Budget Planning Puzzle Pieces

We were using a shared Google sheets file for 2 years to plan budget details for this trip:

Airline Tickets – Around the world tickets are not a great deal. Once we priced our trip, the cost of our individual tickets came out to be almost the same as if we bought RTW tickets. Buying separate tickets gave us more flexibility and less risks and we could spend 2 summers in Europe. There is no advantage of buying tickets more than 3-4 months ahead. For now, we only got our tickets through the summer. We started our first leg of the trip (from Seattle to Buenos Aires) on airline miles and saved about $6,000 there. We also got our tickets through South America as one connected ticket over 1+ month span and saved about $2,000 doing it this way vs. getting all separate tickets. This means that we got one ticket to fly from Uruguay to Peru, then Ecuador, Colombia and finally to Barcelona. This is a less flexible option, carries certain risk with it, but it was the cheapest option. We also got our tickets to Galapagos with Lufthansa miles. BTW, Lufthansa miles are the worst miles ever: their taxes and fees are often as expensive as a regular ticket price. We never care about the length of flights or layovers. We go for the cheapest option and then the best time. Airline tickets make up 20% of our overall budget, and we’ve already spent 40% of it).

Accommodations – Things happen, life throws curveballs. We did not want to plan our accommodations more than 3-6 months ahead. Some reservations had to be made way ahead (e.g. Kruger National Park in South Africa) but most did not. Accommodations for 5 are harder and considerably more expensive to make than just for Pedja and me. Also, seasons play a role in how far in advance we need to book. We are staying mostly in AirBnbs, small hotels via Booking.com, and some hostels. We are not into luxury travel. Most of our accommodations are places with less comfort than our own home (less space, fewer rooms/beds, poorly equipped kitchens, etc). If we had more time, we would probably utilize other options – home swaps, pet/housesitting options, longer term local rentals, etc. However, balance between time and money is always hard to achieve. We will stay with family about 1-2 months of the total 18 months of travel. Accommodations costs are 30% of our overall budget..

Transportation – Last summer, Pedja bought a car for us to use in Europe during this trip. Every year when we visit, we rent a car for 1-2 months. However, with him being there for 3 months last summer and us planning to be in Europe two summers in a row for total of 3-5 months, we decided that purchasing our own vehicle made more financial sense. This was made possible by our family members that took on a burden and risk of purchasing this vehicle in their name, storing it when we are not using it, taking care of it, etc. We don’t usually do this for our regular summer trips, we would rather rent a car and not worry about it during the rest of the year. In this case, it made sense. We will sell this car at the end of our 18 months.

Car rentals – We didn’t plan to have a car in many places. We’ll rent cars in several locations but we will mostly utilize public transportation and ride-share options. We are currently planning to rent cars in Ecuador, Spain, South Africa, Australia and New Zealand. Most countries do not require international driver’s license, but a few do. We got ours through AAA and it’s valid for only 1 year. Pedja’s license will expire towards the end of our trip and I’ll just have to be the main driver for those last few weeks. We’ll also need to take full insurance coverage on most of the rented vehicles since we don’t have any car insurance at home.

Other local transportation – public transportation is usually the cheapest option in places we’ll be in but anything times 5 is considerably pricier. For example, train from Madrid to Barcelona is a great option for 2 (when Pedja and I went by ourselves) but times 5, makes no sense. Renting a vehicle for that quick trip is a better option for a family of 5. Getting taxis or Ubers presents another issue. We always have to get 2 vehicles. It all adds up. Regardless, we’ll utilize local public transportation as much as we can. We’ve estimated transportation costs to be at about 10% of our budget, including that of the transaction costs for the car that we have in Serbia).

Food – we are looking forward to all the new foods we will have the opportunity to try. We will not be able to cook as well on the road as we do at home. Most AirBnB kitchens are not well equipped (and have no basic things such as salt, oil, etc.). We also cannot eat out every meal of the day, not even once per day. Management of food on the road takes a lot more of our time and money than we initially anticipated. It’s easy for Pedja and me when we are alone but not when there is 5 of us. We don’t shop for each of our kid’s favorite foods, but even so, we have to pay attention to food costs more than we thought we would. Our food budget is considerably higher than the average monthly income in [some of] the countries we are visiting. It will be interesting to see how well we stick to our planned food budget. We forecasted that about 20% of our budget will go to food.

Spending $/Venues/Events – living in Seattle for 18 months requires a considerable amount of spending $ (kids’ extra curriculum activities, camping, skiing, clothing needs, entertainment, etc). This will be different during travel but it’s still needed. We are traveling light so we’ll need to flip some percentage of our bags’ contents from time to time. Maki will hopefully outgrow all of his clothes. We’ll hopefully be able to ski for a few days next season. We’ll go on our regular trips to Greece with Pedja’s family. We’ll have our family reunions in Bosnia. Kids will take some classes. This is all included in our spending budget that’s currently planned as 10 % of our overall spending.

Other fixed expenses – travel health insurance, telephone, homeschooling classes and subscriptions – 10%

Seattle house expenses – life insurance, house and cat upkeep – We were lucky that Snezana is renting our house and taking care of our cat. She is a real Saint. Leaving our life behind for this long was a lot easier knowing that she’ll be there to hold the fort down. Also, half of our basement is rented as short-term rental via AirBnB and I manage it remotely. Our plan was to not depend on any income from the house, just have the house cover itself. That’s still the case. We have also seeded our life insurance account for the next 18 months and those transactions are going through automatically without my involvement.

In summary, this is what we have planned as distribution of expenses for the next 18 months:
Airline tickets: 20%
Accommodations: 30%
Food: 20%
Transportation: 10%
Spending $ / Venues / Events: 10%
Other fixed expenses: 10%

I track what we spend in the app called Trail Wallet (only for iOS) and then cross reference it with our main budget plan in Google Sheets. For the first month in Buenos Aires, we were ever so slightly under budget in all categories which was helpful because we could then make an unplanned small donation to a good local cause.

Update after 10 months of travel: We are still slightly under budget.