Budget Round the World Tour (1/3): How to save money?

How much money is needed for a world tour? How do I set money aside for a trip? I tell you everything in this first part of a series of 3 articles

Part 1: Before the round-the-world tour

How to put the money aside?

Already, we are lucky enough to have jobs with responsibility and the Parisian salaries that go with it. During our 10-year career, we put our money aside to buy an apartment in Paris. Finally, we preferred to give up this project to travel, but we will talk about the dream of an apartment a little later.

One year before the round-the-world trip, we put even more money aside than usual because it is a question of not buying anything anymore (exit the accumulation), but rather selling everything. The sale of all the furniture and stuff in our little apartment in Paris allowed us to pocket 3000€, enough to pay a large part of a round-the-world ticket.

To save as much as possible, the idea is to define a reasonable amount you want to save each month. I say reasonable because depriving yourself too much can have the opposite result: you get fed up and spend your money in an expensive restaurant, whereas buying a restaurant once in a while doesn’t cost more. Then, we set up monthly automatic transfers, say, for the 6th of each month. That way, as soon as the salary comes in, a large part of the salary is transferred to the savings accounts.

Savings accounts such as Livret A, sustainable development, PEL, etc. have ceilings. You have to fill up to the maximum the passbooks offering the best interest rates, then you fill up the remaining passbooks. The A passbooks are generally the most interesting with a high ceiling, JB and I have one each. We put them in savings accounts that are easy to withdraw.

Be careful with life insurance, the money placed on it isn’t easy to withdraw (you lose money when you try to withdraw). It is more, as its name suggests, a life insurance rather than a standard savings account. Advisors get a nice commission when you open a life insurance policy, so be sure to ask before you listen to their advice. For retirement, for example, we invest in riskier options that aren’t immediately available.

For more security (you never know), we have bank accounts opened in different banks. It costs us 8€/month in the bank where we have a credit card; and 0€/month in the bank where we have no means of payment other than bank transfer. This way we don’t put the eggs in the same basket, and in case we have problems with payments abroad/blocked accounts, for a reason x or y, we can always turn to the other bank.

How much is enough?

The budget depends on the duration of your trip, the number of people, the destinations chosen, and the comfort you want for your world tour.

I already told you about my little Excel for the round-the-world itinerary. I have entered in this small Excel the minimum and maximum cost of living per day for each country I wish to visit.

This data is available on the routard.com website with 3 budget levels: cheap, medium and high. I usually take the low budget for housing and the medium budget for food (I like good food). Routard’s data are very reliable (except for South America where you have to estimate yourself the inflation of around 30%).

I noticed that the travelers on the forums did not give reasonable budget estimates. Some, to put forward their resourcefulness to find good deals (while they book a year in advance, which is impossible for world travelers), others to scare us while they sleep every night in a hotel… or simply because they went there 3 years ago while Asia is experiencing double-digit inflation. So trust Le Routard!

I then modulate my trip according to the cost of living of each destination to arrive at a reasonable amount. For example, I would have liked to spend more time in New Zealand but with the estimate of 150€ per day, I put the number of days that I thought was enough (27 days) and spend quickly in South America.

What is your budget?

As an example, our all-inclusive round-the-world budget (all flights, round-the-world tickets, accommodation, visas, food, visits etc.) is estimated at between €33,000 and €42,000 for two over 11 months . The round-the-world ticket alone cost us 3800€ per person.

This budget is higher than other world tour operators because :

we spend an eternity in New Zealand, Chile, Argentina and Cuba (where it’s expensive)
we also add a round trip to Cuba (500€/person), impossible to fit in the Round the World ticket
we often eat in restaurants
apart from South America and New Zealand, we take double rooms in hotels

It is also necessary to take into account :

a budget Dollars to exchange before leaving, to be used in case of emergency (withdrawal impossible, closed banks…). Let’s leave on 2000USD.
a budget for the return, would be only to buy back the furniture, pay the real estate agency, the first months of rent while waiting to find another job (in case you quit to travel). Let’s leave on 3500€ for Paris.

Honestly, if we hadn’t been saving for the apartment for ages, we wouldn’t have been able to put all that money together in a year. However, if you don’t have the budget you need for your world tour, you can reduce either the length of your trip or the number of countries you visit because air travel is a very important budget.

Payment and withdrawal abroad

Being a client of Société Générale for years, I naturally went to see my advisor who fully supports my project and who offered me the international option at 17€/month. I know that there are other cheaper options (Revolut, N26) but I am already a client with them, I already pay bank fees every month. I gave my advisor the list of destinations with dates. I bother her every time I leave a country. Recently, she alerted me to a fraud and immediately sent me a new card.

As it’s a bit complicated, I explain the number of cards we have:

JOINT ACCOUNT IN A FRENCH BANK: Main account for the round-the-world trip. This account is fed via regular transfers from savings accounts. This way, if there is fraud, the loss is controlled. All the expenses of this account are checked every 2 days. Are associated with this account
- VISA PREMIER card with International Option for Anh
- Normal VISA PREMIER card for JB : to be used only in case of emergency
NEO-BANK private account n°2
- MASTERCARD GOLD card for JB, to be used only in case of emergency

When withdrawing/paying abroad, with the International option, Société Générale applies 0 withdrawal fees, 0 commission. However, if the bank abroad for example ANZ in New Zealand charges me NZ$3 for each withdrawal, I have to pay them, Société Générale will not cover them. Moreover, I checked the exchange rates, they are good.

Before the trip around the world, I also reviewed the withdrawal and spending limits on my cardwith myadvisor.

Update 2018

Since then, we are at Revolut and N26 (see the comparison here
)Revolut costs us 0€ and we opted for the 9€ option at N26 (the 0€ option also exists at them).
The Revolut is a VISA card and the N26 and a MASTERCARD, it’s good to have both.
The stressed out person in my life likes to control any movement on my card. With Revolut and N26, you can activate/deactivate your card live (via an application) depending on its use (ATM, online payment…). I highly recommend it!
We also have two American Express Platinum cards that give us access to airport lounges and an American Express Gold card to collect miles and enjoy the benefits of

What about the apartment in all this?

Ironically, a few months before the world tour, we came across the apartment of our dream, in La Rochelle. In the end, we won’t have enough money for an apartment of our own, but a rental investment, yes (we talked about it here).

We still had our two jobs, 0 loans in progress, our loan file went through without a hitch. As soon as we get back from the world tour, our apartment will be finished, and we can start renting it. All the calculations have been made so that this apartment costs us nothing: i.e. the amount of the rent = amount of the monthly repayment + charges + insurances + taxes. We were able to take a loan where the repayment only starts after the apartment is rented. Wonderful isn’t it?

Practical application: TO DO LIST before the world tour

A few years before the world tour
- Opening of all types of savings accounts
- Opening of at least 2 accounts in 2 different banks (we never put the eggs in the same basket)
- Setting up automatic transfers to fill savings accounts
- Implementation of expenditure alert systems (expenditure alert 500€, 1000€, 1500€…) to control your monthly expenses
- ~~Ask to pay taxes once a year instead of monthly (optional)~~
One year before the round-the-world tour
- 0 new purchase, you think of emptying your interior and reselling everything (see my advice here)
- We update our Excel file (template to download here) with the average expenses/countries reviewed -> define the itinerary
At least 6 months before the round-the-world tour
- Buying a round-the-world ticket (practical guide here)
- Start following the dollar/euro rates to find the best time to buy the dollars
- Benchmark of international payment options
2 months before the round-the-world tour
- Ask for new payment cards (so they won’t expire during the trip)
- Think about how to hide your cash during the trip (purchase of a belt, pocket, secret scarf, etc.)
10 days before the round-the-world trip (or earlier if you have an online bank)
- Review withdrawal/payment limits
- Activate the International option
- Give the dates of stay in each country (if relevant)
- Buy dollars

See you soon for the rest (money management during the world tour, and after the trip)!