This budget summary is brought to you by Rebtel

Well, we’ve been on the road for a few days now, and it dawned on me that we never quite finished our pre-trip “how-to” type posts. So today, we’re officially releasing our daily budget.

Our daily budget for two people is $100 Canadian Dollars per day. This figure includes airfare, food, lodging, new clothes, replacing stolen cameras, and each and every other expense we may incur on the road.

To keep on budget, we have the following tricks up our sleeve that we intend to use at some point:

• Volunteer in exchange for food and lodging, or a portion there of.
• Avoid pre-arranged tours, and the tour operator’s cut.
• Save on local and international calling. Use free online calling options offered by various providers.
• Travel overland where possible, avoiding expensive flights.
• Buy groceries and cook for ourselves more often than not (we love cooking anyways).
• Do our own laundry.
• Don’t buy “stuff” unless necessary.
• Couchsurfing.
• Stay in locations long enough to get a good price on accommodation. Often there are discounts for stays of a week or longer, over a month apartments can generally be rented cheaply.

Our running daily total can be found on our statistics page. Ashley diligently writes down our expenditures in a little notebook and later transfers them to a nifty little site called budgetyourtrip.com, so we always know how far above or below our goal we are.

Country Summary (so far):

These numbers do not completely jive with our goal, as they do not include airfare, or other transportation between countries.  But none the less, they give you an idea of what it costs by day for the two of us country by country.

Mexico: $51.80 CAD
Guatemala: $43.04 CAD ($24.97 excluding Spanish classes and camera replacement)
Belize: $42.44 CAD
Honduras: $52.97 CAD ($25.28 excluding diving)
Costa Rica: $52.68 CAD

The Motherload of Budget Grocery Shopping - only 50 cents a meal

I grew up living on top of a grocery store.  Literally.  My parents owned a small town Saskatchewan grocery store with living quarters upstairs.  Grocery shopping as a kid consisted of running down stairs at supper time to pick up the ingredients mom required.  Anything we wanted was always on hand.

Needless to say, after I moved out there has been a gradual evolution of my grocery shopping habits.  When I first moved in with Mike, I drove him nuts trying to buy and keep on hand anything I might feel like for supper on any given day.  After I overcame that little compulsion, I developed fairly average grocery shopping skills – I didn’t go overboard on items, but I also didn’t pay too much attention to how much something I wanted cost.

After we made the decision to travel, there was yet another evolution – budget shopping.  Pretty much everything I buy now is on sale or somehow discounted.  Take last weekend’s grocery trip for example – I took full advantage of the 10 for $10 sale at my nearest Coop Marketplace.  I loaded up on boxes of pasta, bags of perogies, frozen chicken cordon bleus, canned meat, and nearly everything else I could get my hands on for $1.00 each.  All said and done, I ended up with 111 individual meals (or 55 meals for the two of us) for only $55.  Not too shabby.

What about when we feel the need to splurge?  Not a problem – consider Valentine’s Day.  In true Frugal February fashion, we forwent the fancy meal out and splurged at home – Veal Parmesan (for $1.25 a cutlet), homemade pasta (thanks to Mike), homemade tomato sauce (using canned tomatoes that were about $1.00 a can), and chocolate lava cakes.

I even got a box of Valentine’s chocolates – post V-day at 70% off, of course.

Bottle of Coins

For roughly the last 10 years I’ve been emptying the loose change from my pocket and tossing it into a novelty sized beer bottle piggy bank.  I never seem to miss the stuff, so it’s been an easy way to save.

After our recent unexpected expense we decided it was time to open that sucker up and see just how much was in there.  My initial guess was somewhere between $500 and $600 dollars.  Turns out I was right on the money.  Ashley declined the chance to speculate.

During our last visit to the bank we picked up a stack of paper coin rollers for free.  Finding some time in the evening, we sat down at the table and got to work.  Right off the bat things were not going well for me.  Having never really rolled coins in bulk before my technique was terrible.  Coins kept getting stuck in the tubes sideways, and I was mangling the paper edges quite badly.  After some colourful language, Ashley showed me the way.

For your benefit I’ll try to explain:

Ashley’s Technique.

1. Count out the coins you are going to put in a roll.
2. Cup your hands, and shake those coins lightly.  This gets them to start lining up and speeds up the next step.
3. In one hand, line all the coins end to end the way they would fit into the roll extending from the edge of your outstretched fingers towards the palm.
4. Take your free hand and open up the paper coin roller by placing one finger inside of it.
5. With the coins all in a row and slightly leaning back, slide the paper roller over all the coins at the same time.  It helps if the roller’s folds line up with the top and bottom of the coins.
6. Fold over both ends of the roller and repeat.

Once I got onto Ashley’s technique, I was much more productive.  In total, it took the two of us 1 hour and 50 minuets to get everything rolled.  In the end, we managed to add $547 do our travel funds.

Ashley Finishing the Last Coin Roll

Disclaimer, we are not trying to advertise for TD Canada Trust, they just happen to be the bank we use.  I highly expect that you can find similar accounts and options at any of the big 5 Canadian banks.

Important Update:

We have not been able to access our funds using our TD bank cards at any of the ATM’s we’ve come across in Guatemala.  The ATM’s all have appropriate symbols indicating both Plus and Visa, but still they do not work.  Be warned.

This ATM no longer charges fees

We visited our bank yesterday, to prepare our accounts for traveling. There ended up being quite a few things to consider, and the whole appointment took us about 1 hour. Even at that, I felt a bit like we were rushed out the door. Probably because we were referred to a 1-800 number for the remainder of our questions, and the lady helping us was glancing repeatedly at her watch.

Avoiding Fees

The first thing brought up by the bank staff, after we explained our travel plans, was ATM fees.  Outside of Canada our bank charges $3 for each bank card transaction in the U.S.A. and Mexico.  This price increases to $5 for transactions anywhere else.  This foreign access fee is on top of the $1.50 fee for withdrawing from an ATM not owned by TD, and whatever the ATM owner decides to charge, so we would have to pay $6.50 per transaction in most countries plus an ATM convenience fee.

Now if we were to upgrade to their premium account (called the Select Service account) the bank promises to allow us unlimited transactions, anywhere in the world, without charging us access fees.  To get an idea of what this could add up to, let’s assume that we will use this card approximately once a week for the next year to withdrawal cash.  At the end of 52 transactions the fee total comes to $338!  That was enough to convince us to upgrade.

Best of all, the monthly charge on this new account is $0 per month, sort of.  We have to keep a minimum balance of $5,000 to waive the normal $24.95 monthly service fee, but we’ll be reserving that minimum amount as a safety net anyways, so not a problem.

More Savings

This premium account comes with a free travel visa.  Normally, there would be a charge of $120 + $50 for an extra card annually for this card if you did not have the upgraded bank account to go with it.  This card offers us some improvements over our existing no fee visas that give us 1% cash back dividends.

1. Earn points that can be cashed in for any travel expense.  The rate works out to 1.5% of all purchases and we should have no trouble finding eligible expenses to cash in our points.
2. Delayed and lost baggage insurance.
3. Car rental insurance.
4. Trip Cancellation and Interruption Insurance. No need to buy that as an extra.

So, all in all, a worthwhile upgrade from our current 1% cash back no fee credit cards.

Safety Deposit Box

Free safety deposit box.  Yeah, how cool is that.  Now we have a place to leave things like our birth certificates, copies of our passports, and our Last Will and Testament (when we get around to writing one up).  It took almost no time at all to set this up, and you are allowed to designate a deputy to have access.  That’s perfect for us, allowing someone at home to access our documentation just in case we run into some trouble abroad.  This normally costs $42.50 per year without the account upgrade.

What else did we learn?

Anyone can deposit checks into your account without a signature from you.  Handy if you have relatives mailing you checks for your birthday.  You simply instruct whoever is collecting your mail to write the following on the back of the check then deliver it to your branch.  In the case of TD, you can also mail the check to the branch and it will be deposited.

For Deposit Only:
Bank Name
Account #

If you need to pay a bill while you are away you can grant Power of Attorney to someone you trust.  This enables them to look after your finances while you are away.  They can cut checks from your account, request loans on your behalf, etc.  I’m not sure if we are going to go this route yet or not.  If you have a need for it, you’ll want to find someone you really trust.  Once you’ve given out Power of Attorney they can do pretty much anything they want with your bank account.  We were also told that we would have to physically come into the branch to remove the Power of Attorney if we had problems.

USD$ Account. Our fancy new account gives us a free USD$ checking account.  It sounded like a good idea to be able to take advantage of good exchange rates now, by converting some of our CAD$ into USD$.  There is one big problem with this plan.  You can not associate a $USD account with your Canadian bank card.  At least you can’t at TD.  This leaves us with no way to access our funds from our USD$ account while on the road.

Copies of Cards.  It’s a good idea to have access to the numbers printed on your access cards.  If a card becomes lost or stolen, you will need these numbers to deactivate your account and reverse any unlawful charges.  This also requires:

International Calling Numbers. Both our Bank Card and Visa have 1-800 #’s to call if your card is lost, or stolen.  Unfortunately these numbers don’t work outside of Canada, so we needed to find out the international numbers to call and bring them with us on our trip.

Putting It All Together

Here’s our general plan for accessing funds while on the road.  The bulk of our funds will be stored with the online bank ING Direct and earning a small amount of interest (currently 1.5%). If you are interested in opening your own ING Direct account, feel free to use my Orange Key: 14780906S1 and we can each earn a sign-up bonus.

As required, we will electronically transfer funds from ING Direct into our TD Canada Trust account to maintain a balance somewhat higher than the $5,000 minimum to avoid account fees.

When we need to make a purchase, we will use our new travel VISA wherever possible and earn our 1.5% reward.  We will set up our bank account to automatically pay off the balance of the VISA each month, so if we do not have access to internet banking we won’t be charged any interest fees.  If VISA is not an option, we’ll use local currency.  To get at it, we’ll use our ATM card in ATM machines to withdrawal from our fee free account.

Do you have advice for us?  Please leave a comment.

At this point we have no idea how much our around the world trip will cost. I suppose, we won’t know the total cost until we stop travelling and compare what’s left in our bank account to what what we started with.

Regardless of how you intend to travel, you will likely need at least some funds for plane tickets, meals, and hostels. We are no different. Some people are lucky enough to have jobs they can generate an income from regardless of where in the world they are. These jobs include many online jobs such as writing columns, translating, proofreading, writing computer code, and similar. These jobs could be a good source of funds while you travel, reducing the amount of pre-savings that are required.

We don’t have any of the above mentioned jobs, nor do we want them. Our goal is to get jobs or volunteer in the various countries we visit. We want to experience the culture, and the lifestyle that our various destinations have to offer. Unfortunately, there is no way for us to guarantee that we will find jobs or be able to subsidize some of our living expenses with volunteer positions in each country we travel to. This leaves a fair amount of uncertainty when we sit down to estimate what our total trip cost will be. Not knowing the total cost makes it just as hard to decide how much we need to save.

Our approach has simply been to save as much as we can, and not worry about how long we can afford to travel for. We’ve been telling people we are leaving in July, and we are going to keep travelling until we get sick of it, or we run out of money. On the right side of this screen is a progress bar under the heading Travel Funds. This represents our total trip budget. This bar should slowly but surely increase toward our savings goal of 100% until we receive our last paycheck. Once we quit our jobs and start travelling, our progress bar will slowly but surly decrease toward 0%. Once it hits zero, it’ll be time to quit travelling and start working again.

I’m not going to say how much we plan to save up for our trip, but I will say that we have been living a fairly modest lifestyle since Ashley and I were married in 2007. We live in a small affordable home, own only a single fuel efficient vehicle and don’t really have any expensive hobbies, aside from travel. Our biggest expense has definitely been our honeymoon trip to New Zealand in 2007.

That said, we still benefited greatly from a quick budgeting session in December 2010. By making relatively few lifestyle changes, we’ve managed to increase our monthly savings considerably. Here’s a few tips that may help you.

• Invest your savings. We put our savings into ING Direct. It pays a modest amount of interest monthly and allows us to take advantage of our Canadian Tax Free Savings Accounts. If you would like to start a new account, please use this Orange Key: 14780906S1 when you sign-up and we will both enjoy a sign-up bonus
• Look at your bank account plan. We have a checking account with TD Canada Trust, and are able to save about $5 per month on account fees by upgrading our account and keeping a minimum balance of $5,000. This higher level account also comes with free ATM withdrawal fees when used outside of Canada. The ATM fees are normally $5 per transaction, quite staggering
• Take a look at your reoccurring monthly bills. We managed to save about $60 each month by re-arranging our Television bill
• Set a budget for entertainment. We lumped together all the little things we enjoy that cost money into this category. Eating in restaurants, going to the bar, going out to the movies, etc.
• Car pool. We were always fairly good at carpooling, but we are making an extra effort now. We set a gas budget and are trying to stick to it
• Carry forward your budget from one month to the next. If you didn’t spend your whole budget, great you can reward yourself next month.  If you spent too much and are over budget, you’ll have to subtract that from next month’s goal so you can get back on track.
• Most importantly keep track of how much you’ve spent as you spend it. There should be no surprises at the end the month and you should always know if there is money left in the budget for you to spend or not.