How do you budget for long term family travel? I have been asked a number of times what our budget is for our year long trip. 12 months away is a long time but there is no easy answer to this question.
There are so many variables and everyone travels differently. It depends on the countries you are visiting, the type of accommodation you book, the places you eat, how much sightseeing you pay for, how frequently you move and of course how many kids you have and how old they are!
The final travel costs will be different for every family but the process to get to that number is the same. Outlined below is the process we went through to prepare our budget for 12 months away.
Do your research
I wanted to understand the likely cost before we set off on our adventure however I found it difficult to find detailed budget information for long term family travel. While I found quite a few sites with detailed costs for singles or couples, the information for family travel was harder to find. Matt and I backpacked (pre-kids) in both Europe and South America and could travel very cheaply. With the kids we will need to travel differently, particularly the types of accommodation and activities we choose and the way we travel from place to place.
I spent a lot of time researching budgets and what I discovered is a HUGE range. Some families are able to travel on less than US$50 per day. Others spent in excess of US$250. I figured we would be somewhere in the middle. We aren’t ultra budget travellers but we are not luxury travellers either. I also found a widely varying list of what was included in family budgets (and what wasn’t). Some families excluded their flights or special activities from their reported costs. Others had significant periods of free accommodation staying with friends. This made it really tricky to work out what the actual costs would be for long term family travel.
After many hours pouring over spreadsheets, blogs, guidebooks and websites such as www.budgetyourtrip.com we came to a high level estimate. To do this you really need to know the countries/regions you want to visit, how long you plan to go for and the style of travel you are used to.
Break it down
With this high level estimate we created a budget broken down into 6 key groups. We intend to track and report our spending against these groups as we travel. The reason I want to track our costs is I want our trip to last the full 12 months and this is unfamiliar territory! I think it will take us a while to get better at finding the cheap accommodation and knowing the best time to book cheap flights. I am hoping our budget covers all possibilities, but also secretly hope I have overestimated how much we will need!
Our budget is higher than some others due to a number of factors. We will probably spend more time in expensive places such as Europe, Africa and USA and less time in SE Asia and no time in South America. Why? Simply because Matt and I travelled extensively in South America many years ago and SE Asia is on our doorstep for future family holidays. We want to spend time in the places we don’t think we will get back to in a while. We don’t want to be spending all our time in hostels and won’t be travelling super slow which will mean higher accommodation and transport costs.
How to track costs against your budget
We created the high level budget in an Excel spreadsheet and will be using an android mobile app, Trabee Pocket, to track our costs within each country. This app allows us to set up a budget for each country, enter costs in the local currency and will tell me how much budget we have left at any point in time (by day or by country). I don’t find this difficult as I have my mobile with me and the app doesn’t require an internet connection. The downside is that the app stores information locally so regular backups will be required. We will reconcile our costs regularly to ensure we are staying on track. For those of you with an iPhone I really liked using the TrailWallet app. For Trabee Pocket I recommend paying for the upgraded version, which allows extracts to excel and customisation of categories.
Our budget for the year
Our high level budget broken down into categories and budgets (in AUD) is:
- Daily budget – $70,000 ($200 per day)
- Flights – $13,500
- Special Activities – $13,500
- Travel Insurance – $1,500
- Vaccinations – $1,500
- Total estimated cost for 12 months away: $100,000 (AUD)
Outlined below is an explanation of what is included in each budget category.
Daily budget – AUD$70,000 / USD$53,000
We have estimated an average of AUD$200 per day (USD$150) for the year. This needs to cover all in-country daily costs including accommodation, visas, in-country transport, food, drinks, medicine/toiletries, sightseeing, telecommunication and souvenirs. The daily budget has been broken down into individual country budgets. Some countries we expect to spend more (like Japan, Western Europe), others a lot less (India, SE Asia).
Flights – AUD$13,500 / USD$10,300
We have a standalone budget for flights. We decided against buying an around the world ticket as we hadn’t done enough work on the itinerary and didn’t want to be locked into going anywhere. So we will buy tickets as we go. To work out a high level budget we used a number of apps such as Google flights, Skyscanner and Momondo to estimate the cost of each leg we are most likely to take. Where we take an alternate transport method (such as a cruise or a train) between countries, this budget will cover those costs. I am hoping we don’t need all of this budget.
Special Activities – AUD$15,000 / USD$11,500
Who wants to take a year off to travel the world and not have the funds to splurge occasionally? We have a special budget for those one-off costly activities that we don’t want to miss out on. Whether it be a music festival, skiing, African safari, diving or hot air ballooning we want to be able to pay for these without killing our daily budget. This budget will also most likely cover special occasions such as birthdays and Christmas. I am hoping we won’t spend all of this budget either.
Travel Insurance – AUD$1,500 / USD$1,100
Absolutely essential and managed in a separate budget item so we aren’t tempted to spend it. We are using complimentary credit card travel insurance for the first 6 months of our trip by purchasing our flights on the credit card. Check with your credit card provider to see whether they offer travel insurance and what it covers. Level of cover does vary enormously so check the details carefully. We plan to sign up with World Nomads for the second half of the year. At the time of writing they allow you to extend/modify your insurance while you are away which is very important for us as we won’t be home for a while and don’t have a fixed itinerary. Travel insurance is also essential for anyone applying for a schengen visa in Europe.
Vaccinations – AUD$1,500 / USD$1,100
This cost was a bit of a shock to us as we already had a number of vaccinations done in the past. Unfortunately our health insurance didn’t cover these, but some do – so check with your provider. The vaccinations you need will depend on where you are travelling and what level of risk you are prepared to take.
Pre-trip purchases – This cost will be different for everyone, but needs to be considered when you are gearing up for your trip. We absorbed a lot of these costs in the months leading up to the trip while we were still working. For us it included 3 new backpacks, a new camera, laptop, some clothing and various electronics to allow us to be fully mobile.
Home costs – The cost of putting your life on hold while you are away! For us this includes storage fees for our household contents, home and tenant insurances, app subscriptions for things we use regularly such as Evernote and Spotify and agent fees to manage our property while we are away. These costs will be offset by the rental revenue we will receive for our family home.
I think that covers it! As we travel we will report back on our actual costs by country and category. Creating a budget for long term family travel takes some time, but it is time well spent as preparing this budget has given me a greater level of confidence that we can manage the costs throughout the year. It also gives us a baseline to track against and allows us to make adjustments as we go if required.
If you are considering a longer trip and looking for ideas on how to save more money for travel, this list is full of great suggestions to get started.