How to Make Your Money Last

I get a lot of questions about travel in my inbox, but none more so than how I’ve made my money last so long.

Telling people I have been traveling for three years (Note: Now ten. And also, where the hell did the time go?!) usually makes them think I’m rich. How else could I afford to travel for so long?

I’m not rich and I didn’t win the Powerball! The truth is there’s no secret to travel and there’s no real secret to making your money last, either.

The way to make your money last is to be smart and realistic about your budget, and to do your research.

When I first started traveling, I watched every penny and cut every corner. While I sometimes lavishly spent money like it was going out of style, I made up for it on other days and always stayed on a budget.

There are, of course, unforeseen circumstances (like dropping my camera in the water and needing to buy a new one), but overall, I usually stay close to my target. This is because I start with a realistic set of spending expectations.

Here are 5 steps you can follow to make your money last while you’re on the road:

Step 1 – Know what you’re willing to spend money on. 
When I travel, I don’t budget a lot of money for accommodation, tours, or even transportation. I find the cheapest accommodation around or I couchsurf. I don’t take a lot of tours and I walk everywhere.

But I do budget a lot of money for food and drinks. Why? Because that’s what I want to do. I didn’t spend every night at home so I could fly to Australia and not go out, nor did I head to France to make meals in a hostel every night. No, not me. I came to live! I came to eat and drink in the culture!

If you can eat all your meals in a hostel kitchen then a small food budget is for you. If you plan on couchsurfing every night of the week, then you don’t need to account for accommodations. If you are flying to Europe and know you love to drink wine, you should expect that you’ll probably buy some wine. Be realistic about what you want to do with your travels.

Step 2 –  Research and plan before you go. 
When you know yourself, it’s easy to create a long-lasting budget, and this is where pre-trip research comes in. When I started planning my trip in 2005, there wasn’t a lot of information online like there is now. I spent a lot of time reading guidebooks and searching for any information I could find about prices. I pieced together an intricate spreadsheet of how much I would spend each day in various places based on how much I could save and what I found online.

Maybe you don’t need to go that crazy  — but if you want to make your money last, you need to know exactly how much you think you’ll spend.

Too often travelers get blindsided by unexpected costs and their budget cracks quicker than Humpty Dumpty. Sure, something will always happen that you don’t predict, but people mostly get blindsided by stuff they should have anticipated. “Wow! That tour is so expensive. I blew my budget.” “I didn’t expect drinks would cost so much!” “This place is more expensive than I thought.” You hear these comments on the road a lot and my response is usually: “Why?” So do your research.

Step 3 – Create your ideal budget.
Maybe this budget is too much for you to afford in reality, but it’s important to know what you really want to spend money on and create a budget that reflects that desire.

It’s so easy to come up with that budget, as you can find prices for anything you want online and in guidebooks. There’s no excuse for not knowing how much the things you want to do should cost.

Step 4 – Match your expectations to your economic reality.
I cut lot from my ideal budget and itinerary based on how much I knew I was going to actually save for my trip. If I wanted to do things that totaled $10,000 USD but was only going to save $7,000 USD, then I had to make cuts to match my financial reality. Here are some good articles on saving money to help you:

• 22 ways to save money before you travel
• How to avoid bank fees on the road
• 17 steps to planning your perfect trip

Step 5 –  Keep track of all your expenses.
Finally, after you have created your realistic budget and set out on the road, you need to track all of your expenses. The people who have to go home early are always the ones that have no idea how much money they are spending on the road.

By tracking every expense — from hostel dorms to that snack you bought — you can see if you’re on track or if you’re overspending (in which case you can correct your spending).

This is the most important thing you can do make your money last!

If you only do one thing, track your spending! Sure, you have to remember to do it, and it’s easy to forget, but actively doing this will ensure you become better budget traveler, and soon it will become a habit.

Your budget will only last as long as you planned it to last. If you planned your budget well, it will last until the end of your trip.

Do I ever go over budget? Sometimes. I make up for it on other days. But it’s a lot easier to make up an extra drink than a tour to Great Barrier Reef or constantly going over your accommodation budget — and by planning and tracking like a financial ninja, those things are not likely to happen.

And it all begins with a simple pen and paper.