If you're planning a long trip in today's economy, chances are you've got less room for error than you used to. Returning home with big surprises on your credit card isn't an option anymore.
This article will help you develop a rough idea of what your trip is going to cost -- and if you can afford it -- before you fork over any cash. In addition, we've created an easy-to-use calculation spreadsheet to simplify the process even further.
Two of the biggest factors that will affect the cost of your trip are your choices in destinations and accommodations. For airfare, we'll use estimates based on currently available fares. (We'll discuss more airfares in a future article.)
Travel in the developing world is substantially cheaper than the Western world. A week in Hanoi, Vietnam, with a hostel dorm room, food and drink can run you as little as $140 a week. That's about $10 a night for the room and about $10 a day for a couple of meals and drinks from street vendors. An inexpensive room in Melbourne, Australia, plus food can run three times as much. Europe, Canada, South Africa, the U.K., New Zealand -- they're all pricey.
But if heading West is your goal, all is not lost. Be sure check the currency exchange rates. The dollar has strengthened significantly against many currencies, notably the New Zealand dollar and the South African Rand. These Western countries may be worth a second look, if this trend continues. For the latest, currency rates go XE.com.
Hostels aren't just for kids anymore. On a recent trip, we stayed at hostels in five different countries. This cut our accommodation costs buy at least half. Most hostels were decent. A few were stellar. A couple were barely bearable. Check out our review of hostels and guest houses.
We're not big on staying in dorm rooms, so we always forked out for a single. In a Hanoi hostel that bumped our bill weekly room and board to about $200 a week, which is still much cheaper than Australia.
Naturally, if you want to spend $500 a night, you can do that anywhere in the world -- even in a small beachside town in Vietnam.
Flights, Travel Insurance, and Contingency
The cheapest way to fly is to find a special on one of the sites that specializes in long term travel, like Airtreks or Airbrokers. Often these outfits use lesser-known airlines, so get all this information upfront before you hand over a credit card. If you've got more to spend or a travel agent you like, check out around-the-world fares on Oneworld or Star Alliance. Get estimates from a few of these companies and then play them against each other.
For the purpose of this article, we'll assume airfare for a low-cost trip focusing on developing countries at about $3,000. We'll add another 15 percent for traveler's insurance, which will include medical insurance, trip interruption, and evacuation in case of emergency for four months of travel.
At this point, you should have a subtotal for room, board, flight, and insurance. Then add another 20 percent for contingency (in-country travel, entertainment, and miscellaneous items). If this is your first time on an extended trip, you may need to purchase gear, such as a backpack, and other items that could add another $600.