Budgeting is a topic that comes up a lot. If you want to read how we budget for full time family travel, read on!
What does it cost a family to travel full time?
When I was researching how we could afford to travel full-time, the most common advice I read was to budget around $100 USD per day. That works out to be around $130 AUD per day, or $910 per week/ $1820 per fn/ $3943 per month (all figures will be in AUD throughout this post). We have found that to be true for us as a family of 5 travelling in south-east Asia.
I knew that $1820 per fortnight was achievable for us, but what I really wanted to know was what portion of that money went to what? I knew we’d have different overheads to track compared with being at home, but what were they? These are the budget categories that we track now as a full-time travelling family and what they replaced:
- Accommodation – in lieu of mortgage payments
- Flights – in lieu of household expenses such as electricity, internet, water, rates, etc.
- Travel Insurance – in lieu of contents insurance
- Food – has remained the same
- Local Travel – in lieu of fuel, and is much cheaper
- SIMs (mobile phone & internet) – stayed the same
- Sightseeing & Entertainment – about the same as what we spent back home
- Education – about the same
- Souvenirs & Postage
I’ll outline the first three in more detail below. Aside from food they’re the biggest expenses.
I don’t want our accommodation to cost any more than what our mortgage payments are back home. So with the rent now covering the mortgage, that has freed up the same amount of money for accommodation. We aim for around $50 per night, and we’ve managed to come under that for the past 4mths in south-east Asia.
This has been a little tricky to predict. Flights out of Australia are expensive (up to $500 per person), but once in south-east Asia it can be less than $100 per person to fly to the next country. We don’t always fly, either. Overland transport comes from the same budget and it can work out to be much cheaper. Any visa costs come out of this budget as well. So at the moment I put aside around $230 per fortnight. We spent our entire 3-month visa-free period in Malaysia so we have managed to save up quite a bit in the Flights kitty so that we can afford a big leg to the USA or UK later in the year. Travelling slowly is absolutely key for us to being able to afford this lifestyle as we’re able to spread out big costs and save up gradually.
I took researching travel insurance seriously. I ended up looking at 15 different providers and narrowed it down to two. After reading their PDSs closely and comparing them, I settled on one provider I liked. I then compared the two policies that the company offered and decided on The Works policy by TID insurance. This is one of the more expensive policies out there but I liked its coverage. So we budget for $2145 per year for travel insurance, or $82.50 per fortnight. I Googled a 10% discount code to get it more cheaply, but I still budget for the full amount just in case. We paid for 6 months up front, however that was too big a chunk of time – we need more flexibility – so we’re going to pay for smaller periods in the future.
The rest of the expenses really depend on the family e.g. how much you eat, what you eat, how often you go out & where, what educational needs your kids have, etc. For us, around $800 per fortnight covers our day-to-day living expenses.
I opened an online saver account for each of the big 3 categories – accommodation, flights, and travel insurance – with our regular bank. I then set up fortnightly auto-payments to go from our main account into those so that on pay day the savings are tucked away into the right places. The $800 for everyday expenses gets automatically transferred to our new Citibank account, and we use that for everyday transactions and for getting cash. We chose Citibank because they don’t charge foreign transaction fees like our regular banks do. Any money left over stays in the main account for any unplanned purchases.
Before we left we needed to cover our launch costs. Our launch costs included:
- new passports for the children ($139 each plus passport photo costs)
- renewing passports for ourselves ($277 each plus passport photo costs)
- $900+ for 6 months travel insurance up front (although next time we will get 3mths)
- $2300+ in flights (one way) to fly out of Australia
- a night or two of accommodation for when we arrived at our destination
All up, I’d say we totalled about $5000 in launch costs alone, plus we had a month’s worth of accommodation ($1500) set aside so that we could pay for somewhere up front, as well as 2-4 weeks of our travel budget set aside. We managed to spread most of the above expenses out over a few months in the lead-up to launch. We had bought the kids passports the year prior.
The crossover period
We needed to have enough money to cover the ‘crossover period’ as well. That’s what I call the period where we needed to cover both the costs of travelling and the costs back home until the house was rented. How long this period lasts for varies. For us, it ended up being about 2 months, when we had budgeted for 6 weeks maximum. We thankfully had some fudge factor.
We also have money set aside in case of an emergency. We have travel insurance, but sometimes a claim is paid as a reimbursement, so we have ensured that we have enough money to cover flights home for all of us if needed, plus a bit extra.