Red Wood Forest – California
Budgets are a personal thing. Some travelers may be independently rich, retired on Social Security, or completely broke with just a backpack full of everything they own. The good thing is there is a way to travel and see the world on limited budgets and certainly with unlimited budgets. I can’t say that I ever really had a chance to travel at the luxury level, so I probably won’t speak too much about it, however I have had the fortune of being a business traveler for many years. I learned a lot about travel and travel rewards programs that I will share in the coming chapters of this book.
I would classify my family’s road trip around the U.S. as a moderate travel budget. We spent the bulk of our nights living for free as housesitters, and nights between housesits we either stayed with friends or stayed in cheap motels, usually around $40 per night on average. We stayed for as little as $10 a night at a casino in Nevada and as much as $100 in the oil rich section of Texas, between El Paso and Dallas. All the contracted oil field workers have driven up the price of lodging in this neck of the U.S. Though I will say, that was the only place we couldn’t find a place for under $60 in 38 states.
We would keep our meals low budget by hitting grocery stores/farmers markets and keeping a box of food under my wife’s feet. If you’re going to travel with kids, you’ve got to have a bunch of food on hand or things can get real grumpy, real quick.
Most Americans have very little savings and live paycheck to paycheck, making traditional travel and vacations tough to fund, without going further into debt. The focus of this book isn’t to travel like you are on vacation, spending money like it’s going out of style and trying to get your money’s worth in a short amount of time, but rather to travel moderately, smartly and in which a way that can be sustained for weeks, months and years. The shoe string and moderate budgets are probably the most common budgets, and this includes retired folks on a fixed income. I’m focusing on this demographic because that’s what I know. Luxury Travel I don’t really know, other than some extravagant business travel at times and I’m sure there are plenty of blogs and books out there with folks that really know this market, I’m not one of them.
Golden Gate Bridge – San Francisco, CA
First of all when making the decision to jump into full time travel, don’t do a Pros/Cons list. It’s easy to make these list and easy to find a million excuses not to jump in. Focus on these lists, and you will never leave the house. Plus you’ll find out pretty quickly that all of the things you thought you know will go out the window in the first week or so. Including your preplanned routes, etc. More on that to come.
Now for the “real” first thing you should do, write out your current monthly expenses. Don’t be scared by your list of expenses, the next exercise will show you the true potential of traveling full time. Now subtract out all of the expenses you will no longer need to pay once you eliminate the rent or mortgage, the cost of rent or mortgage, utilities (Water, Gas Electric, and Waste), land line, internet service, cable television. My savings was around $2,000 per month. My worst case scenario would be to not have a house sit for a month. In this case I would need a cheap motel each night for a month, meaning I would need ~$1,500. Still $500 less than my rented townhouse. Not bad and should probably ease your fears a little, right?
Any remaining items on your list you will need to cover each month, using savings, retirement, social security and continued income. This could include, cell phone, Wi-Fi hot spot, health insurance, life insurance, car/RV payment, auto insurance, school loans, credit card payments, fuel and food. You may not have all of these, just listing out the possibilities. You may find substantial savings in some of these categories depending on where you plan to travel. For instance buying local health insurance in most counties is much less than U.S. health insurance. Also, you may be able to use some of the money you are saving each month to pay down student loans and credit card debt. Hopefully many of you don’t have this debt, but chances are most of us do, I know I do.
Sea Lions on the Pacific Coast Highway – California
You now have a monthly budget to follow so you’ll now need a way to manage it. I actually kept my local PA bank, but make sure your bank offers online banking. I can’t imagine that there are any banks these days that don’t offer online banking, but make sure. It’s tough depositing a check in PA from Guatemala! Use bankrate.com to compare banks, it’s also a great way to find auto loans and credit cards.
If you’re planning to travel internationally, make sure you understand your banks fee structure on international transactions. Your bank may charge you per transaction on any purchase made outside the country. It may be a small fee, but over time it can add up to big bucks. For U.S. readers, and I realize that not all of you are, you may want to consider a Charles Schwab account, which refunds any international transaction fees to you, saving a lot of money over time. For readers from other countries, do a little digging, I’m sure there must be a similar offering in your home country.
We utilize an app called Mint, which is available on Android and iPhone, and tracks all of your bank and credit card accounts in one spot. You can set up budgets by category, making it easier for you to track how you are doing against your new budget. Your banking transactions load into the app and are auto categorized, though you have the ability to re-categorize any transaction as you see fit. More on other travel hack tools and apps to follow.
I hope that you have found through this budget exercise that you really do have options and I hope that you have found some savings that have inspired you to make the plunge into full time travel and homelessness by design. I can’t speak for all of you, since we all have different cost of livings, debt levels and geographic variation, but we found that eliminating a good chunk of our monthly expenses and hitting the road full time was doable, exhilarating and over all a cost savings.
Frequent Traveler Programs, stick to brands (flight, car, lodging)
Pacific Coast Highway between San Fran and LA
What I learned from my business travel days, is that brand loyalty has its benefits, especially when you’re not footing the bill. I would consistently use the airline, American Airlines, the same hotel brand, Marriott and the same rental car company, Hertz. However; this loyalty was based on my company paying the bills, nowadays, you will find me on Frontier Airline, Choice Brand Hotels and Dollar Car Rental or using sites like skiplagged.com, that allows you to book flights using your connecting flight as your final destination, it’s a little bite risky if the weather is bad, you could end up getting diverted to your booked final destination via another connecting location and you probably don’t want to check a bag, unless you can talk the ticketing agent into checking your bag to your connecting location.
The benefit of brand loyalty is the rewards programs, and as you escalate a brands program, usually in a Silver, Gold, Platinum format, you unlock additional benefits and savings as well as the rate at which you collect points. For instance at Marriott, anyone above the Gold level receives free internet service in their room, as well as access to the Concierge Club, where you can typically get free breakfast and in some cases free dinner. The benefit of loyalty with the airline is, the ability to check bags for free, board the plane ahead of the crowds, and access exit row seats during online check in. Also, free upgrades to first class, become more frequent as you work your way up through the program.
An additional note about Frequent Travel Programs, you may be offered free magazine subscriptions for unused points, very common with Delta Airlines program and some programs, like Marriott, may send you a catalog of goods that can be purchased with your points. They offer televisions, spa packages and golf clubs to name a few examples. Not a terrible use of points in some cases. Can’t say I ever bought anything from the catalog, but I was able to book a very nice room, for a week, at the Marriott Vacation Club at the Marriott World Hotel in Orlando, FL just outside the gate of Disney, saving my family a ton of cash. The price you pay for spending most weeks away from my family, not so sure that’s the best trade off?
Make the most of your purchases, credit cards
Swiss Family Robinson – Disneyland – California
Most brand loyalty programs, like the Marriott and American Airlines rewards programs, have their own credit cards, which allows you to earn more reward points with your daily purchases, that can be traded for free hotel stays or airline tickets. Many of the business travelers I knew, would pay for meals outside of the hotel with their Rewards Credit Card and then charge meals to their room when eating inside the hotel. Nice little trick to rack up additional points on your meal purchases. A similar approach can be used with Airline Reward Credit Cards. Use these cards for daily purchases and earn frequent flyer miles that can be traded in for free flights. Sometimes using the Airline Rewards Card to purchase flights will come with the benefit of lower cost or additional point generation to be used on future frequent flier trip bookings.
There are folks that spend a tremendous amount of time learning the ins and outs of credit card and points programs to maximize their benefits and in many cases travel for free most of the year. The forums at Nomadic Matt and Zero to Travel Podcast have sections dedicated to this topic. Rolling Stone recently did a piece on a gentleman, who has been manipulating the airline industry points system since the age of 16 years old. He now spends most of his time traveling around the globe from airport to airport, though it kind of sounds like he rarely leaves the airports. I recently read a similar story about a girl who lives on a train, traversing the US constantly. People have creative ways to put a roof over their heads. There’s no right or wrong way to do it. Find a way that works for you and ride it till the wheels fall off.
Here’s the link to the corresponding podcast: Episode 2 – Learn the Art of Full Time Travel
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