How to budget for a year of travel with your family.
Tips and guidelines for planning your big adventure.
In 2015 my husband and I decided to quit our jobs and travel the world with our two kids, aged ten and eight. It was a decision that has changed our lives, and one we will never regret. We get asked a lot about how much it costs to travel as a family of four for one year. There is no cookie cutter answer to this question. It really depends on you — your likes, your comfort level, what you hope to see and do. For us, it boiled down to a couple key factors:
- Where you travel. Europe, Japan, Australia and New Zealand are more expensive than SE Asia and most parts of South America.
- Your comfort level in terms of housing and types of transportation.
- How much you move around. If you stay longer in each location, your transportation costs will be lower.
- How much you want to cook your own meals versus eating out.
We started planning our travel budget by dividing it into two sections:
- One-time upfront costs
- Ongoing monthly expenses
One-time upfront costs
These were all the expenses to get us started on the trip, before we had even left home. Things that fell into this bucket were:
- Family health insurance for one year
- New luggage
- Upgrade to our technology (laptops, ipads, phones)
- Completion of our will
- Things we needed for our trip (clothes, school supplies, etc)
- Moving costs (costs to move out of our house, pack up our things)
- House rental expenses (getting house ready for renters)
- Pre-payment of our 2015 taxes, since we wouldn’t be able to file them from the road
- Pre-payment of our life insurance premiums
- Vaccinations & prescriptions (if needed)
Ongoing monthly expenses
We have a monthly budget for our trip that we track on Google Sheets. It took us a month or two on the road to get our ongoing expenses completely dialed. After trying several complicated budget scenarios, we simplified our budget into four trackable areas: housing, daily expenses, transportation and miscellaneous. We found that at first we were budgeting too low for housing. We realized that for us, having a comfortable place to stay was important to our happiness as a family. When we stayed somewhere we didn’t like, it colored our entire experience in that city. We were also all over the place on how to budget daily expenses and understand if we were over budget or under. Some days you are going to go over budget — you do a tour, or you do a huge grocery shop for the week, etc. You need to be able to understand how to catch up by spending less on subsequent days. We found that it worked best for us to have a daily budget for housing and daily expenses and a monthly budget for transportation and miscellaneous.
- Daily Expenses
- This includes food, museum entries, tours, entertainment, in-city transportation (busses, cabs, etc), treats
- Keeping our daily budget on track is probably our biggest budgeting challenge. We have found that we need to cook 1–2 meals at home every day to make our budget. Eating out with a family of four is expensive, unless you are eating street food (which works well in SE Asia).
- Museums and tours are expensive which is a bummer. Everyone thinks of museum hopping when you think of Europe. We found that we needed to prioritize and focus vs do everything. But if you get creative there are free entry days at many museums, and many places have kid discounts. We got really good at finding free guided walking tours, like Rick Steves audio tours or Sandeman’s free walking tours.
- Sunny, warm places seem to cost less for us than rainy, cold places because it’s easier to entertain yourselves for free outside (parks, beaches, walking through the city) vs having to pay to go to things inside (museums, cafes, etc).
2. Housing
- We have a per night budget that rolls up into a monthly budget. If we go over on housing in one city, we have to come under in the next city in order to hit our per night average.
- Housing was much more expensive in Europe than in SE Asia where we tended to stay in guest houses more than Airbnbs. But even the Airbnbs in SE Asia were less expensive overall.
3. Transportation
- We set a monthly transportation budget that covers all our transportation in between cities, countries, etc. This includes all country visas as well.
- We are moving around a lot on our trip, so our transportation costs are fairly high (almost a third of our total budget). You could save money by staying longer in each location, or focusing in one region, like SE Asia. For comparison, we are traveling in five regions: Europe, China/Japan, SE Asia, Australia/NZ and South America.
- We have gotten better at taking inexpensive transportation over time. For example, we are taking more and more busses instead of flying.
4. Miscellaneous
- This budget includes things like birthday presents, gifts we buy on the road, Christmas presents, postage, clothing replacements, purchasing cold weather gear when needed, fixing your iPhone if it breaks, etc.
- We found it was really nice to have a separate bucket for these types of expenses so we didn’t have to squeeze those costs into our daily budget.
In summary, there is no right or wrong way to plan your travel budget. Our macro advice would be to keep it simple. Be honest with yourself from the very beginning about what you and your family need to be comfortable on your journey. And be ready to adapt your assumptions on the road. I hope our learnings are helpful to you as you plan your own adventure. Happy travels!
