The Trip Heard Round the World: How Did We Do It? A Few Thoughts on Finances and Long Term Travel Sabbaticals

Money makes the world go round, also makes you go around the world

Jen here. It seems as if this type trip would be impossible for you to replicate, right? We have heard that regularly: "I could never do it." "We could never do that." Let me assure you that some iteration of a trip like this really isn't impossible for most of the folks reading this. Thousands of people are traveling long term, round the world as a family unit. So is there a lot of work and some luck in terms of right place/right time? Yes. Impossible? No. Maybe for you and your family it isn't the better part of a year, maybe it isn't multiple countries, maybe there is less air travel involved, maybe there are more or fewer people involved. And I am aware that there are large swaths of people who don't have the same resources. I suspect you are overestimating our resources (easy to do when we are posting beautiful pictures of amazing places, I get it). And full disclosure: we are not debt free, although we do not carry consumer debt. Some financial advocates/bloggers/planners would never thumbs up this trip based on the amount of student loan debt we have. With that said, we made a decision for our family to have this experience at this point in our lives, while we still were all together (university looms in less time than one might imagine) and have our health; as a consequence we will pay another year on our loans and lose out some on retirement this year. Seven months in, we can say it was beyond worth it. Onward.

From Encircled.ca

Lets Go!

Jobwise, you will have to figure things out for yourself, whether you can port your job, request a leave or simply leave. It is going to be subject to your individual situation. If you can figure out how to keep generating income on the road, all the better. I know many of our loyal blog readers have portable skills from yoga and dance teachers to writing/editing to consulting to nursing, vet tech or other professional skills. However, even though its a big subject, I want to put aside gainful employment for a bit and mention a few things that helped us launch: automating savings, living within our means and near paralysis by numbers analysis.

1. Automate
Automate your savings, simple as that. You all already know this and are perhaps doing this as we speak, but if not, know that you can set up an account within your bank/credit union, or if you want to make it more difficult for to access your savings, put it in a different bank. At home, savings builds modestly and generally doesn't get touched unless an emergency, like when we had to buy a new boiler last fall. Having an online account really helps. Believe me, I was not a born saver.

When we committed to the idea of this trip, I doubled down (nearly!) and autosaved as chunkily as I could. I was $800 short of my savings target for this trip when I boarded my flight to Italy in August, but along the way I got some birthday money and a settlement from Barbri so it evened out. And yes, should you be in the fortunate position to get money for holidays, birthdays or bar review settlements, stick that in your travel savings account. Be aggressive with trip saving. We hustled a number of side gigs throughout the spring to maintain our solvency this past spring which meant we didn't lose savings. It sucked at the time but we are glad that we did. We also eat a lot of lentil soup, which leads me to....

2. Live Within Your Means and Reduce Your Spending
Easier said than done, and believe me, I get it, having lived on some weepingly, ridiculously stressfully low non-profit salaries in some of the most expensive areas of the country since leaving my little hometown over half a lifetime ago. You all know about the latte factor, where you save up your money buy not buying a grande soy mocha frappacino every day. It is easy to scoff at the thought of such small savings but when you drive a fuel efficient car, skip your Starbucks (or equivalent) most days of the week, make a meal plan and grocery budget for the week (ditching the regular takeout)...these little dribs and drabs can add up. You all know that at this point I have embraced my thrifty Yankee heritage so I don't mind eating the aforementioned lentil soup three days in a row. Lentils are inexpensive and delicious as well as nutritious and versatile. Put your savings from your new legume lifestyle into that savings account earmarked "TRIP."

3. Know Your Numbers and Run Them Hard Until You've Exhausted Them (and Yourself)
This one is pretty personal, only you and your family know how much is coming in and how much is flowing out. But what if you subtracted costs like mortgage or rent, car loan, car maintenance, car insurance, parking, health insurance, commuting costs, power bill, cable bill, internet bill, kids' weekly and monthly activities and sports, gym memberships, the money you spend on impulse purchases...you see where I am going. In some instances you are going to replace these costs with on-the-road equivalents but you can start thinking. Add all of those things up.
Then, too, take your mortgage/rent and household expenses and divide by 31 to give a sense of what you spend daily to sleep under a roof with the creature comforts you've deemed necessary. On the coasts in particular, it is a pretty steep number. Start thinking about where you might want to go in the world and for how long. See how much homes like yours are renting for in your area (or, if you are a renter yourself, imagine not having to pay rent!). In most instances, you should be able to cover your mortgage by renting your house out. You should be able to sell your car with the knowledge that you can buy another one when you return -- you may just want to set that money aside right away for your new car upon your return, but you won't be paying for a car. You may want to sell your furniture and home goods. I can assure you that after living for months out of a suitcase you will be casting a dubious eye on a lot of your crap when (if!) you return. Depending on your personal situation and your local market, you may even want to sell your house. If you live in our area, use our fantastic realtor.
Look on Airbnb and Home Away, plugging in a month at a time to see what the costs of renting are looking like at your destinations. The 2 bedroom apartment in Dubrovnik we stayed in was just under $1600 for the month. Coming from metro NYC, that is not an expensive amount for monthly housing, and was significantly less than the mortgage we just ditched. But most importantly, we loved the location and getting to spend that time in the city. Look up the cost of travel insurance for the period of time you'd like to travel. Check out what travelers are saying about costs where you want to go. The slower you travel the less money you spend. Italy was our most expensive month, and we moved around a lot. In Sri Lanka, we moved around even more but it was much less expensive than doing so in Italy; however, we blew the budget by doing fun things like surfing, yoga, safaris and tours of ancient ruins. This leads me to an important point: budget enough money to have fun! You don't want to get to your destination(s) and always feel like you don't have the wherewithal to do the fun activities on offer there. And let me highlight for you: if you are traveling as a family, things will cost much more than if you are a solo backpacker or a couple. You will pay more for entrance fees, you will pay more for reliably safe places to stay in family friendly neighborhoods, you will learn that paying more for a place with a pool is always a good idea. You will not be sleeping in the el cheapo dodgy hostel dorm rooms (although I encourage you to check out private rooms in hostels). Alternatively, and we wish we had done this sooner while we were still in Europe, you can pony up the membership fee for housesitting websites. Doing a housesit will wipe out your need to pay for your roof for those days. And if you're in the fortunate position of not needing to cover your mortgage or you have a complicated companion animal situation, you can sign up to receive house sitter applications and screen for someone trustworthy to mind your place while you are traveling.
You also want to have a very significant cushion so that you can pay for your cat's oral surgery, your own healthcare bills at home and abroad, and many other things you just can't foresee. And remember how you sold a bunch of your stuff? Save some of your funds for that new couch, car or Crock Pot when you return.
Choose your target destinations based on what your own numbers look like and types of experiences you seek. Vienna is expensive! Chiang Mai is not! And there are a million in betweens. Again, these are very personal to each individual family but I want to reiterate how you can sit and do a little out of the box thinking (ok maybe a lot of out of the box thinking) and suddenly (well maybe not suddenly) find yourself snorkeling in the Maldives.

The Long and Winding Road

It needs to be emphasized that long term travel is really, truly not for everyone. The idea of leaving the familiar behind for the unfamiliar is not comfortable. It can be challenging, lonely and frustrating. You miss sharing holidays, birthdays, hugs, smiles, laughter, cares and concerns. Things inevitably go wrong, you get tired of wearing the same clothing again and again, you get travel fatigue, you long for the familiar, you lose stuff.

There will be some.

But you gain so much, whether you are scratching your own wanderlust itch or hoping to help instill it in others.

Other, far better resources abound online on this subject, I'm just planting seeds.