How We Created Our Round the World Travel Budget (and How You Can Too)

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Before we took off on our RTW trip, it was super important for us to plan roughly how much we were willing and able to spend. We didn’t want to get stuck halfway around the world and only halfway through our destinations only to find out that we didn’t even have enough money to buy a plane ticket back home!

So we created a thorough budget that would help guide us financially through our trip.

**Cue RTW Budget**

To better understand our RTW Budget, it would probably help to understand how we created the thing. Then you can use the same principles to personalize your own RTW travel budget with your customized destinations.

To help you customize your RTW travel budget, we made a handy dandy Microsoft Excel template with easy to use formulas already implemented in locked cells, and blue highlighted cells ready to be filled in by you (blue is for you!). It’s broken up into 8 categories: Accommodations, Food & Drink, Local Transportation, Activities & Entertainment, Alcohol, Living Expenses & Toiletries, Souvenirs, Mishaps. It is the exact format we used to come up with our RTW Budget and it worked like a charm. You can get it here!

Transportation between cities/countries as well as visa costs are not included in our budget or the budget template because this will vary greatly depending on you trip. While we do not recommend booking all your transportation ahead of time, unless it’s a shorter trip, it’s a good idea to research transportation prices to plan that ahead. And you will definitely want to research visas before you begin to plan your itinerary. Find out how to know if you need a visa by reading this post. Now let’s get to the planning!

Step 1: How much money can you afford to spend?

It’s worth noting right off the bat that you don’t neeeed a lot of money to travel. You can choose to work while you travel by signing up for sites like WorkAway, HelpX, or WWOOF, or by becoming a digital nomad that makes money from your laptop, or you can travel like we did and work very little or not at all. But no matter which combination of work and travel you choose, it is still a good idea to budget ahead of time to figure out what amount of money it will take to go where you want to go.

Before you do anything, you should decide how much you can afford to spend. This will help you decide what kind of travel style you will have, where you will go, and for how long. And remember, the most important thing is to be realistic with this number and be truthful to yourself. And if you plan on returning home and giving yourself a little time to readjust and get a job again, make sure you leave yourself extra to come home to.

Everyone’s answer for this will be different. Some people have a higher tolerance for risk. Some people are fine traveling on $35/day. Some people are independently rich. Some people have almost nothing in their bank account, but they are willing to work everyday to afford a lifestyle of travel. If this is you, please be careful! A rainy day fund is a necessity in case any major mishaps should occur and some countries theoretically don’t even let you enter the country unless you have enough money to sustain yourself while you’re there.

Personally, we decided we were both comfortable with dedicating $20,000 each to travel the world. This left us with a rainy day fund and money to come home to so we weren’t stressed if we did use up the entire dedicated RTW Budget (spoiler alert – we can in under budget!!)

**IMPORTANT: We allocated roughly half of the money we were willing to spend to day-to-day travel expenses (i.e. the 8 categories covered in the RTW Budget and Travel Budget Template) and the other half to transportation between cities and countries, visas, gear, vaccinations, and everything else.

The next steps were to decide where we wanted to go with this money and for how long.

Step 2: Where and for how long?

So we decided altogether, we had a budget of $40,000 to spend to travel the world (see **IMPORTANT note above). But to where? And how long would this last us? These two questions go hand in hand. This is where the budget process gets a little more fuzzy.

Depending on your budget and your travel style, where you want to go will very much dictate how long you can go for. If you want to go to more expensive countries, say like in Europe, your travel budget just won’t go as far as if you went to countries in Central and South America.

So our best advice here is to come up with an ideal itinerary. Like a best case scenario, what an ideal and realistic trip would look like. You’ll be able to further refine it and find out a little more if it’s doable in the next step. Give yourself enough time in each place and account for travel time on buses, trains, and planes. You don’t have to plan it down to the city unless you want to – we just planned the countries in our itinerary.

We went a bit overboard with ours and planned to go to around 40 countries in our allotted nine month time frame. By the time we left on our trip, we had knocked this down to 29 countries as you can see in our RTW Budget, but in reality we only made it to 22 total. You will get a better feel for your capabilities as you go, and you will have to become comfortable with going with the flow and skipping things if necessary to make a smoother trip. We made our ideal itinerary by just discussing together where we would like to go. We both knew if we traveled to cheaper countries, we could be gone for longer (bye bye most European countries we wanted to go), and there were some countries we knew we did not want to miss, it was a non-negotiable (like Egypt).

If you already know you have a set time frame that you can be away, then figuring out the timing is a lot easier. For us it was a little open-ended, but we ultimately decided on 9 months because we planned to leave in late March/early April and we wanted to spend New Year’s in Sydney, Australia which meant we would be away a minimum of nine months. We wanted to come home after the holidays to see our families and start off a new tax year with jobs again (wishful thinking I suppose). We ended up being gone nine and a half months in total, and we STILL came in under budget!!

Okay so to recap, you figured out how much you can afford to spend, what your ideal itinerary looks like, and maybe how long you want to be gone for. How do you turn this information into a budget?

Step 3: Research your destinations

This is where the real top secret info comes into play. We have a secret weapon that helped give us pretty accurate cost and spending figures for countries and cities we had never been to. This is what really made our travel budget. This is what solidified our ability to go to 22 countries on 5 continents in 9.5 months.

It’s an amazing website where real travelers share their real spending figures and costs all over the world – BudgetYourTrip.com.

Here is an example of the information you would get for Colombia on the Budget Your Trip website:

Colombia Travel Costs

The information can be changed to various currencies and various travel styles from budget to mid-range to luxury. We always used mid-range to protect ourselves, but if you’re confident in your budget travel abilities, by all means, use budget!

Another important note is that these figures are PER PERSON. If you are traveling as a couple or as a group, always multiple this figure by the number of people going to get a total cost for everyone.

There are other websites that have great information that can tell you what prices to expect, but we found BudgetYourTrip.com to be exactly what we needed to be and pretty darn accurate for most places. And of course if you’re planning to go to some of the same destinations we did, you can use our RTW budget figures to plan as well.

Use your best judgement with these estimates and start combing through your ideal itinerary. Does it look like you’ll be able to make it to all your desired destinations and still stay under budget? Are there some outlier countries that seem too expensive for your trip? This is a good time to weed out the too expensive ones. And remember to try to travel in a nice path, traveling in one direction without having to go backward much – this will only increase costs unnecessarily in most instances.

Step 4: Complete travel budget

So after we decided how much we were willing to spend, where we wanted to go (weeded out a bit), and for how long and with better understanding of the cost of such itinerary, it was time to really make our RTW Budget a reality. Just so you know, the whole process to just get us to this point alone, took weeks.

We are both pretty Microsoft Excel savvy people, both having studied finance in college and working in finance related careers. So it came natural to us to create our own working, calculating budget within the program that fit our needs.

We listed every continent we wanted to go to with every country we planned to go to underneath it, and all 8 categories of our budget within each of those. We made one side of our budget the ‘Budget’ side and one side the ‘Actual’ side, so we can compare what we assumed our spending would be to what it actually was. This helped us tweak our spending as we went along.

On each of the ‘Budget’ and ‘Actual’ sides of the budget, we had the following columns:

# of days – amount of days we budgeted/actually were there

$/day – how many dollars we spent each day on average (a calculation of $ Total ÷ # of days)

$ Total – total dollar amount spent in that location

$ % – percentage of dollars we spent in comparison to the total amount of dollars spent (a calculation of $ Total in _____ Country or Category ÷ $ Total in _________ Continent that Country is in or Total for That Country)

>> We guessed the $ % on our ‘Budget’ spreadsheet side to calculate the spreadsheet in the beginning and tweaked it to match our actual spending as we traveled<<

At the right of all of this is the Total Variance column which shows the dollar difference between what our estimated budget was and what the actual spending was. Green means YAY we came in under budget. Red means BOO we went over budget.

Not only is all of this broken down by country, but by categories within those countries and total by categories as well. It’s A LOT of information to take in. But oh so helpful.

Once we had this budget sheet created with all formulas placed within Microsoft Excel, it was time to start plugging away, filling in the ‘Budget’ side with how many days we expected to stay in each country and what BudgetYourTrip.com said was the average daily cost of each country. The formulas then did what they were designed to do, and calculated the whole sheet out for us to give us a good idea of how much we could spend everywhere to stay within our total budget.

We did all the hard work for you by already creating the budget spreadsheet with working formulas! Just research your destinations, plug in the numbers, and go on our trip! Download the Travel Budget Excel template to get started.

Step 5: Keep track of expenses

Now that you have your budget and you’re on your trip, you need a way to be able to use the spreadsheet to calculate your ‘Actual’ spending to compare to your ‘Budget’ and make sure you’re still in good financial shape right? We wish we had an easy answer for you, but the truth is, you need to pay attention to every expense, and record it until you’re able to add it all up in your spreadsheet.

Carlos would make a note on his iPhone every day of every expense we incurred in the local currency. He would notate the amount and what it was for. He then would transfer this information to yet another spreadsheet (we loveee spreadsheets) and it would calculate the totals that we would then enter into the Total $ cells of the ‘Actual’ side of the spreadsheet.

Yes keeping track is annoying, but you will thank yourself later because you’ll never be surprised to find out how much you actually spent in a country – you’ll already know.

So there you have it! That is how we created our RTW Budget. It may seem a bit complicated, but once you start working with the Travel Budget Template in Microsoft Excel and start researching your destinations in BudgetYourTrip.com, you’ll get the hang of it and totally start to understand. The best part is, the more in control of your RTW finances, the better a trip you can plan!

If you have any questions about creating your own RTW Budget or about how we created ours, please let us know in the comments!

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