Budgeting for An Extended Trip Abroad
Updated: Jan 5, 2020
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We recognize how incredibly blessed and fortunate we are to even be able to travel, much less travel abroad for a year. We’ve been afforded countless opportunities in our lives, but we’ve also worked incredibly hard to budget, save, invest, and learn everything we can about personal finance in order to make this trip a reality financially.
We will be booking rentals via Airbnb primarily. And their "long term stay" discount is absolutely critical to us staying on budget.
We've booked entire homes (generally apartments) with amenities that we require (kitchen, WiFi, washing machine) near city center in some of the most popular destinations in the world (Barcelona anyone?).
We've been able to do that for under $2,000 USD per month in Europe when we'd be hard-pressed to spend less than that in our home town.
Our monthly budget: $2,000 USD
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Food & Dining
While traveling, we still cook at home a decent amount. It's something we enjoy doing together and is generally healthier than eating out.
One other "budgeting hack" we use is eating lunch out and dinner in. Restaurants automatically charge more for dinner even if the portions are roughly equal just because it's later in the day and people expect the dinner bill to be higher.
Our Food & Dining budget includes coffee, alcohol, restaurants, groceries, snacks, and alllll the gelato Megan plans to eat during our time in Italy. This works out to be just $33 per person per day.
Our monthly budget: $2,000 USD
We decided that Eddie could continue his coursework to obtain a bachelor's degree through an online university. Previously he was going to take a hiatus during our trip but we felt comfortable enough with our finances for him to just continue kicking a** and complete his degree about the time we return from our trip (win-win, as this should make him more competitive in the job market).
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We were able to refinance a remaining student loan balance in order to ...
Save a significant amount in interest
Reduce the monthly minimum payment
(Just to clarify...we almost never make the minimum payment but since this is the experience of a lifetime, we made an exception). If you're interested to learn more about our thought process here, let us know in the comments.
We still have $0 in other debt payments since we don't carry a credit card balance. We charge everything possible to a shared credit card (for the rewards points) and then pay the balance in full every month.
Our monthly budget: $1,142 USD
Once you are "across the pond," flights within Europe are much less expensive. It's important to compare nearby airports and be flexible on your travel dates to get the best rates.
We arrived at our $900 per month budget number by assuming 3 smaller trips at $300 USD per trip.
Our monthly budget: $900 USD
Health & Fitness
This category surprised us a bit. Global health insurance came in at about 50% of what we had estimated! (We blame the US healthcare system for brainwashing us into thinking it should cost an arm and a leg just to maintain your level of health.)
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We expect to walk and hike so much that we don't have the time or energy for a traditional workout. We may slip in the occasional yoga class or hour on the tennis court.
Our monthly budget: $503 USD
Auto & Transport
Before our move, we sold one car and sub-leased the other. This simplified our budget quite a bit since it removed monthly payments, auto insurance, gas, and registration fees.
Using the public transportation at your destination accomplishes two things:
Allows you to experience the place like a local
Saves you money (in most cases)
We budget approximately $7 USD per person for our year-long European trip.
Our monthly budget: $400 USD
Shopping & Gifts
Neither of us is a fan of shopping but we'll still need some things every once in a while.
There are also many occasions to celebrate throughout the year (birthdays, holidays, major life events) and we want to help our friends and family celebrate by buying them something special.
Our monthly budget: $350 USD
This category is more or less a catch all for anything we want to do just for fun. Concerts, food tours, cooking classes, movie tickets, etc. Having a fully-funded Entertainment category means we won't have to think twice about splurging on special experiences in our destinations.
Our monthly budget: $300 USD
We could not be more grateful to Eddie's aunt and uncle (you know who you are!) for taking excellent care of our dog, Miles, while we are away. It was very difficult leaving him and we miss that goofy dude every day but we know he's having fun. Although someone else may be watching him for us, we are still covering every expense from grooming to food to vet appointments to treats.
Our monthly budget: $235 USD
This category includes a 10' x 17' storage unit, inside of which we packed all of belongings we wanted to keep after moving out of our 1,900 sq ft house.
Also included is a subscription to Traveling Mailbox so that we can still read, review, save, forward, and/or shred mail that would've been receiving at our home.
Our monthly budget: $202 USD
We will continue to reserve a small amount per month for each of us to spend however we would like, no questions asked. We believe it's part of a health relationship with money and with your partner.
Our monthly budget: $200 USD
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Bills & Utilities
Luckily our utility bills have been significantly reduced in moving abroad. Electricity, water, sewer, cable, internet, etc. are included with our Airbnb cost (see the "Housing" section above). Also, as we are renting out our house in the US, our tenants will be taking over those utilities for the year.
We do try and use WiFi whenever possible and reserve "data intensive" activities for when we're at home. We generally pay between $120 and $150 USD for the two of us on our cell phone bill. This includes monthly service and device payments on two Pixel 2's which will drop off mid-trip.
We are so glad we were already using Google Fi. It has worked great on the other side of the pond! No extra SIM cards required, texting and data is included while in foreign countries, and calls only cost ~$0.20/minute to the US if they're necessary (which is fine since, who actually talks on pocket computers any more?).
Our monthly budget: $200 USD
We still need tooth paste and such to maintain good hygiene. 'Nough said.
Our monthly budget: $50 USD
There is a monthly fee to hosting this blog and we like to track that separately so there you have it....a new, separate category.
Our monthly budget: $15 USD
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We saved aggressively for this trip. Now we get to enjoy it!
Our monthly budget: $0 USD
TOTAL MONTHLY BUDGET: $8,497
Keep your eye out for our monthly updates reporting how we did compared to our budget!
Eddie & Megan
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