As you know from reading my book, How to Live Abroad and Thrive with Passive Income, one of the main reasons I can live a lifestyle where I’m completely free to travel and live abroad is because I’m frugal. You can make all of the money in the world but if you can’t save what you make, then you won’t be able to easily sustain constant travel. My monthly budget remains at $1,500 USD per month OR LESS for the last 9 years.
Nearly all of my income comes from passive income streams which pay consistently every month (which you can read about more in my book.) However, this article will focus on my budget and spending, and not on how I make my income.
These days I don’t have to stick to this budget so strictly, but old habits die hard because no matter how much more money I make, I still tend to live quite frugally. Let’s get into it!
For almost all of us, our biggest monthly expense comes from our accommodation cost. If affordable accommodation is not found then we can quickly throw away all of our income just on our rent. This is why I have focused my lifestyle around cheap or free accommodation. When I’m working on my blog I’m able to barter my marketing services for accommodation, food, and sometimes other items like flights, products, and services.
Oftentimes, when I explain the way my blog functions to people, they will assume that it’s something that they cannot do. However, being a travel blogger is not the only way to save money while abroad. Before I became a travel blogger, I found many types of accommodation that were either free, or very affordable and had nothing to do with blogging!
I aim to keep my accommodation between $300-$900 USD per month.
For most people, my recommended approach is to spend time researching in order to find the best deal. A little extra leg work in the beginning can save you thousands of dollars over months of staying in a place. Don’t be quick to fall in love with pictures over the internet. Ultimately, you want something that’s comfortable and affordable. Remember that there are always more options to choose from, so don’t limit yourself. A simple rule of negotiation is that the person who cares least has the most leverage!
With the rise of privately-owned vacation rentals comes with it a lot of flexibility in rental prices. Don’t be afraid to haggle. A recent tactic that I have used is with Airbnb. When you think about it, nearly all of the listings you will find are privately owned vacation rentals. This means that the landlord is sitting on the other side of the computer and all you have to do to contact them is to send them a message. So far in 2020 (and it’s only July) I’ve saved literally thousands of dollars by negotiating lower prices on my accommodation both within the US and in foreign countries.
If someone is not willing to negotiate, go on to the next. I typically send out 10 to 20 messages to hosts in my destination to find the best deal. For example while in Bogota, I negotiated a $2,400 a month luxury apartment down to $400 a month. Granted this was mainly because of the demand being so low from Covid-19, but I promise that it can work in normal situations too!
This negotiation tactic can be used on nearly every platform. Don’t limit yourself to where you can negotiate, I always ask for a lower price in nearly every situation. It doesn’t hurt to ask! This can even work at a hotel so give it a shot and tell me what happens.
Another method for reducing accommodation costs was by staying with new friends through Couchsurfing. for those of you that don’t know, there is a large social network out there called Couchsurfing where you can stay with local people in your destination for free!
Couchsurfing is not only a way to save a ton of money, but it’s also a great way to learn about a local culture. As you can imagine, people become hosts because they’re very excited to share their home with travelers and introduce them to their local culture. I’ve made lifelong friends through this website and would highly recommend it!
Obviously single travelers need to be a bit more cautious with who they stay with. Do a bit of a background check before sleeping with someone. Wink.
Before I became a blogger I was already using the barter strategy to lower or eliminate my accommodation cost. The very first time I did this was in Japan back in 2011. I had just arrived after graduating from University and my plans completely fell through. I had a job that was supposed to supply my accommodation which was suddenly taken away from me and I had to quickly scramble to find something affordable. I jumped on the internet and started looking for guest houses in Osaka. I wrote up an email template that explained what kind of services I could offer, and what I was seeking in return, which was a place to sleep. I sent this email out to probably 10 different hostels in the area and eventually I got a positive response!
We agreed that I could be their private English teacher in exchange for a room which lasted for about a month. Their only requirement was that I spoke with their guests in English and the thing about hostels is a majority of people already can speak English so basically I didn’t have to do much. That being said, the point of bartering is not to scam anybody, but to setup a deal where both sides benefit. Life is all about exchanging value!
Therefore, you can take note of what skills and abilities you have to offer and then reach out to corresponding hosts which would be open for a potential barter. This is still the tactic I use nearly 10 years later, offering my marketing services in exchange for a bed and food. A very comfortable bed these days!
Another option I have used over the years is simply reaching out to people that I know that live in my destination. Maybe you don’t know them well or they’re only an acquaintance but it’s still worth asking around to see if someone will host you. If they can’t personally host you, they still might know someone that can, so it’s worth asking.
2. Food and Drink
A lot of people don’t realize how fast the cost of food and drink can add up, especially in the United States. It’s actually just out of hand, but I won’t rant and rave about this now, we would be here for a time!
I aim to keep my food and drink cost between $250-$600 USD per month.
Eat and Drink Outside of Restaurants
It’s pretty obvious but no matter if you’re in a cheap country or an expensive one, if you prepare the food and drink yourself you’ll save a ton of money. I love to do things myself so cooking just kind of came naturally to me and often times I love what I make more than going out to restaurants in the first place.
Instead of going to that pricey restaurant or expensive bar, make your food at home and go on a picnic. There are so many options to be creative and save money. Ultimately, it’s about your surroundings and your company.
In all of the countries I’ve traveled and lived, I have never broken the bank by buying food at a standard grocery store. Eating fresh ingredients is healthier for you and will save you a ton of money. For example, you can buy a bag of flour for a couple bucks, mix it with water and salt and you’ve created a dough. Roll that dough out, fry it in a pan and you have a piece of bread for .15 cents. This with a couple of eggs and a banana and you have breakfast for around a dollar. BOOM!
Eat at Restaurants
Of course you can still eat out but you just have to make sure that it’s not going over your budget. I usually aim to spend up to $20 USD per day on food. This works out for me because normally I only spend about $5 a day on food and then when I pay more to eat out, it doesn’t break the bank.
3. Travel Expenses
The last and final category for my living expenses come from traveling. This can be traveling near or far whether it’s the metro, a train, or a plane, these all add up as well. Overall, even though it appears that I’m always moving, I’m not. There are times where I jump from country to country in a shorter time span, but on average, I generally take a flight about once a month. Most years I average only about $200-$300 a month in travel expenses!
For our exercise lets aim to keep travel costs between $100-$500 USD per month.
Inner City Travel
You know what’s good for your health? Walking. I basically walk everywhere I go once I am living somewhere. If it’s too far to walk I will look for other options such as public transportation like metro, bus, sharebike, etc, or a ride share service. Overall, I generally avoid standard taxis because they typically cost more than the alternatives.
Something else to note is the fact that I prefer accommodation in the city center in order to save money and time on transit. I like to be in the thick of the action which makes my life more convenient and exciting!
Country to Country
If you have to go long distances, sometimes you have no choice but to take a plane. However, if you’re in a region like Europe, it’s very easy to hop on a bus or train and get somewhere as well. I would recommend a comparison website called Rome2Rio.com in order to see the various options of transport. It will help you easily determine which is the cheapest and shortest in duration.
If you’re bouncing around countries that are nearby, the flights are generally not very expensive. In Asia and Europe I’ve sometimes got flights for less than $30.
I know it’s old news but all of my long haul flights are basically paid for by airline miles. I get credit cards with huge signup bonuses and they typically allow me to take two long-haul flights (over the Atlantic or the Pacific) per year for practically nothing.
As you can see, if you add up all of the averages of the various expenses, you will end up around $1,500 per month. I’ve been doing this for so long that I don’t even really have to think about it on a day-to-day basis, I just automatically fall within this range. Sometimes I go over, sometimes I go under, it really depends on the situation. The beauty of my work is that a lot of the time I don’t even have to pay for accommodation out of pocket so these costs are greatly reduced. However, the moral of the story is that any person can achieve this budget in normal life situations so I don’t want to hear that travel is too expensive!
Go out there and negotiate!