How Much Money Do You Need to Travel for a Year?

One of the first things people do when considering a year of travel is they talk themselves out of it for financial reasons.

Most of the time, the worry about not having enough money takes more of our headspace than doing the actual maths. So how much money do you need to travel for a year? This post explores this to help you work out if you have enough.

WHY OUR CALCULATIONS CAN BE MISLEADING

Usually when we try to estimate the cost of travel, we compare it to a short holiday. A week away, including flights, hotel and eating out, can easily run to $1,500–$2,000 per person. Multiply that to 52 weeks and the figure sounds impossible.

But a year of travel doesn't work like a holiday. You have time — and that makes it easier to save money.

You can take overnight trains and buses instead of expensive flights. You can negotiate better rates on accommodation if you stay longer. You can dine where locals eat rather than at the pricey tourist restaurants.

This means your daily costs will drop, often significantly. When I travelled solo for a year, I spent closer to $2,000 per month rather than per week.

LOCATION, LOCATION, LOCATION

Destination matters: the cost of your year out will depend a lot on where you go.

In regions like Southeast Asia, India, parts of Central and South America and Eastern Europe, you might spend $1,000–$1,500 per month for basic accommodation, food, transport and activities.

Meanwhile, in Western Europe, Australia, New Zealand or Japan, the same style of travel could cost $2,500–$3,500 per month or more. The daily costs are closer to what you'd spend at home.

Slow travel in well-chosen destinations will stretch your budget much further.

WHAT A YEAR OF TRAVEL ACTUALLY COSTS

Using the guidance above, we can estimate that a sensible budget for twelve months of travel, excluding international flights, would be $15,000– $40,000.

Your spending will depend on your travel style, how often you move and the choices you make along the way.

For a more granular estimate by destination, I found Budget Your Trip to be a very useful tool. Here, you can select your desired destination and travel style. It then breaks down the likely daily costs for your accommodation, food and transport.

I used it when planning my own trip around the world and always added 10% as a buffer. In the end, I found it reasonably accurate. In months when I came in under budget, I used the extra to splurge on nicer accommodation or activities like scuba diving.

CONSIDER YOUR COSTS AT HOME

Don't forget any financial commitments you have at home that will continue while you're away.

Take into account any student loans, car finance, insurance and subscriptions you've taken out. List everything to work out what you can cut and what your remaining fixed monthly outgoings will be. This needs to be part of your total budget calculation.

I maintained my home mobile phone subscription payments, even when I used a local SIM card in the countries I visited.

If you own a property, you might consider renting it out while you travel to cover your mortgage costs.

ALLOW A BUFFER

On top of your travel budget and home costs, you need a buffer for unexpected expenses.

You may incur medical bills, have to buy a last-minute flight or - as happened to me - your camera breaks during your journey and you need to buy a new one, These things happen.

A realistic buffer is somewhere between $2,500 and $4,000.

FINAL THOUGHTS

Most people who take a year out to travel aren't wealthier than everyone else.

They've worked out their budget, made smart decisions about where to go and accounted for unexpected costs.

The next question is how to save up this money and make the other practical decisions that come with leaving work and home behind.

If you're planning a career break to travel, that's exactly what I help you with in my 1:1 sessions.

JOIN THE WAITLIST

Disclaimer: The figures in this post are based on personal experience and general research. They are not financial advice. Please do your own research and consult a financial adviser before making significant financial decisions.

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