Why a wrong travel budget can ruin your trip around the world

Thinking about long-term travel, you may picture yourself hiking on long-distance trails, stargazing from the roofs of converted camper-vans or working remotely out of a hammock on sandy beaches. There are, however, three words that can destroy any romantic travel fantasy: TRAVEL. BUDGET. PLANNING. But wait, planning your travel finances does not have to be boring. And most importantly, it saves you from waking up in the middle of the night soaked in sweat at the other end of the world worrying about your vanishing savings.

While you might have imagined how it would be to go on a long-term travel around the world or already put it on your bucket list of things to do before you die, chances are high you have not yet worked out how to actually finance your dream.

Why do you have to think about travel finances? Apart from the obvious reason that whatever you consume on your travel around the world has to be paid, there are many other reasons worth investigating.

Here’s why it is important to think about your finances before going on a trip around the world:

  • If you are settled, traveling around the world might imply quitting your job, selling your car and ending the rental contract of your flat. Current assets, no matter in form of cash, bank accounts, stocks or other types are your only remaining anchor and assurance that there is a way back to your old settled life, in case the traveling or digital nomad lifestyle is not as per your expectation.

     

  • Every new country always brings new surprises which add spices to your travel adventure. Traveling of course gets its magic from experiencing the unexpected. However, this does not apply to financial aspects of your travel. The better you know what costs to occur on your travel, the less stress you will face and the more you can focus on exploring. Do not make the mistake of assuming that travel costs will be the same everywhere on the planet. While there for sure are the same hotel chains, fast-food empires and transportation providers at most of your destinations, price levels vary significantly. At some places, the cost of a bed in a dorm room if ridiculously cheap, e.g. in Thailand while in other, less backpacker-focused places such as Botswana, prices for the same are ridiculously expensive. A sound travel budget prevents you from negative surprises when it comes to travel cost.

  • With more people than ever traveling, the number of travel scams is exploding as well. We all have heard about overpriced hotels, tours or souvenirs at top travel destinations on the news. Tourists are an easy target for evil-minded people as they are mostly unfamiliar with languages, laws or common practices. Also, as tourists we do not want to make a bad impression to local communities. While we all believe tourist scams can never happen to us, they actually can. In most of the cases, knowledge about regular prices could have avoided the scam. It’s therefore a good advice to carry out research on the expected cost before you travel to an unknown place.

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  • The reason you are planning for a long-term travel around the world is to enforce a change into your life. And it’s a scientific fact: travel shapes your personality more than anything else out there. It has impact on your preferences, priorities and believes. The path from your pre-travel personality to your post-travel personality, however, will not be a straight line in most of the cases. You will face ups and downs and constantly reinvent yourself as your explore different countries, cultures, lifestyles and people. It is therefore important that your travel budget allows you to explore what is out there so that you do not limit yourself from becoming what you are meant to be. Try out whatever you want and as much as you want. We have heard of travelers who went to top tourist destinations but had to restrict themselves on experiences and activities. Do not make the mistake of traveling to places for the sake of checking them off on the map but visit places in order to experience them to the fullest.

  • Travel is about growth, not restriction. You did not decide to travel around the world in order to downgrade your life, or even fight a daily battle for survival on a tight budget. On social media, there has been a war on who is able to travel on the tightest budget. It has come so far that the leader’s budget went from $50 per day to -$50 per day. That’s right, a negative budget! News got flooded with reports about begpackers in the middle of this year. Do not make the mistake of joining this racer to the bottom. Let’s face it: here is no point in proving that it is possible on a tight budget. Life is possible on less than $5 per day. In fact – and unfortunately – most of the world’s population is forced to do that every day for their entire life. Again: one of the reasons if not the reason you decide to travel around the world is personal growth. To facilitate growth, it is a good advice to invest.

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  • Everything one day comes to an end. Even long-term travel. Only a handful of people keep on traveling forever. Although you might not be able to imagine right now as you are enthusiastic about traveling around the world, there will be a time when you have a desire to settle down, raise a child or start your own business. Chances are high that your life after travel will be very different from that of the mediocre and people around you. This extraordinary life will only be possible if you have kept enough money aside. This of course does not mean that you need to have everything saved for your future life before your trip but a good foundation to start. In times of low interest rates, however, it is better to not only keep money aside but also earn money as you travel around the world. 

  • Apart from the reasons above that were on your personal life journey, there is a pragmatic reason why you should manage your travel budget wisely: in order to be eligible for tourist visa, many countries require you prove financial liquidity proved by your most recent bank statements, in some cases of up to six (!) months before your visa application. This means you have to plan and show financial liquidity well ahead of the start of your long-term travel. Taking into consideration the recent media hype on begpackers, the number of countries enforcing these requirements will rather increase than decrease. You should therefore make sure a good portion of your travel budget is directly available on your bank account or credit card.

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