Estimating your real travel costs is an important thing to do, especially if you are travelling on a tight budget and don’t want your expenses to exceed your available funds. We try to estimate the real cost of our trips in order to set goals for our expenses, particularly lodging and food, and also to help plan our destinations and how long we will stay in each place.
Estimate your Travel Cost of Living
Estimating the actual cost of living while you travel can be tricky. First you need to get good information about the relative cost of living (COL) in your proposed destination(s). I mentioned in another article that we use expatistan.com and numbeo.com to get a rough idea of the COL in various destination cities compared to our home city. We also use Google to find blogs written by expats living in our destination cities. Often these blogs include posts about the local cost of living which are useful. In addition, we check out apartment rental prices using the various online vacation rental sites, like airbnb.com , vrbo.com, homeway.com, craigslist.org, etc. This gives us a good idea of one of our biggest costs…lodging. We look online for information about local restaurants and look up menus to see what they charge. From that information we prepare a monthly budget for the destination country. We add in airfares, local transportation costs, visa costs (if any), and costs for any special activities we plan to pursue while there, such as language lessons or guided tours.
Estimate Your Home Budget While Away
Next we look at our home budget. Since we are keeping our home in the US and not currently renting it out to anyone, we have the additional cost of maintaining and securing it while we are gone. So we budget for all the monthly costs for maintaining our home, including property taxes and insurance, minimal electricity to keep the home temperature high enough to avoid mold, piano damage, etc., water and sewer costs, security system costs, cost for internet and phones, costs for maintaining comprehensive insurance (only) on our cars, medical insurance, storage unit rental, etc.
We have a reasonably accurate budget for what our cost of living is when we are living full-time in our home in Portland. Subtracting the maintenance-level budget from our full-time budget gives us the amount we can spend on our trip without increasing our overall living costs. By reducing our utilities usage down to the minimum, suspending garbage, putting a lock on our water meter, reducing our auto insurance down to only comprehensive coverage on our cars, and having no gas costs for our cars we reduce our average monthly fixed costs by enough to pay for our monthly apartment rental in many low cost countries. We still have additional costs for local transportation, travel insurance, security monitoring, and eating out more frequently while traveling, but these costs are largely compensated for by lower costs for food and entertainment in a cheaper country.
Look at Other Ways to Cover or Reduce Costs
We normally use airline miles for our airfares, so our travel cost to and from the destination country is usually zero. Look into increasing your frequent flyer miles by wisely managing airline credit cards. If we choose a low cost destination we can travel without spending much more money each month than if we stayed home. If we were in a situation where we needed to save additional money we could pursue the option of renting or subletting our house. We could easily get $1300+ per month for our place, and, since the renter would be paying for utilities and occupying the home (i.e. no need for a security system), this would give us an additional income of $1000+ per month after we pay property taxes and insurance. But this option would require that we do a lot of things to prepare our home for subletting that we aren’t interested in doing at this time. If we were planning to be gone for more than six months at a time we might consider this option, however.
Your basic costs may be quite different from ours, so you should go through this exercise yourself. If you are on a very low income and are renting and plan to travel for a longer time frame you may be able to simply pay $50-100 per month to store your stuff in a storage unit and give up your apartment while you are away. If you are still paying a mortgage payment you would definitely want to consider subletting your home to cover the mortgage costs. It all depends on how much income you have to work with and what your ties are to your home country. Often the stories I hear about from people who are trying to create a better lifestyle on very little income involve them moving permanently (or at least for a year or more) to a much lower COL country. That allows them to give up all costs of maintaining a presence in their home country, which is always an additional monetary burden.
Look For Cost Savings in Your Budget
Another thing that preparing budgets does for you is to highlight items which are costing you a lot of money even when you aren’t using them. For example, in the our budget, we noticed we are spending over $1100 for six months of cell phone service which is providing no service to Ger and me while traveling outside the US. This is because we have a family plan which we share with ourselves and our two daughters to keep all our overall cell phone costs low while still having a lot of data usage available. With our increased absences from the US, it might be more cost effective in the long run for us to switch to a pay-as-you-go plan.