With just about 2 months left until we head back home, I thought this would be a good time to do a financial update and let you know where we stand.

For those who don’t know, we saved $50,000 for our planned year-long trip. We initially thought we would need around $125 per day. However, it only took us a few weeks to realize that this was far beyond what we actually needed. We quickly recalculated and then automated our financial setup so as to alleviate any concerns about overspending our budget.

Here’s a quick update of where we currently stand.

The key line is the blue one. How much money do we have left? We’ve spent just about 50% of our planned $50,000. Overall, this is great, as we’re now about 75% through the trip. The $25,000 also already includes our plane tickets home, as well as quite a few non-travel related items.

Next, let’s look at the budget by country:

We’re currently in our second stint in South Korea, and the cost is averaging just about the same as our first stint here.

The most amazing country on that list is Japan. In only 7 days we managed to spend over $1,800. My favorite stat of the trip is the fact that we spent nearly 40 days in Vietnam and spent $1,800 and in only 7 days, spent the same amount in Japan.

Regardless of Japan, we’re still averaging less than $75 per day. On an annual basis, that’s about $27,000 for 2 people and only $13,700 per person. That amount continues to amaze me. Who would’ve thought one could travel for an entire year for about $13,700?

Overall, the good news is that we’re doing better than our initial plan. The bad news is we’ve already planned on traveling more when we arrive back to the states. So the money will continue to dwindle. It will be interesting to compare our costs once we’re back.

On the first sheet, you may have noticed the “Revenue” line item. Unfortunately, nearly all of this money is from this year’s tax returns. However, there is $100 in the revenue bucket that is attributed to our first advertisement sold on this blog. It was an exciting time to see our first money earned since leaving cube-land roll into our Paypal account.

As always, if you’re really interested, you’re more than welcome to download my entire trip finances spreadsheet. It contains all of this information in far more detail. It can be downloaded here.

Image credit: dolphinsdock

Possibly Related posts:

1. Automating Our Travel Budget
2. Budget Update from Seoul
3. Money Update – Through 2 Weeks

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The quick summary is that things are going well. Below is a country breakdown of what we’ve spent so far. I’ve stripped some expenses and categorized them elsewhere to try and make things as comparable as possible. However, there are some shopping expenses in Thailand and “Mainland China #2″ that make those numbers slightly inflated.  In “Mainland China #2” we also had unusually high transportation costs due to a 24-hour train ride to Beijing and an overnight ferry to South Korea.

On an overall basis, we’re 38% through our year-long trip and have spent only 25% of our money. We continue to try and spend around $100 a day here in South Korea, which is far more difficult to do than it was in China or Southeast Asia.  Rent on our apartment, however, is a very reasonable $16 per day.  Factoring this into our expenses, we should be able to keep the overall budget.

If you’re curious as to where the “revenue” came from, I would love to tell you it’s from us working or this website, but unfortunately it’s essentially just Sharon’s and my own tax refund.

Finally, here are just a couple budget related thoughts:

• While I’m glad we have an overall budget per day goal of around $100, it would have been wiser to set country targets instead. It would have been irresponsible to spend $100 per day in Southeast Asia, but is definitely reasonable to spend that much in South Korea. Setting the country targets could have been done only after a couple days in each country, or could have been done arbitrarily based on some sort of percentage.
• While there are some expenses incurred which skew the data slightly, I believe the country order we show is accurate. The cheapest country we’ve visited was Vietnam followed by Cambodia, Thailand, and then China.
• I was surprised to find Thailand being relatively expensive. Food, alcohol and even housing just wasn’t that cheap in the cities we visited. Perhaps we could have eaten at less expensive places, but I believe with the amount of tourists that visit, prices have been inflated.

If you’re interested in seeing all of the detail (or perhaps just REALLY bored at work), our Trip Finances spreadsheet is available for download.

Possibly Related posts:

1. Automating Our Travel Budget
2. Financial Update – 9 Months of Travel
3. Itinerary Update

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The “Twitter” answer is that we determined how much money we wanted to spend on a bi-weekly basis and then had that amount transferred automatically into our checking account every 2 weeks. Here’s how we did it:

Determining The Bi-weekly Budget

We started by looking at our target spend per day. After our pre-trip expenses, we were left with a budget of $127.68 per day.

On a weekly basis, this gives us $893.78 and on a bi-weekly basis this gives $1787.55.

If we planned on spending every one of the $50,000 dollars, we could setup our budget around spending $1787.55 every 2 weeks, but we’ve decided to hold some of that back for other potential expenses (i.e.  traveling beyond a year). After discussion, we decided on 80% of the $1787–it’s an arbitrary amount, but it felt right.

Automating Our Budget

Now that the amount to be deposited on a bi-weekly basis has been determined, the last step was to automate our budget to this amount. The reason we’re able to do this so easily is that we pay cash for essentially everything. Credit cards are typically not accepted and we get a great exchange rate by using cash. By transferring money from our savings account to our checking account, it’s practically impossible to go over our budget. Sure, we could overdraw our checking account, but it’s easy to prevent that when you get a receipt with every withdrawal.

Our Savings Account is ING and they make it very easy to automatically deposit money into our linked checking account on a bi-weekly basis. 5 easy steps:

1. Determine the ING account to draw from (You can setup multiple sub-accounts)
2. Choose the checking account you’d like to deposit the money into
3. Input the amount you’d like to withdraw
4. Choose the frequency with which you’d like the money to be deposited
5. Select the date you’d like the deposits to begin

It takes a couple minutes, but now our budget is automatically managed for us.

We’ll be monitoring our daily spending to ensure we’re staying within our budget as well. But because life just seems to get in the way of these monotonous, boring tasks–as a safeguard we’ve setup our ING account and checking accounts to manage our budget for us. If the money’s in our checking account, we know we can spend it guilt-free.

How can you apply this to your own Finances/Budget?

In an extreme example, you could also manage your entire budget in this fashion and spend cash only.

You could also manage certain portions of your budget with this method, such as eating out, groceries, entertainment, etc. A good method I’ve read about is called the “envelope method“. The method I’ve described above essentially creates a virtual envelope.

Download our full Trip Finances spreadsheet

Possibly Related posts:

1. How we saved $50,000 and are now traveling for a year
2. Financial Update – 9 Months of Travel
3. Budget Update from Seoul

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For the trip, Sharon and I saved $50,000. Divided by 365, this gives us $137 per day. However there were some up-front costs that reduces this daily amount. Here’s the breakdown of all of our pre-trip expenses:

With all of the pre-trip costs accounted for, that leaves us targeting roughly $130 per day. Here’s how the first couple of weeks broke down:

And how things look overall:

Considering that Vancouver and Hong Kong are cities on the more expensive side of our planned trip, I’m very happy with how well we’re doing. In Hong Kong, we even had a $90 doctor’s visit for Sharon (not a big deal, just a lingering staph infection she wanted to have checked out – all cleared up now).

Now that we’re in mainland China, we’ve had days where we’ve only spent a combined $50 or less. $2.50 meals and $25 per night hostels sure are nice! This should leave our budget in even better shape for the next update.

If you’re interested, link to download my spreadsheet with all of the details.

Possibly Related posts:

1. Financial Update – 9 Months of Travel
2. Budget Update from Seoul
3. Itinerary Update #3

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The question I’m going to answer in this post is how we saved up so much money. While this post is specific for planning a vacation (or mini-retirement), it’s applicable to saving for anything: wedding, car, house, boat, etc…

The “Twitter” answer is automation. As soon as your paycheck hits your bank account your money should automatically be withdrawn and go into your savings. Here’s how you can do that:

Step 1 – Figuring out how much you need to save
When Sharon and I first started thinking about the trip we put together the following table. This gave us a few different scenarios based on how long we were planning on staying, how much we wanted to spend per day and how long we had to save.

We ultimately decided that around $60 per day was a good amount. (Although the more research I’ve done, it sounds like this is on the higher end of how much money is needed — which is great because the money will last longer!)

This spreadsheet will also tell you how much money you need to save per paycheck. Which is the key to the next step.

Download the savings spreadsheet (.xls)

Step 2 – Automating the savings
Now that you’ve determined how much money you need to save, the most important step is automating the savings. By using the spreadsheet, it will do the math for you on how much you need to save per paycheck. The key to saving, is to have it automatically come out of your paycheck or bank account, otherwise it just won’t happen.

To enable this, I recommend setting up an ING Direct account. They have pretty good interest rates, and they also allow you to setup multiple sub-accounts within your primary account. The sub-accounts are great for creating different account buckets to save for different things. For example, I had a sub-account that I saved for this trip, grad school, and a house down payment. All of these sub-accounts automatically pulled money out of my primary bank account the day my paycheck arrived.

Extra’s
Another great way to throw in a few bucks now and then is when extra money arrives. Your annual IRS refund is a great example or if you get a bonus from work. Even small things, like a mail-in-rebate check, you can throw into savings. These are all examples of unplanned money that your budget most likely doesn’t count on. If you can normally manage without it, why not just save it?

Step 3 – Let the automation roll
Depending on how much you’ve already saved and how much you want to save, it may take a while to get your target amount, but the great thing about this method is it’s guaranteed. Once you turn on the automation, you can begin counting down to your own dream vacation (or house, or car, or whatever…)

Feel free to leave a comment if you have any questions.

Possibly Related posts:

1. Traveling For A Year Isn’t Luck
2. Automating Our Travel Budget
3. Financial Update – 9 Months of Travel

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