There are three main things to talk about when it comes to planning a RTW trip and money: saving, budgeting, and spending. Althugh I guess that really applies to anything involving money, huh? Anyway.
Saving money can be hard, especially when it’s such a large amount. Since we were lucky enough to work in an industry that pays well and we have no real obligations (no mortgage or kids or student loans), I won’t say too much about the actual process of saving money, though Kevin does give some ideas in the last section of this post. Instead, I’ll just say this: would you rather drink fewer coffees each week and save that money for beer and noodles in Tokyo or have your Starbucks? Obviously I’m simplifying, but the thing is, if you really want to save for it, you can. It just might take awhile.
Budgeting is a much tricker subject, depending on what kind of lifestyle you want to be living on the road. Kevin and I will be splurging mostly on activities – like the safari through Africa, paragliding (me) and skydiving (him) in New Zealand and snorkeling in Thailand. For us, we’d rather stay in a cheap hostel and eat our meals on the street market and be able to DO a lot of activities instead of staying in four star hotels and eating at nice restaurants every day. (Though that does sound nice, I would totally do it if we had unlimited money.) So if our plan sounds like yours, then I have three links for you. The first is from a site that I referenced more than any other site while planning this trip. It has country breakdowns with budgeting numbers for each country. The second was the venerable Lonely Planet, which also has numbers per country. The third was this site, although I believe it takes a lot of its numbers from the first site. When the sites gave me different numbers, I usually took the higher of the two, just to be safe. Outside of planning the daily expenses, you also have to consider any extra transportation costs outside your RTW ticket (we’ve estimated about $5,000 of other plane rides and major train rides) and money for gear, shots and visas (another estimated $5,000 for the two of us).
So really, the question of how much money you need is an intensely personal one, but if you’d like to see our budget spreadsheet, just email and ask, we’d be glad to send it over. Also, after this trip is over, we’ll try and post a breakdown of how much we spent and what we spent it on.
This section isn’t exactly on spending per se, it’s more about how to take your money with you when you go on your trip. Most people agree that traveler’s checks these days are almost useless, especially with so many more ATMs available. We’ll be taking a combination of US Dollars, ATM cards and credit cards.
For ATM cards, the Visa network is more prevalent worldwide, though you certainly will find places that only take MasterCard. We will be taking a Visa ATM card linked to a Capital One Money Market and an HSBC MasterCardATM card linked to an HSBC Online Payment Account. We actually opened up accounts for the express purpose of using them while traveling. Since Capital One and HSBC don’t charge foreign transaction fees at all and HSBC reimburses you for three third-party ATM fees a month, our ATM fees should be minimal.
For credit cards, we’ll be using (again) Capital One, because they don’t charge any foreign transaction fees AND they refund you the 1% fee that Visa charges.
Though I think Capital One has the best policy for international credit card use, there are better ATM cards that we, sadly, are not eligible for. Some credit unions are extremely generous in refunding third-party ATM fees. Check out this table to see if you’re eligible for a better card.