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How Much Money do I Need to Quit my Job and Travel?

How Much Money do I Need to Quit my Job and Travel?

A good friend asked us this lately, and I wrote up a whole Google Doc to answer his question. I tried to keep it brief, I swear! Then I thought this might help someone else, so here it is below.

The context is that our friend is interested in earning a living online so that he can travel and be location-independent. He has some skills and has had a few clients online, but not enough to take the leap and quit his 9 to 5 just yet.

We’re all residents of Quebec, so that is reflected below and the prices are in Canadian dollars (exchange rates here).

How much money do I need to travel?

ie, How much do I need to save before leaving? And how much do I need to earn to keep travelling indefinitely?

  • How much money you need depends how much you spend.
  • How much you spend depends on where you are + how fast you move around, but mostly on your personal spending habits.
  • In short, your spending is flights + insurance/visas + your day-to-day cost of living.

This is a good place to start to get a ballpark daily living budget for different destinations.

You could spend more or less, depending mostly on your spending habits. Going out, restaurants, touristy activities, etc can add up depending on the destination. You could go to the cheapest place on the list and still spend $100/day.

How much did B & V spend?

Here is our spreadsheet showing what we spent during our first year of travel. (actually reduced to 288 days because at that point we “moved” to one place temporarily so we weren’t really “on the road” anymore.)

The “Summary per date range” tab shows what we spent per person in different cities. The gross number in column F includes everything we spent while in a city, so not just the daily budgets but also some inter-city transit (flights, trains, buses) and other expenses.

The Goal budget in column G is the goal “daily” budget for each city, per person. Overall, our net daily budgets (once you exclude inter-city transit and other expenses) were just slightly above this number.

You can see more details of what we spent in each city on the “All spending” tab. At first, we were tracking every cash expense, but then later we would just count:

[what we took out of the ATM] – [cash left over] = [that’s what we spent]

Overall, we were careful to track our budget, cooked most of our meals at home, didn’t go out too much, etc, but we still had a good time, met up with friends, drank, took lots of Ubers, did some touristy things, and we don’t feel like we missed out on anything.

I know it’s a bit messy, originally this was just for us to track what we were spending for our own reference. Let us know if anything is unclear!

How much will you spend?

You could spend more or less than we did. If you want to live cheaply and maximize your runway, you can stay in each place for 1-2 months at a time and live well for $1000-1500CAD per month + the cost of travel. This means your daily living expenses could be $33-50, which is plenty in most places if you live simply. This is especially true in places like:

  • Vietnam (sooo cheap)
  • Thailand (especially the North. We were in the “more expensive” South, you can still get plenty of restaurant meals there for $4-6)
  • Indonesia (we spent $300/month for a room in a nice villa, $60 for a scooter. Food was ridiculously cheap, $1-10 per meal in restaurants. Surf board rental is $5 for a half-day, a coconut on the beach is $1.50)
  • Malaysia
  • Philippines
  • Eastern Europe (depends where, but some places like Bulgaria are ridiculously cheap http://coworkingbansko.com/)
  • South America! We haven’t traveled there enough to recommend many specific places yet 🙂 Coming soon!

As a rule of thumb, if you’re somewhat careful with other costs (transportation, food, etc), expect your accommodation to be 40-50% of your total daily spending. For example, if you can find accommodation for $15 per night, a reasonable daily budget for that city might be $30 per day.

We found almost all of our accommodation on either Airbnb or Hostelworld.

The best deal we found for long-term travel insurance for Quebec residents is World Escapade, here. (Most big insurance carriers that offer long-term travel insurance, World Nomads for example, won’t cover Quebec residents. Lucky us!)

We really just wanted something so we wouldn’t go bankrupt if one of us (probably me) needed to be hospitalized abroad.

How much do you need to make to keep traveling indefinitely?

Eventually, if you want to keep traveling forever, you’ll need to make enough to cover your expenses + taxes. This calculator estimates personal taxes for Canadians based on different income levels.

(Try not to cry comparing Quebec to the other provinces)

Hopefully, you’ll pay less tax by deducting business expenses, etc. But this should be a conservative place to start for now.

In short, if you’re careful you can travel and have a great time for $20-25K per year. Since you pay less tax on lower incomes, you only need to make $30K to have $25K after tax. You could spend less than this if you need to.

How you make that money depends. The goal would probably be to have a few ongoing contracts, or a few really big one-time contracts/projects per year.

But if you wanted to consider a worst-case scenario, if nothing else works out and you’re really stuck, a little bit of income goes a long way when your expenses are so low.

There are jobs like teaching English online at a place like VIPkid. It would probably suck… but even at $14-17USD per hour there, you could cover a big part of your living expenses working 15-30 hours per week.

How much do you need you save before you leave to travel?

This depends on you, how risk-averse you are, and how long you think you’ll need before you’re making enough money to cover your expenses.

I’d say:

  1. Conservative option: enough to cover all travel & living expenses for one year
  2. Medium: Enough to cover all travel & living expenses for 6 months
  3. Tight: If you already have some stable income that will continue for the next 3-6 months (Say a $500/month ongoing contract), you could leave with 3 months’ travel & living expenses + enough for an emergency ticket home if needed. But this isn’t ideal.

I’d recommend somewhere between options 1 and 2. If you’re having trouble getting to 2, I would plan to reduce expenses while on the road, for example staying somewhere really inexpensive the first 2-3 months and focusing on work until you get some income built up. Even better would be to have option 2 covered + secure as much income as possible before leaving.

Would you like to make more spreadsheets?

Why yes, I would! Here is a template to track your cash-flow, so you can imagine how long your savings will last at different spending and income levels.

Note there are 2 tabs, a really simple version and a more advanced version. Make a copy and play with the numbers in green to see how they affect your bank account balance.

I hope this helps! Let us know if you have more questions 🙂 

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