Planning a budget is an essential part of planning a gap year, and getting the basics right from the beginning can make the whole process easier. So let us start with the basics.
Before you get into the detailed side of budget planning, let’s just start with the absolute fundamentals. There are essentially three parts to any budget. The pre trip expenses, your daily budget and your emergency funds.
Pre Trip Expenses.
You just can’t get around the pre trip expenses. These really are overlooked so often by people who get carried away with the excitement of planning their trip, but they always come back to sting you at some point so you may as well plan for them. You don’t want to save up £5000 for the trip of a lifetime only to discover you don’t have anything left to spend when you get there!
Vaccination expenses, visa and passport costs (if you need them), the all important insurance, and finally – perhaps the biggest expense of all – the flight itself.
These are all absolute essentials.
There are some tips and tricks you can use to save a bit of money, but generally all of this will take a huge chunk out of your budget so make sure you allocate enough of a portion of it accordingly.
When you finally set off and you are on the ground, you then have to consider your daily costs of living. These include your accommodation, food, transport, activities and any other random costs you may incur on your travels. How much you spend on each one of these is completely dependent on how you travel as an individual. Are you an extreme budget backpacker staying in cheap dorms and eating street food every day or are you a flashpacker with a bit more cash to spend?
The very rough daily average for a round the world trip is about £30 GBP (approximately $50 US) a day. That’s £840 GBP a month or £10,080 GBP for the whole year.
You can of course be extremely frugal and spend much less than this, but you can also blow this budget out of the water and spend triple that daily budget on a single meal at a posh restaurant. Most travellers tend to be somewhere in the middle of these two extremes, even if many lean more to the frugal side of things more often out of necessity. Your budget also depends where you go too. This average daily budget will see you live it up like a king or queen in most of SE Asia or South America, but won’t last five minutes in parts of Europe or Australia. So if your trip is predominantly taking in cheaper, less developed countries you won’t need anywhere near that much, but you will conversely need a lot more if you plan to spend significant amounts of time in places like the UK, Europe, Australia, Singapore or Japan for example.
Finally you should have emergency funds in place for that unexpected flight home or for when an unexpected emergency arises. A credit card is okay for this, but ideally you should have some cash funds set aside too.
You are backpacking the world for a reason, to see new places and experience new things. So while budgeting and being frugal can give you the means to do that, it really isn’t worth under budgeting and travelling with so little money that you can’t afford to take advantage of some of the amazing experiences you will come across when you are out on the road. Getting your PADI certificate, taking a course, splurging on a nice meal or something that you love doing, all of these things and more cost money, and it really isn’t worth passing up on them just because you don’t have the money. So make sure you get the budgeting right before you go.