December 21, 2011

What About the Money?? Step 2

Step 2: What do you need to save??
How much to bring with you?

This can either be the hardest or the easiest part of your financial planning! This will probably be the shortest post in the money series, because this is the one that we have the least information about so far. 

After you know how much you need to leave behind, you need to know how much to bring with you! For the purpose of this blog, we're just going with what we know - work travel. Since we do plan on earning an income while we're away, calculating the amount needed can be a bit tricky.

** Side Note** If you're planning on traveling extensively with no income, this number will be both higher and harder to pin down. Sites like THIS or THIS can help you with long-term travel budgeting.
{Tip here: over estimate. You’ll ALWAYS spend more than you’re expecting}

Here are the steps that we used to help create our budget while we're away. But more importantly for now,  it will help us create our SAVINGS PLAN for the next couple of months before we leave.

1.       Decide on the basic elements of your plan, then estimate the costs
Since we know that our trip will include travel & training in addition to regular living, here are some examples of what we’re spending our money on…
a.       Flight to Florida x2 people
b.      Safety courses x2 people
c.       Food costs for 1-2 months
d.      Transportation costs for 1-2 months
e.      Lodging costs for 1-2 months
                                                                          **This is SO EXPENSIVE! We’re considering everything from B&B’s to hostels…
f.        Entertainment costs for 1-2 months
                                                                          **Yes, you’re going to go out for a beer. Yes, you’re going to want to buy those new sunglasses. Don’t forget to budget this in – or it will screw you over later!

2.       Add 10 – 20 % more money. The amount you estimated in #1 is not enough.
There are always lots of unexpected expenses. 
My travel theory in general is: Less Stuff, More Money.

 Access to $$ as Money: When travelling, access to money counts as money sometimes. If you have a credit card that’s not maxed out, an open line of credit established, un-cashed investments or even a family member who’s willing to help you out in a pinch – you have access to money. This is not as good as saved money – but it could save your ass if you need it.
**Side Note** If you even HAVE 'access to money' take a quick moment to be grateful. Access to money is not common around the world and financial fragility is one of the leading elements of poverty.

Q: But Dana – Your dates don’t line up! Why are you planning for 6 months of home expenses, but only 1 -2 months of traveling expenses?
A: Wise observation my friend. We are planning on working asap on our travels and bringing in money. BUT we don’t want to count on that money to pay our home expenses until we are comfortable making it. If we only make enough to pay our food and accommodations the first month, we still want to know that we’re safe at home. Just an extra precaution.

This is article 2/4 on the finances for this trip. Read More about Money:


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