We have heard the comment You must have a lot of money to be able to afford your lifestyle a few times since we began our journey. If you are someone who has been thinking ‘I can’t afford to travel’ (full-time or otherwise), or you wonder how you can make living in your city just a little more affordable for you and your family, today’s article might be for you.
Until October 2016, we lived in Sydney, Australia. Numbeo ranks Sydney as the 29th most expensive out of 512 cities in the world (behind New York at 15th and ahead of London which ranks 37th). This is pretty close to the results Mercer found in their annual Cost of Living Survey, which ranked Sydney as the 25th most expensive city. In comparison, New York ranked 9th and London 29th.
With the increasing cost of living top of mind for many, we asked ourselves before we embarked on our life-changing journey: Could it be cheaper to travel full time than live in Sydney? So how does (almost) a year on the road compared to (almost) a year in Sydney?
Our Cost of Living comparison
While we have used several different accounting applications to record our expenses over the years, for our comparison, we have aggregated them into the following categories:
- Accommodation and Utilities
- Groceries and Dining
- Transport and Travel
- Insurance, Bank fees and Government charges.
Our cost of living comparison covers the periods
- 07 November 2016 to 15 September 2017 (On the road/OTR) and
- 07 November 2015 to 15 September 2016 (Sydney).
All amounts are in Australian Dollars (AUD).
Having now lived three different lifestyles, our daily cost of living compare as follows:
Our cost of living in Sydney and New Zealand were converted to USD using the interbank exchange rate as at 30 December 2018 (USD1.00 = AUD1.4197 / NZD1.4899).
Accommodation and Utilities
AUD51 per person per day
Above number includes the payments we made for our mortgage, council rates, utilities (that is, water, electricity, gas), home repairs, cleaner, gardener and communications (internet and mobile phone).
Our house was mortgaged at 80% of the purchase price, with part of our mortgage offset against our savings to reduce our interest payments. Nevertheless, our biggest expense item within this category was our mortgage repayments (67% or AUD34 per person per day).
To our surprise, the costs of our cleaner and gardener came in at a second place, costing AUD7 per person per day (or 14% of this category).
Utilities and communications costs came in at an equal third place, with 9% respectively.
On the Road
AUD28 per person per day (-45%)
Having sold our house, mortgage repayments, council rates, utilities, home repairs, cleaner and gardener were a thing of the past, shaving a whopping 91% (or AUD33,820 per year) from this category. Even after paying for short-term rentals on the road (via Airbnb, HomeStay, Booking.com and Hotels.com), we were able to save AUD14,499 per year.
Another great save were our communication costs: Maintaining only prepaid contracts for our mobile phones (to make phone calls if required where global roaming was available) and utilizing Wi-Fi wherever possible, we were able to shave off 86% of our communications costs (AUD2,848 per year).
Groceries and Dining
AUD30 per person per day
Sydney is a great place to eat out. You could go overboard and eat at a different restaurant every night of the year and still not experience a quarter of the eateries.
That said, in our last year (2016) in Sydney we used to go to our local pub every Friday night and to a restaurant or café every two weeks (usually when we caught up with friends).
Despite having a coffee machine at home, we tended to buy a coffee every morning (and several more throughout the day in Paul’s case). With our hectic lifestyles, we would also often buy lunch near our offices. Only occasionally, we would bring in leftovers for lunch.
On the Road
AUD23 per person per day (-23%)
On the road, we tended to dine out only once a day, having breakfast and either lunch or dinner at home.
Eating at home was not always the cheaper option: In some countries (especially the smaller Caribbean islands), groceries were significantly more expensive than in Sydney. In Ecuador on the other hand, the almuerzo (set lunch, usually three courses and a drink) was always a more cost-effective option than cooking at home (and a great way to get to know the local cuisine). Another great save was sharing the main meal (or a starter and main), especially in countries where the meals tend to be XXL sized (like the US and Cuba).
While less common in Australia, tipping at restaurants is expected in some other countries, especially in the US. Tips are therefore included in this category.
Transport and Travel
AUD27 per person per day
As we lived in Sydney’s Inner West with good bus connections to our respective offices, we did not (need to) own a car. We did, however, use the GoGet car share service on weekends (for example, to buy groceries or visit friends in outer suburbs). Car sharing and parking costs, as well as public transport, are included in this category.
Above figure also includes our trips within Australia and overseas:
- Italy, Germany and the UAE in November 2015
- Country New South Wales in January 2016
- Hunter Valley in March 2016
- New Zealand in April and July 2016
- New Caledonia in June 2016; and
- Snowy Mountains in August 2016
Beyond the actual transport (by plane and/or car) and tourism activities, above also includes accommodation and dining during our trips. We didn’t record our trip spend at that level of detail, so weren’t able to split them out, sorry. While the AUD27 per person per day for this category would have reduced, Sydney would have come out even more expensive in terms of Accommodation and Utilities, and Groceries and Dining.
On the Road
AUD36 per person per day (+32%)
Above includes inter-country transport: our flights from/to Auckland and transport (by plane, ship and bus) between the countries we visited in 2016/2017.
It also includes intra-country transport (by any means) as well as costs for tourism activities. Our most expensive activity was a one day tour in the Galapagos Islands, but many tourism activities were actually free or very inexpensive.
While we travelled around the Americas a fair bit, we were able to save a bit too. We used One World and Star Alliance air miles (from Auckland to San Francisco, from Toronto to New Orleans and from New York to Quito) and picked travel dates that had lower fares (things you can do when your schedule is flexible).
Unfortunately, coming back early due to a family emergency, wiped out all these savings. That’s what you do to be with your loved ones…
AUD9 per person per day
Above includes our spend for our
- Hobbies (Paul’s running, Sandra’s sadly under-utilized gym membership, yoga classes, swimming pool entry fees, as well as martial art classes for both of us); and
- Entertainment (for example, tickets for the Sydney Festival and various Film Festivals, cinema tickets, eBooks, streaming music and movie downloads).
Paul’s passion for running means that he bought new running shoes every three to four months. He also challenged himself by competing in running races. The costs of his running gear and entry fees for these events are included in above.
When we lived in Sydney, we had the newspaper delivered on the weekend. With us not being able to enjoy breakfast together during the week, weekend breakfasts (and reading the paper), was one of our rituals and little pleasures of Sydney life.
On the Road
AUD5 per person per day (-41%)
Removing Sandra’s gym membership, yoga classes, swimming pool entry fees, as well as our martial art classes and newspaper subscription shaved AUD3,405 per year off this category.
We still download Kindle books, though there are a few more travel guides now in our library. While we had more time reading and watching movies on the road, we spent 60% less on it, thanks to free articles, eBooks, podcasts and YouTube videos.
Paul continued to run (after the New York City Marathon). He did buy new running shoes (three times) in 2017 but wore his running clothes for longer. He even attended a few running events (including the Mexico City Half-Marathon on 30 July 2017).
AUD19 per person per day
This category includes our spend on
- Medical and dental treatments (29%)
- Haircuts, facials, manicures/pedicures and massage/chiropractor treatments (32%)
- Clothing (29%); as well as
- Gifts and donations (9%).
As we adopted minimalism, our gift-giving changed (for example, for our wedding, we asked our guests to donate to charities rather than giving us physical gifts). We didn’t buy physical gifts for each other or for our friends and families, instead chose to gift experiences or money to contribute to something they actually needed.
Included in above are
- Medical and dental check-ups (including costs for some vaccination fresh-ups) to ensure that we left the country in good shape.
- Clothes purchases for our life on the road (Check out our packing lists: Female/Male).
While you could argue that these might slightly skew the numbers, we used to buy fewer yet higher quality items and get dental check-ups regularly anyway. Hence, we didn’t really see the point in trying to split them out.
On the Road
AUD3 per person per day (-83%)
All the pampering and clothes shopping to maintain good looks for our corporate careers, and recuperate from our hectic lifestyles, was greatly reduced on the road:
- Sandra only had two haircuts (and colour) in the last year; Paul’s regular haircuts at a barber were never more than USD10.
- We continued to have manicures/pedicures and massages, just not as frequently as before.
- We would only buy clothes (of similar quality) to replace items that had worn out.
In some places, manicures/pedicures, facials or massages were quite expensive. But mostly, we didn’t need them as much as we were active, in the sun and fresh air (rather than hunched over a desk in an air-conditioned office). Reducing the pampering alone saved us AUD3,340 per annum.
Each of us was sick twice: Paul with stomach bugs and Sandra with the flu and a stomach bug. We both experienced the hospital system of our respective host countries when it happened – Ecuador and Guatemala. Treatment in each case was free of charge. We only had to pay for our medication (at a similar cost to Sydney).
As giving to those less fortunate is close to our hearts, we donated almost at the same level as before and sought out volunteering opportunities while in Guatemala. Unfortunately, it wasn’t meant to be this time.
Insurance, bank fees and government charges
AUD8 per person per day
Like most people, we dislike paying Bank Fees of any sort, especially unnecessary ones. We always pay our credit card statements in full (in Sydney and on the road).
On the Road
AUD6 per person per day (-27%)
Our comprehensive travel insurance covered us around the world (including Cuba) for key risks such as medical expenses and repatriation, personal liability as well as loss or damage of our possessions (including more valuable items like our electronics and wedding rings). Covering for our key risks on the road cost us 52% less, however, shaving AUD2,914 per year off our bill.
Bank Fees on the road were fees incurred for ATM cash withdrawals. We had done a lot of research before we left, selecting cards/banks that didn’t charge foreign transaction fees, thus minimizing fees as much as possible. Our bank fees were therefore only marginally higher than when we lived in Sydney.
Government costs related to Paul’s replacement passport, and our visas/entry fees/tourist cards and exit fees/departure taxes (adding AUD1,309 per year to our bill). These types of expenses obviously only occur when you travel.
How our spending focus has changed
Looking at these good old-fashioned pie charts above (you can take an analyst out of Sydney but you can’t take the analyst out of Sandra), we have essentially traded comfort and luxury (by reducing our spend on Accommodation and Utilities, and Wellbeing) for the ability to travel and explore the world (increasing our Transport and Travel spend). Groceries and Dining, Leisure as well as Insurance, Bank fees and Government charges still make up a similar proportion of our spend. A proof that apart from taking our life on the road, some things don’t change (at least not significantly).
We can confirm that you can live for less on the road than in an expensive city like Sydney – 30% (or AUD31,416 per year) less, in our case. While we took advantage of the cost of living disparities in countries like Ecuador, Mexico, Guatemala or Nicaragua, disparities were not in our favour in the USA, Canada, Belize and several Caribbean islands.
Whether you want to embark on a similar lifestyle change or are looking for ways to make living in your city more affordable, starting point to all of this is to REALLY KNOW YOUR OUTGOINGS.
Once you do, ask yourself whether what you are spending your money on is aligned with your values. A great help is to calculate how much a new purchase would cost you in (additional) work hours or days. Stop (or at least reduce) spending money on anything that doesn’t give you value, and redirect the freed up funds to what is truly important to you (visiting your grandma more often or paying your debt off as fast as possible – whatever it may be).
While we have proven that full-time travel doesn’t need to break the bank, we still spend money (which we need to earn in the first place). Developing a number of (smaller) income streams that enable us to sustain our life on the road into the future is, therefore, a key priority for us. As building a viable business doesn’t happen overnight, we will keep you posted how this side of our life is going over the next two years.