I was sitting on the tarmac in Buenos Aires, Argentina, absolutely exhausted. I had just been on an 8-day non-stop “vacation” through 6 cities and 2 countries. I wasn’t looking forward to what was ahead. I would land at 8:00pm, head home, try to sleep and then at 6:00am it was back to the grind – 8:00am at the cubicle job, followed by 3 hours of MBA night school.
As I reflected on my Argentina adventure, I knew this wasn’t the way I wanted to vacation anymore. I had met a lot of people during the short trip, and only I seemed to be traveling at this hectic and short pace. I asked others how long they were traveling and heard — 3 months, 5 months, 12 months, and one guy was planning on being on the road for 18 months! My trip was 8 days. Something needed to change. I took out my notebook and wrote down my new life goal – to travel for an entire year.
There were only the petty details of convincing my girlfriend to quit her job and go with me, and saving all of the necessary money.
When I got back home, I told my girlfriend the new life goal, and I told her I couldn’t do it without her. Without hesitation she was in. (Sidenote: she’s really awesome)
Now that the decision was made, the next step was starting to plan and save. In the following post, I’ll walk you through how I determined how much to save and how I went about making it happen.
How much to save?
This amount is going to depend on numerous factors. A few things to consider – your travel style, which countries you’re visiting, how often you fly, and what kinds of activities you like to do. To start, check out what others have spent (including us) in this great round-up — “How much does a RTW trip cost?“. Make sure to read the comments as well. You can also read Michael’s 11-month RTW cost & Christine’s Budgeting an RTW trip.
Now that you have a better idea of how much money you need, I’ve created a “scenario planning spreadsheet” to look at how much you need to save.
You can change all of the yellow cells to create different scenarios. In the spreadsheet, I have scenarios for a 6-month trip and a 1-year trip, both with various flight costs and per day costs.
At the end of the spreadsheet you’ll find out how much you need to be saving per paycheck (or per month or whatever). This is the key to the next step.
The key to saving is automation — as they say, “set it and forget it”. Using the above spreadsheet, you’ll learn how much you need to save. The key to turning this amount into reality is automatically having the money come out of your paycheck or bank account on regular intervals.
To make this happen, I recommend setting up an ING Direct account. With ING you can setup multiple sub-accounts within your main account. With these sub-accounts you can create different buckets to save money for different things. For example, I had sub-accounts for “Grad School”, “Wedding”, and “The Big Trip”. All of these sub-accounts can be setup to automatically pull money from your bank account on the day that your paycheck lands in your account.
Another great way to throw in a few bucks now and then is when extra money arrives. Your annual IRS refund is a great example, or a bonus from work. Even small things, like a mail-in-rebate check, you can throw into savings. These are all examples of unplanned money that your budget most likely doesn’t count on. If you can normally manage without it, why not just save it?
Earning Money on the Side
You’ll more than likely need to cut back on eating out, buying new things and other cost savings measures. However, don’t forget about the other side of the equation. You could also earn more as well. This deserves an entire article by itself, but here are some ideas to earn a little extra money:
- Write & sell itineraries for Unanchor [ A personal plug :) ]
- Offer tours through Vayable
- Plan people’s trip on Elance
- Rent out your couch on Airbnb
- Rent out your car on GetAround, RelayRides, or WhipCar
- Have a travel blog? There’s help on making money from it!
Make it Happen
This can all seem very daunting. After talking with many people the last few years about the process, the hardest part is making the decision to do it. Do you really want to travel for a long period of time? Then make the decision to do it!
Now, take one small step to make that happen. Figure out how much you need to save. Set up an ING account. Or setup your first automated savings. Leave a comment below and let us know what you did to get one-step closer to your goal!