How NOT to Budget (Trust Us, We Now Know)

We have to stop spending money like we are on vacation!

This is what we told ourselves when we looked at our finances after a month of travel. When we initially set our budget for the year, order we had looked at many travel websites to get a sense of spending estimates. Fellow world travelers Warren and Betsy provide a detailed and transparent account of their budget on their website, buy Married with Luggage, and we thought that if these two 40-something professionals could do it on $100 a day (and in countries more expensive than the ones we are traveling to), we could certainly do it as well. After all, Jenni and I like to think of ourselves as rugged no-nonsense backpackers.

We gave ourselves some extra cushioning and set our year’s budget at $50,000 for the two of us. We figured that between the cheap cost of living in our destination countries plus free lodging with family and friends living abroad, $50,000 would be more than enough.

Of our first 27 nights of travel, we spent 21 nights with extended family in Mexico, Australia and New Zealand. Saving on lodging allowed us to do the extras that we wanted such as ordering that extra bottle of wine, buying tickets at the Australia Opera House, and taking a cab instead of the public bus. But, how on earth did we still manage to spend over twice as much as we budgeted in the first month?

Well, we came up with a list of What NOT To Do when you are setting a budget to travel the world so that you don’t make the same mistakes that we did:

1. DO NOT wait until the end of the month to do your finances. Instead, track your spending everyday. We did not bother to look at our spending until the end of the month, and boy were we shocked. Looking over our month-old credit card receipts, we asked each other, “What was that $54 in Queenstown spent on?” and “How in the world did we end up spending $85 in cab rides?” When you don’t look at your spending each day, its easy to forget that little things quickly add up. A $6 cocktail and a $5 dessert may feel like insignificant costs, but do it every day and you’re looking at a fair amount of money (plus an expanding waistline). Now, I’m religiously writing down every single cost in my notebook, and Jenni and I review it together every night.

2. DO NOT think, “this is only ____ US dollars.” When we arrived in Indonesia, we instantly felt wealthy. In a country where the annual income per capita is about $3,000, most services are incredibly cheap to an American consumer. We spent a ridiculous amount by Balinese standards at the spa. Within one week, we had four body massages, a manicure and pedicure, and a facial. We also ate like kings and ordered three (sometimes four) courses at every meal. But after a week of hedonistic living, we realized we couldn’t do this every day. We were starting to feel incredibly guilty about our $5 massages, and even though each cost seems small they do add up.

3. DO NOT try to see everything in a country. In New Zealand we covered over 1500 miles by car. It was amazing to see the entire stretch of the north and south islands in our campervan, but we also spent a whopping $800 in gas in a week. It’s hard to find the balance between seeing as much as possible and spending time to enjoy wherever you are, but we’re realizing more and more that its better on your spirits and your pocketbook to choose quality over quantity. In Indonesia, I convinced Jenni to give up on trying to see the entire archipelago and instead focus our time on a few places. On the advice of a local, we changed our plans to visit a popular island (which would have cost us several hundred dollars in boat rides) and instead hopped over to a closer island twenty minutes away with fewer tourists, amazing sunsets, and lots of $$$ saved.

4. DO NOT eat in restaurants with English menus as much as possible. We love to eat! When you aren’t in a rush (ah, the joys of not working), it feels natural to order drinks, appetizers, entrees, and desserts. You go in thinking that you are going to have a $5 meal and end up with a bill of $15 each. After realizing that my pants were unzipping while I walked, I knew that I needed to make a change for the sake of my pocketbook and my waistline. The first week in Indonesia, we never ate in a restaurant where there were any Balinese people. Then, a local introduced us to the warongs (local cafes). We had stayed clear of them because we couldn’t understand the menus and we worried about “Bali belly” from the food. But, since we have been going there, we have enjoyed plenty of $2 meals with minimal impact on our digestive systems. Really, the only difference between the warongs and the tourist restaurants is the ambiance and the plates on which the food is served.

5. Save on costs as much as possible but DO NOT be stupid. Last week, Jenni and I decided to rent a scooter because it was a quarter of the cost of taking taxis all day. I thought I could handle the scooter because I had been used to driving on the left side of the road from New Zealand, and its really not all that different from riding a bicycle, right? Well, I was quite wrong. I regretted my decision immediately when I drove into the main road and started facing heavy traffic. Cars, scooters, and livestock were weaving on both sides of me to pass on the road. This was a moment where I wished I had forked out the extra $15 for a taxi.

So now Jenni and I are getting back on track. We’ve gotten more disciplined about tracking our spending, we’ve reduced our daily costs (and caloric intakes), and we’ve slowed down on our travels. We’ve cut out Thailand from our itinerary to save on the expense of an additional flight, and we’ll instead be extending our time in Indonesia and the Philippines. As we continue on our journey, we’ll keep you updated on how we’re doing with finances. Hopefully next month will be better!

Vacation is over. Well, not really. We still are not working!