So how much money does it cost to travel the world for a year?
For some people, a million dollars. For others, $15,000. The amount can vary wildly.
I believe that $40,000 is an excellent amount to have. This will easily cover your cost of living expenses and will leave plenty of money for all the fun stuff.
I met many backpackers while I was traveling the world for a year who were trying to do so too cheaply, and I feel like their experience suffered because of it. I believe that $40,000 is the amount needed to really get the most out of your Year Off and to really let loose and have an amazing trip immersed in flow and the feelings of complete freedom. You will rarely worry about running out of money and you will rarely have to say NO to anything you want to do.
With that being said, I understand that $40,000 is a whole lot of money and not possible for many people to save. If that’s you, please understand that you can travel full-time for a year on much less than $40,000.
My philosophy is to save as much money as you can on accommodations, food, and basic living essentials (without sacrificing too much comfort) so you can spend a big chunk of your money on all the fun stuff and the pursuit of your Year Off goals.
Let’s break a $40,000 Year Off budget down by total yearly cost. I’m basing these costs on my experience from my year-long trip around the world.
Accommodations – $12,000
Let’s look at what a typical week was for me while I was traveling:
- 2 nights per week in a hotel at $65 per night = $130
- 4 nights per week camping or in a hostel at $25 per night = $100
- 1 night per week of free camping or couch surfing = $0
- total costs per week on average for lodging = $230
These costs are underestimates for different parts of the world like the United States, Europe, and New Zealand, but overestimates for Asia, Africa, and South America. But if you travel in several different regions, the costs will average out to around $230 per week or roughly $12,000 per year.
I believe it’s possible to cut way back on accommodations though if you want, but remember, don’t sacrifice too much of your comfort to save a few extra dollars. A couple nights per week in a decent hotel is refreshing.
Food – $6,000
I think $500 per month is a reasonable amount of money to spend on food for one person. This works out to $6,000 for a whole year. This will provide a decent meal at a restaurant a couple days per week with all other meals cooked on your own using food from a supermarket.
Once again, this is an under-estimate for certain areas of the world but a big over-estimate in others.
If you are a foodie and want to eat all the best food that the world has to offer, then increase your food budget accordingly. You can make sampling the world’s fare a Year Off theme of yours!
Travel Insurance – $1,200
Travel insurance is necessary if traveling for an extended period. There are financial risks associated with long-term travel, so it’s important to protect yourself. Read more about travel insurance in this blog post.
A good travel insurance plan (like one offered through World Nomads), will cost around $100 per month (or $1,200 per year). The better the coverage, the more it will cost. Make sure your plan will cover all the activities you want to partake in.
Health insurance is a whole different animal to deal with. I’m not convinced that it’s necessary to continue health insurance if traveling full-time abroad. Read why in this blog post. But if you do decide you need it, then you’ll need to factor in another $6,000 or more for coverage.
Cell Phone Service – $1,000
Sim cards are readily available throughout the world so you never have to go without cellphone or data service. It’s possible to travel just about anywhere though and only use free wi-fi. I traveled around Europe for 10 weeks and never once turned on my Verizon service or bought a sim card. I just used the free wi-fi at the hotels and hostels I stayed in and a free navigation app like maps.me to navigate when I was out and about.
Plan on at least continuing your coverage from home, even if you’ll never use it while traveling abroad. It’s nice to have a way to call someone in case of emergency.
Car Insurance – $1,000
If you sell your car before your Year Off, then you don’t have to worry about car insurance. But if you’re like me and an American Road Trip is on your agenda, then you’ll need car insurance. The more expensive your car, the more expensive your car insurance, so buy a reliable car that’s not too crazy expensive.
Miscellaneous Travel Expenses – $1,000
These include vaccines, visas, and car maintenance. Make sure to get your vaccines well in advance of your sabbatical while you still have health insurance to help reduce the costs. If you’re driving a lot of miles in your car, then you’ll inevitably need an oil change or get a flat tire or a speeding ticket so include those costs here.
Flights – $3,000
How much you spend on flights all depends on how much you want to jump around the world. The more you travel long distances, the more you’ll spend. That’s why I think it’s best to focus on just a couple continents while traveling for a year. That way you’ll avoid the big airline tickets to and from your home country multiple times.
Book a round-trip ticket to a big city in a region you want to visit (like Europe, Southeast Asia, Africa, South America), then utilize the much cheaper transportation options once there to get around (buses, trains, local airlines). Because of cheaper airline tickets nowadays, a $3,000 flight budget will very likely get you three round-trip tickets to a big city in a foreign country and several short regional flights.
Other Transportation Costs – $3,000
These other transportation costs include fuel for your car, rail and bus tickets, and the occasional rental car. Once again, it’s possible to cut way down on these transportation costs by staying for longer periods in fewer locations. Better yet, completely eliminate these transportation costs by thru-hiking a long trail like the PCT, AT, or Te Araroa.
Countries (like those in Europe) with extensive travel networks have very cheap bus tickets available. Rail tickets tend to be a bit more expensive. Regional flights are likely to be the most expensive, but it’s possible to find dirt-cheap flights in certain areas and on certain days. A $3,000 budget for regional transportation costs will very likely get you transportation to over 30 different locations during a year.
Other Unforeseen Costs – $800
A lost pair of glasses. A forgotten vaccine. An extra bottle of wine in Italy. Souvenirs for people at home. There are many unforeseen costs that can arise so it’s nice to factor in a bit of a cushion so you don’t have to feel guilty about spending money on them.
Year Off Dreams – $11,000
If you save $40,000 and stick to the budget on everything I wrote about above, then you’ll have $11,000 leftover to spend on whatever the heck you want. Bungee jumping in New Zealand. Climbing Kilimanjaro and an African Safari in Tanzania. Climbing Mt. Rainier in Washington (check out some of the cool stuff I did while gone here). You’ll have plenty of money leftover for the pursuit of those greater life goals of yours.
Remember, it’s important to have a good cushion for these activities. They will create the memories that will last a lifetime. You don’t want to have to say no to an exciting activity because you don’t have the money. Do what you can to keep to your travel budget so you have plenty left over to create all the incredible memories.
Compare this budget to your budget at home.
Just for fun, figure out how much money you spend per year while living at home. Factor in everything from fun and entertainment to monthly bills and groceries. I found that it was actually cheaper for me to travel full-time than it was to live at home. Many people find this very surprising. I found it very surprising.
Traveling the world isn’t as crazy expensive as everyone makes it out to be. We’re often painted the picture of luxury travel and how glamorous it is. That seems to be the only option out there. But keep in mind, there are ways to save significantly on costs associated with travel. And when you travel long-term, you reduce many of the big expenses both at home and on the road, making long-term travel actually cheaper than living at home.
Unable to save $40,000 for a Year Off? That’s OK!
Cut your travel expenses way back and only spend $20-25k on a year of travel. Pick just two or three places to live in abroad and eliminate all the travel in between countries and cities. Plan on spending just 6 months abroad and save $20,000 for that. Pick a set amount of money that you’re feasibly able to save then make your travel plans a reality based on it.
Long-term travel is a life-changing experience and worth every penny, no matter how many pennies you have. So do what you can to save a good chunk of money, then hit the road and have the time of your life.
Check out my other post on how much money is needed for a Year Off for some additional considerations.
Start planning your Year Off now at my planning page!