The Three Best Travel Budget Lessons I Learned on the Road

I Traveled Around the World for a Year. Here’s What I Learned About Personal Finance

Use these budgeting tips to help you save "moher." Ha!

Travel is fun and exciting. Keeping a personal budget is neither of these things. But through my travels around the world over the last nine months, I’ve learned several personal finance lessons that I’ll be taking back home with me. Here are the three best lessons I’ve learned that will help make me more profitable at home. Perhaps they can help you as well.

1. Simplify — Get Those Budget Goals Down to One-Day Total

Every personal finance article, book and self-help guru has the same message about goal-setting: make sure you set achievable and measurable goals for your personal finance plan. That’s great advice, and it should definitely be a first step in your budgeting plan — your goals should be quantifiable so you know when you’re meeting your objectives, and they should be realistically achievable so you can score some early wins to keep you motivated and on track.

But it’s important to also take an extra step to make sure those goals are as simple as possible to remember and track. By doing this, when you’re back in the hubbub of your daily routine you’ll be able to quickly know when you’re heading in the right financial direction or when you’ve steered off your budgeting itinerary.

In planning our one-year trip around the world, we looked at all our projected expenses for every aspect of the trip from the past year to help determine how much those would change on the road. Because my wife and I had already been budgeting for all our costs, including food, lodging, health care, entertainment, and even laundry expenses, I was able to add all those up to determine how much the total cost would be to see if we could afford the trip. Developing a budget for the entire trip was critical in helping us determine that we could, in fact, afford to make the trip by using money we’d been saving. But that total year figure was basically useless for our day-to-day spending decisions of whether we could afford a hotel room or a meal while traveling.

Instead, I determined a daily budget for the two largest expenses for the trip that would keep us under our overall budget. Daily lodging costs over six continents needed to average $150 per night. Food costs (restaurants, groceries, bar tabs, coffee shops, etc.) needed to average $60 total per day for both of us.

With these figures, I could use our budget on the go as we were making spending decisions. As we’re booking our lodging for our stop in the next country, should we get that nicer hotel room? As long as it’s under our $150 budget level, the answer was yes. As we’re reading a menu outside a restaurant, should we step inside? Not if the entrees look like we’d go over our $60 per day budget (with a few exceptions).

By arming ourselves with these simple daily budgets we were able to ensure that our budgeting behavior on the go aligned with our earnest intentions at the beginning of the trip. So far it’s worked very well. Over the nearly 300 days of meals so far, our average spending has been under budget at about $42 per day. Our average spending so far on hotel rooms has averaged $100 per day. We're significantly under budget for these two big expenses because we used daily budget figures to help us easily determine if our spending decisions were within our overall plan.

This can work for your home budget too. Determine your two or three biggest expenses, which for many people are lodging and food. Unlike travelers, your lodging costs are fixed over long periods via your rental agreement or your mortgage. And it’s a big decision to adjust this number by deciding you should move into a smaller home to save money, which is unlikely to happen (but it’s worth a consideration if you think you could or should be living smaller).

But your food spending decisions can change today, so determine what you’re spending, what you want to spend, and set a daily goal that can help you ask yourself the right questions at a restaurant (“will going to this restaurant put us over our daily budget of ‘X dollars’ today?”) or the grocery store (“will this shopping cart of groceries put us over our weekly budget of ‘X dollars’ times 7 for this week?”).

2. Make Sure Everyone is Rowing in the Same Direction

Budgeting goals are like rowing a boat — everyone has to be on board and rowing in the same direction, or you’ll just end up going around in circles. If a couple doesn’t agree on the importance of making and sticking to a budget, not only will it not be successful, it will cause frustration and resentment.

Many couples don’t come into a relationship with the same thoughts on saving and spending. But just because you and your partner aren’t identical spenders or savers, doesn’t mean you can’t still live within a budget. Like anything else in a relationship, it just takes compromise between the spender and the saver.

If you’re on the side of the spenders, keep in mind that your partner is trying to trip the spending because they want to ensure your life together in the years ahead is even better than now. If you consider yourself a saver, understand that even if your partner is spending more in some categories of your budget than you’d prefer, as long as they’re within a predetermined budget amount, they’re still budgeting and following the rules, and that’s progress.

Before our trip around the world we worked through and agreed to spending levels for every part of our trip, and we sit down each week to see how we’re doing. I’m more of the numbers person so I track everything using mint.com to keep every expense logged, but we both go over our budget levels to see where we might need to cut back, or where we have some leftover budget to enjoy down the road.

Rowing in the same direction financially can be an extremely difficult challenge for some couples. But also know that along with the compromise needed as described above, you don’t have to be identical in the execution of this budgeting. It’s likely one of you is more of a numbers person. Let that person be the tracker of the budget, whether it’s on paper, a spreadsheet, or a personal finance tool like Mint.com. But both of you should have access to see all the numbers and know how you’re progressing, and talk about the numbers, so you’re working together in the same direction.

3. Think Big, Not Small

I saved this for last because it’s the hardest to do, but it’s actually where you should start your personal finance journey, and it’s the single most important thing you could do to gain wealth: decide what your overall financial goal is, and then invest your time and efforts toward that goal.

I’ve heard so many personal finance news stories reference the “make your coffee at home instead of stopping at Starbucks” as the big example of a behavior change to help build wealth. This is crap advice.

Here’s why. People get the sense that creating and maintaining a household budget is as simple and easy as making a pot of coffee. It ain’t. If it was that easy, everyone would be doing it. What happens is the person foregoes Starbucks a few times and thinks they’re doing something positive. At the end of the month when they’re still struggling, they give up. What’s worse, they’re less likely to try and get on a personal budget again.

If you really want to change your financial situation, decide what you want your financial success story to be. I would categorize these into two distinct camps:

  • Gain More Wealth: You want to be significantly more wealthy than you are right now, and you’re willing to change your life to do it.

  • Keep What You Have: You want to save smarter and spend smarter so that you keep more of the money that you have.

The reason you need to ask yourself this question is that the best and most efficient way to have more money over the long term is to make more money. This sounds intuitive, but most people don’t focus their time and efforts on increasing their career-earning potential. They worry about whether they should buy the expensive cup of Starbucks coffee.

For most people, making significantly more money than they make now involves making real career changes, some of which may be extremely challenging or even impossible. They might include real life changes such as quitting your job or going back to school to focus on a more lucrative profession. Or looking at the higher-paying professions in the career you’re currently in, and developing a long-term plan to get yourself to that position.

You may decide these more lucrative professions may not be as fulfilling or may not help you live the life you want to lead. And getting there is difficult or sometimes impossible, even with a smart plan. But if you want to gain real wealth you have to start with your income, because that will always gain more long-term wealth for you than trying to spend your current income more efficiently.

Perhaps gaining more wealth isn’t important enough to you to uproot your career and switch from the non-profit world to personal finance. Maybe you know you wouldn’t be happy in that higher-paying job, or perhaps a change of career just isn’t feasible for any number of reasons. But instead you want to be smarter about how you life your life financially. Then you know that you need to focus mainly on keeping what you have. This route also isn’t easy, but it’s much easier than changing your career to gain more income.

Before we made the life-changing decision to quit our jobs, we had to come to a difficult agreement and understanding that putting our careers on hold would likely mean that not only are we foregoing income for a year, we also might be faced with significantly lower-paying jobs when we return to the working world. We both have solid resumes in our fields but a lot can change in the economy in a year. Because we both made the decision that we wanted to shift gears and focus less on building wealth and more on enjoying what we have today, we became comfortable with quitting our jobs, a decision that would have been an unthinkable for both of us in the past.

As long as you think big, you’ll know you’re focusing your efforts on the right area of your personal finance goals.

We saved for decades before deciding to use part of our nest egg to take this trip of a lifetime. When we return to the working world we’ll be taking home a lot of great memories, and we’ll also have a new resilience to maintain these personal finance skills back home. As long as we remember to simplify, to row in the same direction, and to think big, we’ll hopefully be able to build up our savings for our real retirement.


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