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How we budgeted for our family gap year
By far the most important part of this whole experience relates to the money side of things. Without proper financing and budgeting we really wouldn't feel comfortable setting out to do this.
After telling people about our trip, the conversation would almost immediately turn to the financial side of things. And we get this! It wasn’t an issue when people would ask since we know how important this part is.
When we began planning, we noticed there really weren’t many specific details online about how to finance everything. Searches like “how much does a gap year cost”, or “how much does a family gap year cost” left us with only general info. For example, we saw info like: $100k for the year with a small family, or $100/day not including airfare between countries. Directionally that info is helpful, but we wished it was more granular.
The purpose of this page is to share how we planned and managed the money side of the trip. We are comfortable sharing this since it doesn’t really get into the very personal details of our lives - like how much money we make, or how much we have in savings. Rather, this section will speak more to how we set our budget, and how we expect to use it for the year.
Also, we understand that some people may find this to be an unreasonable amount so spend, while others might regularly spend $25k on a 1-week vacation. Hopefully this information can be used as a guidepost for you to plan whatever trip is most appropriate for you. Note: at the time of this writing, the trip was just beginning. That means, we still don’t know 100% if this budget will hold. As time moves along we will be sure to update everything with actual numbers vs. what we budgeted.
Introducing the $25k family gap year budget
When we set out to plan our gap year, we aimed for a very aggressive budget. We chose the figure of $25k because it seemed like a nice round number that would not be too expensive, while still allowing us to live comfortable lives.
Our strategy to meet our budget is this: earn income while traveling
Our formula:
Trip Income - Trip Expenses = -$25,000
That is, we expect to spend $25,000 dollars on our gap year (or less if possible!).
Some notes:
At the time of this writing, we have only just begun the trip! Who knows if the $25k figure will actually hold. As we go along we will provide updates on what worked and what did not
When the $25k runs out - we go home
We are not including the return budget in the $25k. It is critical that you have enough cash on hand when you return so that you can ramp up back into real life. We recommend having at least 6 months of full family expenses saved. So, you would have $25k saved up, plus 6 months of return cushion.
Part I - Building the budget
Expenses
Once we had the general trip structure - roughly 6 months in Latin America, and 6 months in Europe - we began breaking down the costs/expenses for each country.
We came up with budget line items for both Recurring and Non-recurring expenses:
Recurring Expenses
Airbnb
Because of the ease of renting, and thanks to our many positive experiences, we planned for using Airbnb throughout the year.
Latin America - $900/month budget
Europe - $1,200/month budget
Food/fun
This section is for groceries, dining out, and random in-town activities. We probably could have broken these out into different line items, but chose to put them all in one.
To set a food/fun budget number, we looked at how much this costs in other countries. To get an idea, we found this cool website called Numbeo that lists out costs for many items in other countries.
On activities, we plan on doing as many outdoor activities as possible in the warmer climates, and we expect those to be either cheap or free. Plus, we don’t expect too many side trips as our intention is to actually live in one area to feel as immersed as possible. Because of this, we plan to have maybe 4 extra activities each month (like museums, parks, movies, etc.).
Latin America - $800/month budget
Europe - $1000/month budget
Travel Insurance
Since we’re traveling to unknown parts of the world, this is a must. Who knows what sort of stomach bugs and twisted ankles are out there waiting for us.
Turns out there is something called Expat Insurance that is perfect for situations like ours. Generally, these will get you coverage for travel in any country, save for those with expensive healthcare (like the US).
Our plan offers just that - it has coverage for every country except the US, it has a reasonable deductible, and it has a relatively low maximum out of pocket. Our provider is Cigna.
Travel insurance - $310/month for a family of 3
Miscellaneous
Although we are cancelling all of our subscriptions, we personally had a few obligations back at the house that could not be cancelled.
Total miscellaneous - $620/month
Non-recurring expenses
Flights
To get our flights, we plan to use a combination of American Airlines miles and cash. Depending on the flight, we can get a better value by using either miles or cash. Our budget for flights looks like this:
DFW to Quito - this was broken up into 2 individual flights, with a 1-day layover in Miami. Total cost - $1,500
Quito to Galapagos - Side trip! We can’t go all the way to Quito and not go here. $900 for the flights
Quito to San Jose - there weren’t any American Airlines flights doing this route (unless we wanted to come all the way up to the US). Total budget $1,025
Costa Rica to Guanajuato - 52.5k miles (saves us about $1,000)
Guanajuato to DFW - 45k miles (saves us about $1,500)
DFW to CDG (Paris) - 67.5k miles (saves us about $2,000)
CDG to non-Schengen country - $750 using something like EasyJet. Since we are American, we have to leave the Schengen zone after 90 days straight. Not sure where we are going, so priced out options on EasyJet’s website.
Final country to home! - We are counting on using our miles for this one.
Total on flights - $4,175
Hotels
Miami hotel (where our layover was) - $190 for 1 night. On the way to Quito we stopped for over 24 hours to take one final breath before going into the unknown of our gap year. Since it was Father’s Day Jessica picked out an awesome hotel not far from the airport - the Hilton Blue Lagoon.
Total on hotels - $190
Side Trips
As mentioned above, we are taking a side trip to the Galapagos Islands with friends. The flights from Quito to the islands cost us $900.
Since we are allowing our friends to stay at our apartment in Quito, they were kind enough to pick up the tab on the hotel at the Galapagos! This was a huge help.
Total on side trips - $900 for flights to the Galapagos (this was counted already in Flights, above)
TEFL Class Tuition
As mentioned at the top, we are counting on income from teaching english as we move around.
Frank’s tuition - $1,500 for an in-person 4-week class in Quito
Jessica’s tuition - $1,300 for a 13 week online course
Total - $2,800
Income
As a way to fit into our pretty aggressive gap-year budget, we went out looking for ways to earn money as we travel.
When researching different ways to earn income, we saw many things like data entry and inside sales. Although neither one of these is necessarily a deal breaker (Frank is a professional sales person, after all), we both gravitated towards another option - teaching english.
Considering the fact that both of us are pretty much language nerds, we thought this would be a cool experience. We ourselves enjoyed learning our respective second languages, and really liked the idea of helping others to enjoy learning their second language.
For much of our trip, the expenses are projected to be pretty low. So, if we could earn even a couple of thousand dollars total, that would almost completely neutralize expenses.
In the section below you can see monthly details on how much income we are estimating to bring in.
PART II - Tracking the Budget
To keep track of the budget, we are making big use of Google Sheets, which is Google’s answer to Excel. We are using this for a couple of main reasons:
Google Docs (which includes Sheets) is free!
No need to buy another Microsoft Office license for our other laptop
Google Docs automatically backs up to the cloud, pretty much after any change
If your laptop is stolen or breaks, you just need to login to any computer or phone to see your files
The Simple Budget
For income - we are budgeting to produce $19,800 in income between the both of us.
For expenses - we are budgeting to incur $44,800 in expenses.
So...
$19,800 (Total Income) - $44,800 (Total Expenses) = -$25,000
That is, we expect to spend $25,000 over our trip.
The Budget Details
Below are the total month expenses we budgeted. We will keep this blog up to date with actual figures vs. budget.
Pre-trip expenses (all of which are one-time expenses)
Frank Tuition - $1,500
Jess Tuition - $1,300
Flights - $1,500
Total - $4,300
In-trip expenses
June 2019 - $1,818.00
July 2019 - $2,858.25
August 2019 - $4,383.25
September 2019 - $2,858.25
October 2019 - $2,858.25
November 2019 - $2,858.25
December 2019 - $3,358.25
January 2020 - $3,358.25
February 2020 - $4,108.25
March 2020 - $3,285.25
April 2020 - $3,285.25
May 2020 - $3,285.25
June 2020 - $2,185.25
Total - $40,500.00
Total one-time expenses + total recurring expenses = $44,800
Income
Below are the total income figures we are estimating for each month. All of these are the totals for both of us.
In the spirit of being conservative, we made the assumption that no income would be made for the first 3 months.
The $900 you see in August is actually for prepaid airfare to the Galapagos. Since this airfare was purchased before the trip began, and I wanted to account for the expense in August, I needed to put this here as income.
Like the expenses above, we will keep this blog up to date with actual figures vs. budget.
June 2019 - $0.00
July 2019 - $0.00
August 2019 - $900.00
September 2019 - $1,500.00
October 2019 - $2,000.00
November 2019 - $2,400.00
December 2019 - $2,400.00
January 2020 - $2,400.00
February 2020 - $2,400.00
March 2020 - $2,400.00
April 2020 - $2,400.00
May 2020 - $1,000.00
June 2020 - $0.00
Total - $19,800
The Budget Graph
Expenses
The red bars show the expected expenses to be incurred based on the month
Note that I put all of the pre-trip expenses in one bar. This just made for a cleaner graph
Income
Like expenses, the green bars show how much money is anticipated to be earned
Cumulative Trip Cost
This one uses the secondary y-axis on the left
I really like this because is shows you how much money is expected to be spent by whichever point in time
This will be very important to keep tabs on how we’re performing vs. the budget
For example, you can easily see that at 6 months, we expect to have spent $15,000
It also shows that we budgeted to spend over $10,000 before earning anything
