My comma is in the right spot, and no I’m not missing a zero. Two adults and a baby are flying all over the world for just that much, including two business class flights. Here is an amazingly intuitive post by Scott with more details and instructions on how we got enough airline mileage points.
4. Budget the Trip
Our first goal in budgeting for the trip was to follow Nomadic Matt’s guidelines on “How to Travel the World on $50 a Day”, but we realized that for our situation that was a pretty low amount. After a TON of number crunching, we decided that if we could just live within the same monthly limit we had while in the states while traveling around, then we’d be good. Here’s the budget we’ve currently set for ourselves:
- Rent: $900
- Groceries: $200
- Entertainment: $200
- Health Insurance: $100
- Phone Bill: $40
- Transportation: $400
- Miscellaneous: $200
We realized that some countries will be a little more expensive than the States and others will be a little less expensive, so as long as we can maintain a monthly average of about $2000 USD we’ll have more than enough. This fluctuation in cost of living between countries requires us to constantly be checking our income and expenses, which is great practice in general.
As you can see, you don’t have to be a millionaire to travel. We’ve gotten ourselves out of all debt, scrimped and saved for two years (and eliminated all financial obligations in the States), learned how to take advantage of airline mileage points, and budgeted out the next year of our lives month by month. We’re not about to say it’s easy work, but to us it’s a small price to experience the world.