When you’re planning the big trip, the one question you will have to tackle before you start packing is how are you going to finance your adventure. Setting a budget may seem like a daunting prospect but, in reality, the answer is right there in front of you.
Many people will turn to the internet to try to get answers from others who have already gone through this process. The problem is that it’s like asking how long is a piece of string. While it is a great idea to talk to others about how they fund their travels, in reality, everyone is different. What suits one family may not suit another. We all have different needs, wants and, dare I say it, standards of living. How on earth do you determine what budget will work for you and your family?
Fortunately, you probably have a pretty good idea of what it costs you to live at home, or you could figure that out relatively easily. Will it change all that much when you’re on the road? To some degree, it will but your existing costs of living are a good place to start when budgeting for the trip.
To get you started, we’ve listed the main things to consider when putting together your individual big trip budget.
Earning an income
Unless you win the lotto or you have a generous benefactor to fund your trip, you’re going to have to have a regular income of some sort. For older travellers, that will mean relying on the old-age pension or your superannuation if you’re a self-funded retiree. For younger travellers, you may have saved up enough long service leave to ensure a regular income. Many arrange for their employer to pay their leave at half-pay to make it stretch for longer periods of time. These are all fine but if you haven’t got enough regular income to finance the trip, you’re going to need to earn more along the way.
Many travellers chase employment while they are on the road and they are able to do this quite successfully if they have the necessary skills. Fruit picking, contract work for local councils, nursing, teaching, these are all readily transferable skills that are in demand across the country. With a little planning, you can organise your trip around pre-arranged temporary employment. Consider this need to work may limit your travel experience somewhat, especially if you’re on a limited or fixed timeframe.
For many travellers, earning a regular income may not be possible so you’re going to have to have saved up sufficient funds to draw down from for the duration of your trip.
Existing financial commitments
Just because you’re on holidays doesn’t mean all your existing financial commitments will just disappear. If you haven’t sold your house, there may still be mortgage payments to make, insurance, rates and certain utilities that will all need to be covered. If you’ve put your furniture into storage, those fees will also need to be taken into account. If you’re renting your house out, that may supplement and even eliminate many of these ongoing costs but be aware you still need to pay rates, landlord insurance and any repairs to the house.
You’ll also have other ongoing expenses to consider. Health insurance, ambulance subscription and any health-related expenses such as prescription medications or regular therapy requirements. No matter how small or how infrequent these expenses may be, the more you take into account now, the less likely you’ll be caught short later on.
Vehicle running costs
The costs of running your car and your chosen form of mobile accommodation will also need to be budgeted for. Here is where you’re likely to have increased costs over what you may be used to living at home. For instance, if you’re towing a heavy caravan, your tow vehicle will likely require additional maintenance over and above the standard fixed-price servicing. More frequent oil changes, new tyres, automatic transmission servicing, even regular cleaning costs will need to be factored into your budgeting.
Another importing thing to check is the level of insurance cover and whether or not you’re covered for extended time away from home. If you are involved in an accident, or your car breaks down, will your standard insurance cover towing of both your car and trailer? You should consider taking out top-level roadside assistance to supplement your insurance.
Vehicle repairs and major failures
No one likes to think about the worst-case scenario but, when you are relying so much on your rig, you will need to have a contingency in place in the event of a major failure. For example, to replace the fuel pump in a Toyota Landcruiser V8 costs around $1,400 plus labour. Replacement fuel injectors cost around $400 each and you have 8 of them! An engine rebuild or replacement may cost $20,000 or more. If you don’t have this sort of money just sitting in a bank account, will you be able to get your hands on that amount of money in a short timeframe?
Food and Alcohol
Just because you’re on an extended holiday doesn’t mean you’ll suddenly eat and drink any more or less that you currently do at home. We would recommend budgeting for similar levels to your current food and beverage consumption. That said, you should keep in mind that in some regional and remote areas, these costs may be higher than what you’re used to paying in the big cities. For example, on a recent trip to Onslow, WA, grapes on sale at the local supermarket cost $32 per kilo! Unless you’re the Bush Tucker Man or the world’s luckiest fisher-person, don’t expect to supplement your food requirements in a significant way by living off the land or sea.
We all start out our big trips with the grand idea to free camp as often as possible. Some even start out saying they will never stay at a caravan park. Trust me when I tell you, those intentions will not necessarily translate into reality. At some point, you will need 240-volt mains power and access to washing facilities. The novelty of keeping batteries charged up and disposing of your own excrement wears out after a while. Long stays in caravan parks are inevitable. That said, you can reduce your costs somewhat by doing a little planning. You can use smart-device apps like WikiCamps or Google Maps to see what accommodation options are available at your next destination and compare rates and reviews. Many towns offer low cost, short term parking for self-contained RVs. Take note of the peak holiday periods across the country and consider timing your visits during the off-peak. Joining one or two caravan park chains such as Big 4 and Top Tourist is a great way to get discounted rates. They will likely have an upfront joining fee but this can quickly be recouped over time. House sitting is another great way to reduce your long term accommodation costs. By combining all these, you could reduce your average nightly accommodation budget to between $25 and $35 per night depending on how much free or low-cost camping you can do in between caravan parks.
The cost of fueling your rig is unavoidable especially if you’re continuously on the move. And no matter how economical you think your vehicle is, once you load it up with all your gear, hitch a big van on the back, drive in the heat of summer with the air conditioner running along Australia’s less than fantastic roads with a 30kph headwind, it’s going to chew through the fuel at a mind-boggling rate. If you’re travelling to remote areas, the cost of fuel will be higher than the big cities. It’s difficult to say how much you should budget for as everyone’s rig is different but it’s fair to say whatever your average fuel bill is now, expect to double it when your travelling.
Whether you rely on Medicare, pay health insurance or choose to pay your own way as you go, you’re going to need to factor medical expenses into your budget. To give you an idea, my wife and I are fairly healthy but, in the last 2 years, we’ve had to have two ingrown toenails removed, one broken tooth repaired, several non-bulk-billed doctor visits, ongoing prescription medication, occasional temporary medication for allergies, colds and other ailments, and first aid supplies. We’ve been lucky. Other travellers we know have had to deal with much more serious medical situations that could have severely restricted their movements had they not had health insurance or the funds set aside to pay for these expenses.
If you think feeding and caring for your human family members is expensive, try taking pets along with you. I’d hate to think how much money we’ve spent on our dogs. In addition to their food, they have their own medications, regular vet visits, washing and grooming and, sadly, their own medical emergencies. Something as innocuous as a grass seed can turn into a $300 vet bill. You also need to be prepared for the worst possible situation. One of our dogs managed to get her teeth into a cane toad in Bitter Springs, NT. That resulted in a mad dash to the nearest vet, over 100km away in Katherine, five hours trying to save her and finally her crossing the rainbow bridge. Apart from having to come to terms with the grief of losing a dear pet, we had a $3,000 vet bill to deal with.
Communications and technology
We barely think about the costs of all our mobile technology when we’re at home but, on the road, it can be a major expense. There’s the monthly fee for each phone and any associated data charges. You may get by with the small amount of data you get with the average phone plan but if you want to do a lot of streaming or you have children doing distance education while travelling, you will need a lot more. Then there’s the cost of the hardware. No matter how careful you are with your gear, you should factor in the cost of repairs or replacements in the event of damage or loss. We had a very expensive laptop computer fail on us last year, costing $2,500 to replace.
It would be a pretty boring holiday if you didn’t experience the various tourist attractions on offer at the places you visit. Trouble is this will cost money too and, some of the big-ticket items on your bucket list are going to be very expensive. You can try to have this money put aside for when the moments arrive but, if you know where you will be and what you want to do while you’re there, you could consider paying in advance, before you leave on your trip. That way, all you have to do is turn up and enjoy the experience.
We’ve already covered mechanical and medical emergencies but you will also need to consider what might happen if you and your family suddenly have to return home. It’s not nice to think about it but if there’s a death or serious illness in your family back at home, what are you going to do? At least one of you may have to fly home while the other(s) either stay in place waiting for your return or drive back home. You may all need to fly home and have your rig trucked home. Whatever the situation, you will either need a credit card with a decent limit or some money accessible at short notice.
Setting a budget
Now that we’ve identified the major expenses of this big trip, the next step is to budget for it. Everyone will have a different way of doing this but, personally, I’m a proponent of the KISS principle. Keep It Simple, Stupid.
In the months before you leave for your trip, put some money aside into a separate bank account and build up an emergency fund. Consider having at least $20,000 in this account. This should cover almost any mechanical, medical or family emergencies.
Next, use your regular household expenses as the basis for your big trip budget and break it down to either a weekly, fortnightly or monthly periods, whichever works for you. Each period, take out this budgeted amount in cash and divide it out into individual envelopes for each expense. For example, we use one each for food and beverages, accommodation, fuel, dog stuff and ad-hoc expenses. Pay for everything in cash using only what you have in these envelopes. Only use a credit card when you have no alternative.
You’ll find the amount you use each week from each envelope will vary depending on how you’re travelling. If you’re moving each day, your fuel costs may be high, but your food and accommodation costs may be less. Any cash left in each envelope at the end of each period can either be left there as a buffer for the next period or transferred to make up a shortfall in other expenses. You may need to make some adjustment in the first few weeks but, eventually, you’ll find a budget that works for you.