Travel is expensive! Yes, but it does not have to be. Exploring the world is a dream that many of us have, but in Carmen and my case we went after it. There are just too many beautiful places to see and too much awesome street food to eat. There was a clear point in our lives where travel had to happen, no matter what the cost. That intense excitement led to a thrilling exploration of South America and eventually the world. Through trial and error we did learn how to travel cheaply. In our explanation of how to finance a trip around the world we must first discuss our failed budget when we went to South America. I’ll detail some of our mistakes and hopefully we all can become better travelers from it.
We set our original goals at $10,000USD for 3-1/2 months in South America. We had some experience traveling in Asia and Europe; we reviewed some guidebooks checked out some prices and $50 per person per day seemed like a plausible goal. We had an excellent trip to Argentina, Uruguay, Brazil, Chile, Bolivia and Peru and we saw some fabulous things. We kept track of our finances, we had thought (cough) we were on track, but when we returned home that summer we found that we had spent twice what we had planned. Ouch! And our end expense exceeded $98 per person per day.
We mapped out all of our costs to shine clarity on the culprit of this over expenditure. We divided costs into 10 categories. Eating, sleeping, shopping and flights are obvious ones. “Transit” describes buses and taxis within a city while “Get In” refers to the regional transportation costs of traveling between cities by long-distance bus. A night at a club, entrance to a museum or winery, or drinks at a bar are part of our “Fun” category, but multi-night treks would be considered a “Tour.” The category of “Visas/Ins/Fees” refers to the inescapable costs of travel- entry visas, travel insurance and the bank fees are impossible to avoid in the midst of a 4 month trip across South America. Miscellaneous costs include toiletries, internet cafes, travel memberships or batteries. What stood out as the burden to our budget? All of it! South America is expensive and to make it cheaper we would have to change our whole travel style. Our budget goal would have been impossible provided all the fun that we had and the speed and diversity of our travel. But we still took away some key lessons that we worked into our later travels.
One example: entry visas. In South America we spent over $1,100 just to enter into these countries. That is over $5 per person per day. In many ways these are unavoidable, but we learned the valuable lesson that next time we will make the visas worth it by spending more time in the countries. When you are trying to determine how many days to travel in a country a good goal is for a visa cost to be in the range of $2 per day. The visa for Bolivia was a pain in the ass, but we got through it, Brazil was paid for ahead of time, but two countries could have been avoided entirely with the proper planning. Here’s how: the Buenos Aires and Santiago airports charge a reciprocity fee of $140 per person. They can be avoided by arriving by land or boat. In hindsight we would have bused to Santiago from Mendoza and boated from Uruguay to Buenos Aires and we could have saved $560.
Argentina was where we thought we would save, but it turned out to be much more expensive than we thought. We lived in Buenos Aires for three weeks. We took Spanish classes, explored the city’s best restaurants and we thoroughly enjoyed ourselves in that wonderful city. Later in our trip, we explored central and northern Argentina in depth with wine tastings, canyon tours and days at the spa. Looking back on it, we were not traveling with a budget in mind. We were using a guidebook that was three years old and already the prices of everything had doubled thanks the country’s infamous economy. The challenge with Argentina is that the food really is not that good. We were spending European prices for ok steak and crappy salads. We had a handful of excellent meals, but after six weeks of traveling in Argentina, we should have learned our lesson: cook more when food is expensive.
Costs that we thought were unavoidable were bank fees. Argentina is the worst because the max withdrawal limit is $200, then there is a fee by MasterCard, the local ATM fee and my bank’s fee. That’s $12 for every $200, ouch again! Four months in South America seems even more expensive when $300 is lost in ATM transactions. Here is the solution: get an internet bank account to significantly lower fees. We use Scottrade, and they cover the local ATM fee of any ATM anywhere. We only pay the 1% fee to MasterCard. That means on our next 7 month trip we spent $75 in fees, twice the trip and a quarter the cost.
Similar to Argentina, Chile and Uruguay are not cheap destinations for travel. The countries are very progressive, modern and exciting to visit; the food, lodging and entertainment are all similarly priced to what we pay for things in San Francisco. Don’t expect any deals. (Note: Uruguay sleeping costs were covered by Carmen’s parents, whom we were traveling with at the time.)
Brazil stands out as one of the most expensive countries we have visited in all our travels this past year. Yet the country is beautiful and worth every penny! From Iguaçu, to beaches, to samba and tropical fruit, Brazil is exotically wonderful. It is a challenge to get affordable housing, hence the favelas; food is similarly priced to the US, and regional transit between cities is quite expensive. My next visit to Brazil will include more economic adventures, like chilling on the beach.
Bolivia is the most poor (affordable) and underdeveloped (adventurous) country in South America. We can say it a million times, but Bolivia is the one place everyone should go and see. The scenery is majestic – abnormal even – the people nice and the Spanish easy to understand. Our most expensive activity was a four day jeep trek across mountains and canyons to the Salar de Uyuni. It cost a whole $220 per person for food, lodging and the tour. If you fly into La Paz, you can avoid all the challenges of a land crossing along the border.
Everyone that goes to Peru is going to see Machu Picchu. The tickets are expensive and the permits to walk the Inca Trail come with the price of a tour group. We took an organized trek for six days with our friends. It was well worth the cost of $800 per person and we saw the rustic mountainous ravines of Peru alongside the expected hordes of tourists. Peru does not have a visa cost, so I encourage travelers to see more of the country to lower your overall travel expenses in South America: we particularly enjoyed Arequipa and Colca Canyon.
Flights are a huge cost to any trip. Our flights alone to South America break down to about $12 per person per day which in retrospect was a lot. We believe that getting that cost under $10/day is a better goal for travelers on a budget.
There is a difference between vacation and long-term travel. Without a job and only a savings account a budget must always be considered. This took months for us to adjust and during our time in South America we leaned more towards the vacation end of things. I must admit I thoroughly enjoyed our spa day, shopping splurges, high-end dining experiences, bottles of wine and private hostel rooms instead of dorms but we realized that in South America we needed to moderate it more. In many ways, South America was as expensive as Europe! But because we had a preconceived notion that it wasn’t we didn’t try as hard to save.
Even with the outlined changes, we would not have achieved our original budget. But we could have made it hurt a little less:
- $560 saved by rearranging our entrances into Chile and Argentina
- $260 saved by having a better bank account for traveling
- $580 saved by cooking just three more meals per week in Argentina & Brazil
- $800 saved with moderation of “splurge” purchases, dining and lodging.
- $300 saved by Couchsurfing in cities where hostels were expensive
All that cutting and what does it save? A whopping $11.5 per person per day. Not a whole lot, but it is a start. Even at our best South America would still cost $86 per person per day. And $2,500 goes a long way when traveling. The lessons are valuable: travel slower- enjoy the places, eat the food (cook from markets) and take the time to meet the people (Couchsurf). Banking and entry visas require advanced planning, but it is an easy way to save money. And the biggest lesson: moderate the time in the expensive countries with the ones that are cheap. Traveling for $50 per day cannot be done in South America alone, but mix in a little South-East Asia or Central America and your trip may be a budget success!