Sunday, February 26, 2012

A Travel Sabbatical Budget

As more and more friends and co-workers discover our impending plans, the reactions are interesting, to say the least. A common question takes the form of, "Wow! How much will this cost?" People aren't usually that direct.

Usually they say things like, "They (my employer) must be paying you well down there in education!" That's laughable, really. What education job has ever been paid well? I'm one of the least paid educators in my department since it's all based on years of employment and experience...none of which I have much of.

Others assume, "You must've been saving money for a really long time." Yes and no. We have saved money, but not specifically for this trip until recently. We save by living in a small house, driving older cars with no payments, not having children, and living a simple, minimalist existence. We live in an ever ready state where we can pick up and go without a lot of "baggage."

Some have been genuinely concerned for our financial state when we get back: "Aren't you worried about the economy. Aren't you nervous about not finding a job when you get back?" Perhaps we should be more scared and nervous, but we're not. Oh, yes...the economy. Not that this would have changed our plans, but we both work in industries that tend to be recession proof. After all, nurses are needed everywhere, and there will always be insurance claims. As long as we aren't picky about what we do when we return, we should have no problems finding employment. An important factor is leaving a legacy of being a valuable employee. Having a recession-proof career means nothing if you are a mediocre employee that everyone is glad to get rid of!

We will be spending what many would consider part of their retirement and/or kids' college fund, which scares the living day lights out of most people. Timing is everything. I agree that I will not want to risk my retirement on travel when I'm closer to 65 years old. However, doing this adventure now, we still have 20+ years left to fund our retirement when we get back. Again, by living below our means, there are more possibilities.

We do have a distinct financial 'advantage' by not having children. This is where I say the obligatory, "...but I will never know the true joy and love of having children." So, instead, we will experience the joy of traveling and connecting with people from all over the world, as an inferior substitute to the joy we will never know. :). However, I think Mike and I are of the mindset that even if we had kids, we would be dragging them around the world with us. My brother and I never held our cash-strapped parents back from moving to California when we were babies, and taking road trips all over the United States, then taking us back go Japan for a year, then another adventure to Singapore for 3 years, and so on and so forth. It all worked out somehow and the experience is priceless.

What is this really costing, you ask? I know what it's going to cost us, but remember that it will be different for everyone. A 20 year old backpacker's budget is probably less than what we're willing to tolerate. A traveler only willing to stay in 4-5 star hotels will need a bigger budget. The largest expense is the transportation cost, but that also varies by the type of transportation and what one is willing to spend. We are also maintaining our household expenses while we are gone. If we didn't have a house to maintain, or if we chose to rent our home, we could decrease our overall cost significantly. We are grateful for our house/dog-sitter who will be living in our home, and that is worth every penny!

We have budgeted $50,000 for an 8-month trip, which doesn't include the expenses associated with maintaining our home. Our RTW tickets and travel insurance cost $10,000 for two people. We have already spent approximately $2500 on vaccinations. We have a budget of $150/day for 8-months ($36,000). This should cover a decent hotel or hostel with private rooms/bath, food, and local transportation such as trains and buses. We are purposefully avoiding the more touristed places that tend to charge a premium. An additional expense that I will be blogging about soon is the private, high-deductible, catastrophic health insurance plan at approximately $200/month.

So, there you have it. Again, it could cost a lot more or a lot less. It just depends on what kind of travel adventure you want. -A