Skip to content
Home » Budgeting for Joy

Budgeting for Joy

Last night, Craig and I had whiskey-scented lobster with caviar for dinner, while enjoying world-class service and a spectacular view of the city. A splurge? No! It was in our budget.

We’re traveling the world to have epic experiences, so of course, epic experiences are in the budget. In this case, we used some of our leftover entertainment funds from last month.

This is how you get to the restaurant — by teleferico to the top of Monserrate
The view from our table after sunset
Dinner: Lobster with caviar, mashed potatoes, spinach, and mushrooms stuffed with escargot. (great dinner, sorry for the lousy photo!)

My budget is like a Ford Escort GT — it’s for people who want all the sporty extras but don’t want to pay for the base car.

My day to day life on the road would meet the poverty standard at home for sure. Last night I huddled under three woolen blankets because my hostel wasn’t heated. I have  slept by a fan with a damp washcloth spread over my body because I didn’t have air conditioning. I just spent two months without hot water. When I’m lucky, I have access to a washing machine, but I’m still drying my clothes on a line. I don’t have a car; occasionally I take a cab , but most days I’m hoofing it. No more cute shoes for me! Oh, and  everything I own fits in a backpack. I own four pairs of pants and spend exactly $0 on recreational shopping these days.

My actual budget 

My budget for rent, utilities, and wifi has shrunk to $450 a month. That pays for a room in someone’s apartment with shared kitchen privileges, or a bunk bed in a hostel dorm room, when I travel alone. Pooling resources with Craig means we can afford a small tourist apartment in most cities. For $800-900 a month, we typically get running water, a space heater or woodburning stove, a comfy bed, a fully equipped kitchen, all utilities and wifi. We don’t travel with high expectations for hot showers, fluffy pillows, or luxurious bed linens. We’d rather have a great location than luxury accommodations, but we do look for comfortable furniture since we have to work at home all day.

Skimping on the home front means can spend our money on the things we love. Here’s my personal budget; Craig and I have been matching 50/50 on the road, so these numbers are doubled for the two of us (and life is more comfortable with two!):

  • $450 each for lodging
  • $350 each for travel (flights, trains, taxis, etc)
  • $200 each for Entertainment (epic adventures like mountain climbing expeditions, treks, scuba and sailing lessons as well as movies, concerts, etc)
  • $125 each for groceries (cooking saves us a ton of money)
  • $225 each for restaurants (It would be a waste to travel and not be able to afford to try the local cuisine!)
  • $150 each for ‘miscellaneous’ things like cab fare, laundry, etc.
  • Total: $1500 each

All expenses roll forward, so if we only fly every other month we can spend up to $700 each on flights, or we can use the excess for entertainment, to take a trek or something.

Living this ‘high life’ that people are envious of and think they could never afford costs us about $1500 each per month, or $18,000 per year — and we could do it on less if we had to.

South America was a great place to begin, because things are cheaper here. Yesterday, we rode the bus for a quarter, Craig got a $2 haircut, our lunch was under $10, and we spent the whole afternoon watching folk dance, hearing live music, and visiting a museum for free. Our lovely apartment here will cost us $800/month, including all utilities and wifi.

I love it. I feel like this budget reflects my values and the way I would like my life to be built. I am personally without health insurance at the moment, but I was without it in the US for decades as well, that’s part of being a self-employed American. If a chronic condition arose, I would qualify for Medicaid (ugh!), but for now I’d rather just take advantage of affordable healthcare in the countries we’re visiting. Minor health complaints and dental care will fit easily into our ‘miscellaneous’ budget. We’ll see what healthcare reform brings for my future.

We both have some personal expenses outside of the travel budget. Craig maintains a car at home, is building a retirement fund, has health insurance, and a storage unit. I have a little budget for sending gifts to my kids and friends back home, and continue to grow my retirement fund as well. We both occasionally treat the other to a date or gift, using our personal funds. (My contributions tend toward the occasional cheap lunch. Craig is able to be much more indulgent.)

For me, a budget that reflects the life experience I want wasn’t a totally new concept. Years ago I made the decision to live in a cozy little duplex, drive only cars I could pay cash for, and use my money to get out of debt, save for the future, and enjoy my life — which, for me, meant dining out, theater, and travel. My budget now is an extension/exaggeration of my budget in the US.

If you’re dreaming of a life on the road, I’d like to reassure you that it is easier and more affordable than you can imagine. The preparation looks like this:

  1. Spend as little as possible on your house and car. If you’re currently making big payments, get out from under that ASAP.
  2. Get out of debt. Stop living outside your means, and start paying down debt every month.
  3. Once you’re out of debt, build your savings, and start learning to invest your money.
  4. Start traveling. You need to get comfortable with making living arrangements in foreign countries, handling currency, and communicating, and you need to know for sure that you’ll enjoy traveling. It’s very different from vacationing, you’re not staying in sheltered resorts or lying around on the beach all day with servants. Set aside $100 a month and you can afford one major trip per year. I used the money most people spend on cable TV and internet service for their phones to take two trips per year for eight years before I left the country permanently.