People always ask us how we could afford to take a year off and travel the world? Actually, by using some of the strategies below, our money went a lot further than we expected. Full disclosure, I tend to demand relatively high standards of living, so had we been able to tolerate 10-hour bus rides, sharing rooms with 10 strangers, and eating rice and beans most days, we could've cut our costs even further. Although it is hard to quantify, I think having $15,000 dollars saved per person or $20,000 per couple (including health insurance) can easily give you a year's worth of adventure that you'll never forget! Here is how we saved money throughout this past year:
1. Give up your expenses at home
Plan ahead to make sure you are not on the hook for rent, car payments, student loans, etc. If you own a property, see if renting it out could be a feasible option.
2. Start saving hotel points and airline miles.
We saved over $5,000 dollars on flights and hotels by collecting about 200k airline miles and about 300k hotel points. It may sound daunting to do, but it is totally possible with a handful of credit cards and about a year of planning. Having points saved up increased our budget by over 20%! Make sure to only use your valuable points in cities that tend to be more expensive.
3. Secure health and travel insurance
This was one of our biggest expenses during our year. Even basic government-issued health insurance in the United States costs a few hundred dollars a month. Almost all of them have good coverage for emergencies, so we took a risk with a high deductible, but made sure we were covered for anything really expensive. We also bought travel insurance for emergencies while abroad, which was only a few hundred dollars for the year. Budget: $3000 per person for the year.
4. Volunteer with programs that provide free housing (and sometimes food)
We used WorkAway to volunteer with different organizations for 3 months of our year. This gave us free housing and usually two meals a day. Most volunteer gigs ask for about 4-5 hours of work a day and then you are free to immerse yourself in your local surroundings. We really got to learn about the local culture, while meeting many new people through our volunteer work.
5. Plan to visit countries with a lower cost of living.
In general, we found that Asia, Africa, and Latin America were significantly cheaper to visit than the United States or Europe. By spending most of our time in Central and South America (Costa Rica being the exception, where prices are high), our money went much further. We spent as little as $1000 a month in Mexico and Colombia.
6. Choose Housing Diligently
We tried to use WorkAway in more expensive countries to avoid hotel or AirBnB costs and also stayed in some hostels (in private rooms).. We took advantage of AirBnB discounts for weekly or monthly rentals and used our points to splurge on any nicer hotels we wanted. Choosing lodging that includes a kitchen and/or free breakfast (and sometimes laundry!) was really important for our budget. Lastly, taking a year off also allowed us to see most of our friends and family around the world. Having gracious people to host us saved us over 50 nights of hotel costs while allowing us to spend time with people we cared about.
7. Cook more and eat out less
Groceries in many countries can be really affordable. By cooking most of your meals, you can save $100 a week, which can really start to add up!
8. Plan your destinations and flights in advance
This is the biggest challenge of a year of travel: Planning in advance can really save you money, but gives you less flexibility if you want to change your plans. By buying all of our tickets at least three weeks in advance, we were able to get good prices on our flights. We even bought some international tickets months in advance when we found a good deal. Having an outline of the countries you want to visit in advance can help dictate when to use miles and when to buy a ticket using your hard earned money!