So let’s do the math (a la Mark Watney in The Martian). We created this budget early on in our discussions, and it really allowed us to make this whole endeavor more concrete in our heads. It’s nice to say, “we’re going to sell everything and travel the world,” but it’s quite another to do the math and realize that it is not only feasible, it is actually cheaper than our current lives!
There are things that exist in this budget that do not exist in our current budget, like storage fees and the extra insurance we will carry. But there are also quite a few things that we pay for now that we will not pay as nomads (I’m looking at you, mortgage interest!).
Housing
We’ve set a budget of $2000 – $2500 for our monthly Airbnb costs. We’ve done research in most of the Caribbean countries and found that this budget is reasonable for a two bedroom that is walkable to the beach.
In some countries we can get quite a few amenities for our budget and in others we will be living a little more simply, but this budget is one that we feel comfortable we can stay within as we travel. Ironically, the places where this budget will not support us are on the coasts of the United States. America is bougie!
Food and Toiletries
For two people, we’ve budgeted $1500 a month (about $375 per week) for food and household supplies. This includes groceries, restaurants, cocktails at ocean-side bars, airport travel food, paper towels, shampoo, toothpaste, you name it. Our current US grocery/restaurant budget for three people is $250 per week. Outside the US, and with one less person, we think that $375 will be sufficient.
In some areas, we will be able to eat for significantly less (Hi, Belize!) and in others, it will be a lot more, so we recognize that our budget in this category will not be consistent, but over time, it should average $1500 per month.
It will be Steph’s job to monitor the food and grocery budget to make sure we’re staying within our limits. It will be Gene’s job to plan our meals at home to stay within that budget. Know your strengths as a couple!
Travel
This category includes flights, baggage fees, taxis/Ubers, trains, boat shuttles, etc. We’ve budgeted $12,000 per year for travel expenses. Given that we will only change locales 4-5 times per year, we can assume $2400 per travel instance. We think that this is reasonable, given that we have control over where we go and can avoid any areas that have high travel costs when our budgets are tight.
Just like our food budget, there will be travel days where we are under budget and others where we are over budget. We have not budgeted for renting a car; we are focusing on areas where full-time access to a car is unnecessary. If we find that we need to rent a car, that will need to come out of our Miscellaneous fund (more on that in a minute).
Tuition
We will have a kid in school, so our budget includes tuition payments. This budget area is dependent on a lot of things – where she goes to college, scholarship opportunities, the performance of our college investment account, etc. Suffice it to say, we have a plan here.
Phone
We currently pay approximately $300/month for a family plan and we’re keeping that budget the same for when we travel. We are really guessing here. Right now, we have a phone plan that pays for all three of our daughters’ phones (two have moved out, one heading to college), several smart watches and an iPad. When we transition to the nomad lifestyle, we will have still be paying for our youngest kids’ phone and a smaller subset of watches and likely we will keep the iPad for traveling.
We also know that we will need a phone plan (or plans) that covers us in the Caribbean. We’ve been looking at plans and the pricing and options are all over the map (no pun intended!). We will continue our research, but we are budgeting high for now and will adjust this budget later.
Insurance
We are putting $7600 here. This category includes our life insurance, long term and short-term care insurance (all currently existing policies), travel insurance to protect our belongings while we wander, and any supplemental insurance we need for traveling.
This number does not include our basic health insurance, as this is taken out of Steph’s paycheck, but it does include our estimate of supplementary insurance costs for care out of the country (which is decidedly “out of plan” for our health insurance carrier!).
As we age, this number will increase. As my mother used to say, “It’s hell getting old!”
Miscellaneous
We fully embrace the fact that we don’t know what we don’t know, so we have given ourselves a cushion of $10,000 per year for things we did not anticipate. Some of these things might become new budget categories and be re-allocated if they occur regularly. Others will just be random expenses that don’t fall into one of the other categories. And if we don’t spend it all that year, we’ll just move it over to savings.
Storage
As we’ve said before, downsizing from a 5-bedroom house to two suitcases is a cute tagline, but the reality is, there will be some things we can’t take with us but we also can’t get rid of. Musical instruments, winter clothes (when we come back to KC for the holidays, we can’t wear shorts and flip flops!), other heirlooms that we need to keep, etc. We allocating $5000 a year to pay storage for the stuff we can’t let go.
This budget line also includes storage for a vehicle here in Kansas City. Since we are planning to come back to KC several times a year, we need to have a vehicle so we can get around while we are here. We will keep the car in indoor storage along with the rest of our stored belongings.
This cost also includes a safe deposit box for our important personal documents and valuables.
Our budget does not include…
What is not in our budget: utilities, lawn care, pest control, and home maintenance. It also does not include souvenirs, home décor, holiday decorations or other “stuff” we tend to accumulate in daily life.
When you have to pack your whole life into a suitcase every three months, every item you buy on your travels takes up valuable suitcase space, so our purchases will be mostly contained in what we can consume while we are there (food, wine, rum, etc.)
Adding it all up
If you’ve been following along with a calculator, that’s $7180 per month, or approximately $86,000 per year, not including tuition costs. Without going into the details of our income, suffice it to say that this is very doable and leaves us with a substantial amount leftover every month to go into savings.
Once we did this math and it sunk in that, not only can we afford to do this, but it is also actually financially beneficial for us to do it, the excitement level really ramped up a few notches.
What did we miss?
If you can think of anything else we missed in this budget, let us know in the comments. We’re open to all suggestions!
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