If you’re dreaming of a trip around the world, you’re likely wondering how much it will cost. In this detailed guide, we’ll break down all the expenses you need to plan for to turn your dream trip into reality. Finding information on world travel costs can be challenging, as there are as many budgets as there are travelers. This makes it difficult to pinpoint a specific cost for a round-the-world trip. However, we’ll show you how to calculate your world travel budget based on different travel styles, destinations, and personal preferences.
Average Cost of a Trip Around the World
A world tour can cost anywhere from $10,000 to $80,000+ per year, depending on how you choose to travel. For our specific journey, we spent about $35,000 per year for two people traveling with a vehicle.
Here’s a breakdown of the typical costs for different traveler categories:
- Budget Traveler: $8,000 – $20,000 | Daily expenses: $40 – $60
- Mid-range Traveler: $25,000 – $35,000 | Daily expenses: $70 – $100
- Luxury Traveler: $50,000 – $80,000+ | Daily expenses: $150 – $250+
Most budget estimates are based on backpackers, but in our case, our overlanding trip falls under the budget category, with our total expenses for two people at $35,000/year. Our largest costs were vehicle maintenance and fuel, but our accommodation and food costs were significantly reduced as we camped out and cooked our meals along the way.
Thinking About Your Budget: Key Questions to Ask Yourself
Before you start budgeting, here are a few important questions to consider:
- How long are you traveling for?
The duration of your trip is a major factor in your budget. A longer trip may allow for more flexibility to travel slowly and take advantage of better-priced opportunities. - Where are you traveling?
Different regions have varying costs for food, accommodation, and transportation. Cheaper regions include Southeast Asia, Central America, and parts of South America, while more expensive areas include North America, Western Europe, and Australia. - How will you manage transportation?
Travel mode directly impacts your budget. Do you plan to travel by foot, public transportation, bike, car, or boat? If you’re using a car, think about whether you’ll DIY your vehicle setup or hire professionals. - How will you manage accommodations and food?
Daily expenses are crucial, and food and accommodation will significantly impact your budget. We saved a lot by choosing to live in our 4×4 camper instead of paying for hotels or restaurants. - What are your daily activities?
Excursions and activities can add up quickly. Make sure to plan for them to avoid drastically increasing your daily budget.
What to Include in Your World Travel Budget?
The most challenging but essential part of planning is determining what to include in your budget. Here’s a breakdown of what you’ll need to account for:
- Equipment/Gear/Vehicle: The initial investment in your gear or vehicle is often overlooked. For example, investing in a high-quality backpack or properly equipping your vehicle can save you money in the long run by reducing costs on the road.
- Transportation: If you’re traveling by vehicle, be sure to account for maintenance, spare parts, and fuel. For those backpacking, don’t forget to include costs for public transportation or car rentals.
- Accommodation & Food: Accommodation and food costs are essential to budget for, but remember to build in some flexibility for comfort, especially on long-term trips.
- Health Insurance: Don’t leave home without adequate health insurance! For example, Nick had an accident in Mexico and needed a knee surgery, which cost $25,000. Thankfully, our Chapka insurance covered all expenses.
- Communication/Mobile Internet: Mobile internet is a crucial aspect of your travels for research, booking accommodations, and staying connected. Consider getting an eSim like Holafly for easy access to data worldwide.
- Visa, Administration & Vaccinations: Visa costs can vary, and some countries require vaccines before entry. Be sure to know what’s required for each destination to avoid any surprises.
Pro Tips to Save Money on a Trip Around the World
Here are some tips to save money while traveling around the world:
- Identify the most expensive components of your budget and find more economical alternatives. For example, we invested in a 4×4 camper, allowing us to save on accommodation and food.
- Keep track of all your expenses in details: We use the app Buddy document all of our expenses and revenues. Check out our list of 6 essential apps we use when we travel.
- Eat local: Avoid tourist spots when dining out. We found that eating at truck stops or local roadside stalls often led to great meals at lower prices. Similarly, shopping at local markets instead of supermarkets saved us a lot.
- Research discount codes and rewards plans whenever booking travel services. Small savings add up quickly! For example:
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How did we calculate our saving plan
How did we calculate the date on which we could resign and leave? We need to add up the initial fixed costs for the gear/vehicle to be bought before the journey and the yearly budget. Let’s imagine a couple who leaves with a van they equipped themselves for a total cost of $25,000 and calculated a yearly budget of $35,000.
[initial fixed cost] € + [annual variable] € = [Budget to save for one year] €.
One-year target budget: $25,000x + €35,000 = €60,000 (rounded)
Don’t be put off by the fixed costs, backpackers leave with almost no initial fixed costs, some travellers have 4×4 for $10,000. It’s the most expensive and the most variable.
1st part of the calculation method: (for 2 people)
The couple earns €5,000 net. Their fixed monthly costs (apartment, water, gas, electricity, wifi, Sim, Netflix subscription, etc.) are €1,000, and also allow for €1,000 in pocket money (things you need that aren’t strictly essential but that you want to continue even while saving: restaurant, books, hairdresser, train ticket, etc.).
[Net monthly salary for 2 people] € – [monthly fixed costs] € – [pocket money] € = [monthly savings] €.
$5,000 – $1,000 – $1,000 = $3,000
2nd part of the calculation method: (for 2 people)
[Target for 1 year] € / [Monthly savings] € = [number of months of savings].
60,000 / 3,000 = 20 months = 1 year and 8 months.
Our couple will therefore be able to raise the funds needed for the trip in 1 year and 8 months.
The purpose of this article is to show you that there are many ways of adapting your plans to adjust your budget or savings time. We hope this guide has helped you understand how to budget for your world tour. Of course, once you hit the road, you’ll better understand your actual monthly needs. And remember, the day you drive off will be the best day of your life!
You can do it!
Nick & Mathilde