Occasionally some folks will sheepishly inquire how much we spent to wander the world for a year. I suspect others have wondered as well but feel uncomfortable asking. For the sake of this public blog, we will highlight the means and methods of accounting for this adventure. If anyone is interested in the nitty gritty detail and total cost, please do not hesitate to reach out to me via email: azbdad@gmail.com. We would be glad to share more directly.
Before I get in to the nuts and bolts, I wanted to touch on a critical factor that made this trip a success - Nicole and I are complete opposites in a perfectly synchronized way. She hates cold and wet, I hate hot and sticky. She can't eat seafood, I'll take it raw or cooked. I hate cooking, yet it's her happy place. Cleaning dishes is therapy for me, and a necessary evil for her. I'll push the envelope, and she will pump the brakes. She can keep the trains running on time, and I'll just go with the flow. I love numbers, and she can dance. When she's at her wits end, I will step up, and vice versa. On this trip, she was the COO, I was the CFO, and we both took turns being the CEO. It was perfect teamwork.
As my role as the CFO (Chief Financial Officer), I established a detailed budget prior to the trip, then meticulously accounted for every penny we spent. I created a spreadsheet that would make an accountant swoon, complete with concatenated formulas and sumif statements. I wanted to ensure that our fixed bucket of funds would take us all the way to the end. I'm proud to say that we were on time, and under budget!
How did I gather this data?
Wherever possible we used our credit card to buy EVERYTHING (note, we used Chase Sapphire, which was awesome and had no international transaction fees. At 3%, that can add up quickly). We avoided cash wherever we could (although Southeast Asia and Japan made that tough). Every other week I would download our credit card transactions and put them in a Google Sheet. I would then tag each transaction with a location and a cost type.
I developed a humorous code system (so that I wouldn't forget it): L.M.F.A.O.
L = Lodging
M = Mobilization (any cost to get around within a destination - rental car w/petrol, subway, bus, Uber, etc)
F = Food
A = Activities (ie tours, attraction fees, etc)
O = Other (ie souvenirs, sundries, petty cash)
Additional Categories
G = General (expenses that crossed over all destinations - ie. travel insurance, online school, luggage, phone bills, cloud storage, computers, etc)
FL = Flights (any cost to get from one destination to the next - which sometimes meant a train)
You like pie charts? I do. Here you go...
Coming in under budget was actually a bit of work to achieve. Unlike short term vacations where we can be fast and loose with our expenses knowing our revenue stream is still intact, we kept a close eye on our budget. We didn't live like paupers, but we also didn't stay anywhere luxurious. We cooked at home a lot, and made many picnic lunches (budgeting $100/day for food). We stayed outside of most cities where lodging was cheaper, and almost exclusively stayed in an Airbnb (or Booking.com) apartment or house. (Our target was to keep lodging to less than $150/nt, which for five people, wasn't easy). We were judicious in the activities we did, yet at the same time, I don't feel like we left anything on the table. For instance, the $500 expense to take a 20 minute trip to the top of the Burj Khalifa to look at a large swath of desert was nixed in favor of an all day trip to the Atlantis Waterpark for half the cost. We got so good at it as a family, that our kids would often say, "That's the equivalent of 10 ice cream treats per person. Let's pass...." If nothing else comes of this trip, at least they have a solid sense of value.
How did we fund this trip?
Patience, restraint, sweat equity, and a bit of luck. In 1998 (at the sprite age of 23), Nicole and I took a personal loan from her late grandfather to purchase a dumpy little condo in Alameda. We set about renovating it as best as we could. Little did we know that we were about to ride a wave of real estate escalation the world had never seen. Three years later we sold the condo and moved to a dumpy 4 bed home in Pleasanton. We fixed that up, and three years later, sold it, and bought a dumpy 5 bed home in the Oakland Hills. We fixed that up, and three years later (2008), with the housing market in shambles, we kept it, moved out, and started renting it. Five years later, after the market turned, and we grew tired of being landlords, we sold it. The proceeds went in to a fund titled: "World Trip (don't touch)."
Fun with Numbers:
My diligence in coding all expenses opens up an interesting study on the relative cost difference of spending time in different parts of the world. There are several indexes out there that help to bring light to the relative costs of different countries, with the most curious and surprisingly accurate one being the Big Mac index (https://www.economist.com/news/2018/07/11/the-big-mac-index). It ranks the cost of purchasing a Big Mac in every country. But what it boils down to, (in my research), the most telling indicator is the median income / minimum wage of a country or region. Labor costs drive the cost of everything, which is why it's so cheap in South Africa and most of the Southeast Asian countries, and so darn expensive in places like Iceland and Norway.
One thing to note about the relative cost difference between locations: When we found ourselves in an "expensive" place like London, Paris, New York City, we took it as a personal challenge to see how frugal we could be without sacrificing our journey. Hence, these locations are artificially low. It's actually a testament to how there is always a way to travel anywhere, as long as you're flexible. (Conversely, in "cheap" places, we actually spent a little more to live the good life).
If anyone wants the cost ranking, please reach out. We're happy to help.
All for now... Next Post: Thinking about... "How to Use Airbnb (for Hosts, and Guests alike)"