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How To Budget A Backpacking Trip Around The World

This is the third part of my RTW series, written as I backpack around the world in 40 days. You can find the previous entries here: the intro to my RTW40 trip, and a piece on packing minimally. By the time you read this, I’ll be freshly landed in Iceland. Of all the countries on my trip (Iceland, Morocco, Dubai, Cambodia, Bali, and New Zealand) I’ll spend the most money in Iceland. Dubai might end up being a little more expensive on a per day basis, but I’m only going to spend a couple days there on a stopover.

Since Iceland is a first-world island country, it’s a little more expensive than your average European destination. New Zealand is also fairly expensive, but a little less so. If you’re breaking down your trip by daily costs, these places will wreak havoc on a slim budget, but it massively balances out when you add in the affordability of places like Morocco, Bali, and especially Cambodia.

I’ve traveled a variety of ways, and the truth is that you can make it happen on any budget. I’ve stayed at Hiltons, and I’ve stayed in African huts. Both are fun in their own way. My comfort level is at a middle ground, where you can have hot water, electricity, and a really good cooked breakfast.

Often, travel guides give you ephemeral numbers and “best guesses” for differing trips. That’s not very helpful. Real life is always different. So I’ll give you some real-world examples of a few actual trips I’ve taken, and then my daily budgets for all six of my upcoming destinations.

Actual Trip Budget Examples

Europe – $1800

I backpacked Europe in 2012 with two companions, for 20 days, for a total of $1,800. We basically flash-packed it. I’d been to Europe 4 or 5 times at that point, so I wasn’t interested in taking time or poking around. We flew into Dublin for $687 round-trip (crazy, right?), bought a $350 student Eurail pass, and took trains around 12 European countries. We roughed it in pretty cheap hostels and overnight trains, but did eat nice meals in every country.

Daily budget, minus flights: $55.65

Costa Rica – $408

I spent ten days in Costa Rica in 2014, solo backpacking up and down the Pacific Coast, for the amazingly low total of $408. I was able to pull this off for so cheap because I redeemed air of miles for the ticket, but a round-trip flight to Costa Rica can be had for under $500 anyway.

Daily budget, minus flights: $35.30

New Zealand – $3400

Last year, I traveled New Zealand solo for 15 days, for a total of $3,400. Backpacking is not the best way to describe the trip since I rented a car in Wellington and drove all over the South Island. New Zealand’s expensive, but still the best trip I’ve ever taken. It could have been done cheaper, but I splurged on a lot of stuff. I also took a ferry and took a flight back from Queenstown to Wellington. Worth it.

Daily budget, minus flights: $110

Travel is cheaper, the slower you go.

When budgeting, I usually break it down by category, then multiply by time spent. And this really depends upon the rate of travel. It gets cheaper the slower you go: when I was in the same place in Uganda for almost two months, the daily expense was almost negligible. I had a friend living in Thailand who paid $100 a month for a two-story cabin… on the beach. Accommodation, food, transportation, and activities are your basic givens. Add in some miscellaneous dollars just for kicks, because you’ll probably spend them.

Estimated Daily Budget for My RTW40 Trip

I’ve compiled some of the daily costs below. A really handy tool to use when calculating travel costs for specific destinations is Numbeo. Most of the prices there seem to be generally accurate, although from experience I always spend a bit more. These are my estimated numbers for my trip (I’ll let you know, once I get back, how close I was to my estimation):

Accommodation: $27 a night
Food: $30 a day
Transportation: $65 a day (I’m renting a car to drive the ring road)
Activities: $15 a day
Iceland total: $137/day

Accommodation: $18 a night
Food: $10 a day
Transportation: $15 a day
Activities: $10 a day
Morocco total: $53/day

Accommodation: $40 a night
Food: $30 a day
Transportation: $20 a day
Activities: $15 a day
Dubai total: $105/day

Accommodation: $12 a night
Food: $8 a day
Transportation: $7 a day
Activities: $8 a day
Cambodia total: $35/day

Accommodation: $12 a night
Food: $10 a day
Transportation: $10 a day
Activities: $5 a day
Bali total: $37/day

New Zealand
Accommodation: $20 a night
Food: $20 a day
Transportation: $55 a day
Activities: $10 a day
New Zealand total: $105/day

Traveling With Money

There’s a lot of misconceptions about traveling with money these days, and it mostly involves unfounded fears. First, the banking system in the rest of the world is not as primitive as you might think. I get better cell phone reception in Uganda with five bars of 3G, not to mention full access to their digital banking system (often rural Africans use mobile phone accounts to hold & transfer money…almost like using PayPal). You’ll be able to find an ATM in every country.

Credit & Debit Cards

A question I get asked a lot involves forms of payment. Here’s my advice, stemming from my experience traveling abroad: pay attention to the interbank network on the back of your card, not necessarily whether it’s a Visa or MasterCard. The interbank networks are shown as logos on the side of ATMs: you’ll recognize familiar names like Plus, Pulse, Interlink, Star, or Cirrus.

Some of these networks are multinational (Plus, owned by Visa, and Cirrus, owned by MasterCard) and you want to make sure that one of these is on your card. During a trip to India, for some reason the only network that worked for me was Cirrus. In other places, only Plus cards have worked.

Some credit and debit cards are great for international travel, and since there’s a limitless amount of banks and cards available to Western travelers, it’s best to just look at the details of your card and make sure of a few things: no international transaction fee, ATM fee rebates, and high cash withdrawal allowances.

Using Cash

Even in the states, I’m a fan of cash transactions. But step outside the Western world, and you can’t survive without cash. The boda-boda driver in Uganda isn’t going to accept your card, and sometimes neither is the hotel in Rajasthan.

Using the right bank card, you can actually withdraw cash in the local currency at the exact current exchange rate, with no fees. This lets you avoid the hustlers surrounding the airport charging large fees to change money.

Another note: money belts don’t really work. Pickpockets got wise to the existence of these things, and they can spot them as easily as they can spot a fat wallet in the seat of your pants. If you’re concerned about safety, it’s a better bet to stash cash in various places across your body: wear your wallet in your front pocket, keep a spare credit card in your pack, keep emergency cash hidden in a notebook.

Seasoned travelers recommend keeping a lot of emergency cash on you: as much as $1,000, if possible, in crisp USD notes. In the case that your cards stop working, you need enough to get you to the nearest urban center where you can either get home, or get your cards working again. You can even be held up at the border if a customs agent, having a particularly bad day, decides that you don’t have enough cash on hand to make it through the country by the time your visa expires.

Lifestyle and Travel Preferences

Note: you could do this for a whole lot cheaper, or a whole lot more. So much depends on your lifestyle and travel preferences: there are some things that you’ll never be okay with settling for that others wouldn’t bat an eye about. Fortunately, most adventurous types who are out on the road are comfortable somewhere in the wide band between poverty and hedonism. We prefer triple-ply over single-ply toilet paper, yet we don’t need to drop $300 a night at the club.

I’m a slight introvert, so one of the things I can’t always do is hostel dorms. Yes, they’re cheap, and I can usually go a couple of nights in a 12-bed, but I much rather prefer the 4-bed dorms. If I can have a room totally to myself once a week, that helps recharge my social stamina (a stat which rapidly depletes when surrounded by 11 smelly backpackers).

Still not sure how to get started? We’ve broken the travel budging process down into six steps. 

Do these costs line up with your travel experiences? Do you travel with a stricter around the world travel budget, or spend a little more? Do you have personal experiences that influence how you manage finances on the road?

Previous: How to Pack Minimally For An RTW Trip

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