How to Budget for a Gap Year

Melissa Presti
April 30, 2020

This is Part 2 to the Ultimate Guide to Planning a Gap Year.

If you missed the intro, you can find Part 1 here. We started by briefly outlining the various planning stages and now it’s time to go into more detail. First up is budgeting.

When it comes to travel, money is public enemy number 1. Money determines where you go, for how long, what you will do while traveling, and how lavishly you do it.

Money is also the number one reason why many people do not travel. Of course there are other conflicts like school, full-time jobs, sports, family commitments, etc., but our bank accounts are the biggest culprit. 

We recognize that various socioeconomic factors also play a role - there’s no denying that. But we want to debunk the myth that travel is prohibitively expensive. Travel doesn’t have to be 5-star resorts and first-class seats on a long-haul flight. Gap year travelers know this, and they’ve turned affordable travel into a blueprint for anyone to follow - no matter your age. 

First, let’s look at a couple of facts:


  • In 2019, the average cost of a semester abroad program through a university was $14,295

  • The cost of a gap year program through an organization can cost anywhere from $10,000 to over $50,000!


So yes, according to those numbers, travel IS insanely expensive if you take one of those routes.

But these estimates basically tell us what you probably already suspect - planning everything yourself is the cheapest way to travel. Yes, you will be responsible for all of the details and there won’t be a chaperone to guide you through it, but you can do it at a much more affordable cost if you’re the one calling the shots.

If you’d rather take the approach through an organized program, the cost is pretty clearly outlined on each organization’s website. But if you want to DIY your gap year, then the following costs are what you need to consider:


Expenses: Needs

These are the non-negotiable costs that you physically need in order to successfully pull off a gap year. Flights, accommodation, visas, and basic groceries. Food, shelter, and transportation. These are the bare essentials that will lay the foundation for your budget.

Airfare

Obviously you need to get from Point A (home) to Point B (wherever you decide to start your journey) and you’ll likely be hopping on a flight. Right now, only concern yourself with a one-way flight. One of the joys of planning a gap year yourself is that you have the flexibility to change your return date and even where you’ll be returning from. You’ll be kicking yourself if you can’t follow your new found love to South America for a month because your flight home is from London!

Here’s a pro tip: there aren’t many booking “tricks” to follow. Tuesday’s are usually the cheapest days to fly and booking around 2 months in advance will get you close to the cheapest price. Any other secret “hacks” you’re promised are likely to be more hassle than they’re worth. 

Tips:

  1. Use a site like Skyscanner to search for a specific destination from your city of origin, and check the entire year to see what time is most affordable to go.
  2. Be as flexible as possible with your itinerary and search several options for your first destination. Often flight costs will determine your travel route.
  3. Have an endpoint in mind - don’t book that flight now, but have an idea of the rough cost for getting home so you can estimate a round-trip total for this part of your budget.
  4. Consider the cheapest flight options that probably involve more layovers. The longer travel time might be worth the savings.
  5. Factor in all of the internal flights and transportation you’ll need throughout your trip. Budget airlines like RyanAir and AirAsia will be your new best friend. But don’t forget to add luggage to the cost! Often when flying with budget airlines the cost of a checked bag can be more than the ticket itself. 

Check out Kiwi and play around with their Nomad tool that will help you find the cheapest possible route for your multi-destination trip.

Recommended budget:
$500-$800 for your one-way ticket, but obviously can vary significantly depending on the route/distance. Assume a similar cost for your flight home


Accommodation

When it comes to figuring out where you’re going to stay at every stop on your trip, the most cost-effective option is a hostel.

If you aren’t familiar, hostels are dorm-style lodging that is shared by travelers. You can book a bed in a dorm room of bunk beds, usually with shared bathrooms, a lounge, and a communal kitchen. You’ll meet travelers of all ages from all over the world which is what makes this such a great option for solo travelers. 

Hostels are super easy to book last minute, which means you can arrange things in advance or as you go. You can find them in almost every country in the world and they are almost always your cheapest option - as low as $1/night in some Southeast Asian countries and average around $15/night. 

We recommend using Hostelworld as your source for all hostel bookings, and thoroughly reading reviews to make sure the quality, amenities, and security are up to your standards. |

Pro tips:

  • Many hostels also offer private rooms at a higher price. You might want to treat yourself every once in a while to take a break from sharing a room, but still get the social vibes of a hostel. 
  • If you’re planning to stay in one place for a week or more, compare the hostel prices to Airbnb prices - sometimes they are quite comparable!


Recommended budget: $300-600 per month, depending on what part of the world you’re traveling in.


Visas

First things first - don’t assume that you are entitled to enter a country just because you’re on a gap year adventure!  Many countries will require you to apply for permission to enter their country. This permission is called a visa. They often have time limits on the amount of time you’re allowed to stay.

These time limitations and visa costs all depend on the country you hold a passport in and the country you’re visiting. And so you will need to do your own research to see if you require a visa for each country you enter.

There are all types of visas; some require approval before you arrive so you need to give yourself time to submit paperwork (usually online) and wait for the approval process to complete. Some countries provide a visa on arrival, and some countries are visa-exempt for tourists for a limited amount of time.

Because you’re on a gap year as a tourist and not as a student or worker, you will always be entering each country on your trip on a tourist visa. Just make sure you give yourself plenty of time to organize any necessary applications in advance of your arrival.
Example: it takes about a week for Americans to go through the online visa process before you can enter Vietnam.

You can consult CIBT (Center for International Business and Travel) to quickly check requirements by entering where you’re traveling from/to. Project Visa will have all embassy and visa information, and Passport Index will track any changes to visa requirements.

Groceries

Lastly, you’ll need to figure out a weekly budget for food. This can make or break the bank depending on how you balance eating out and eating in. Luckily, hostels are equipped with kitchens and you’ll see many fellow travelers taking advantage of this to cut down expenses. You can store your labeled food in a communal refrigerator and cook/prep meals as often as you need to.

This not only saves you a ton of money but you get more social interaction too! But let’s not ignore the fact that experiencing different foods from different cultures is a huge benefit of travel. If this is important to you, increase your budget to enable yourself to eat out regularly. Mix it up between super cheap eats from food stalls (The best are in Asia!) and mid-range restaurant options. Depending on where you’re at, eating out can be very cost-effective. But if you plan to eat-in a majority of the time to stretch your money further, you’ll still find new and interesting things to try from the local grocery stores!

Bottom line, food expenses are a personal choice and you’ll be able to adjust this throughout your trip as you get a feel for your preferences and shared kitchen spaces.

Numbeo is a cool resource to research the current costs of groceries and dining out to help plan your weekly or monthly food budget. 


Recommended budget: $400/month


Travel Insurance

Carrying proper medical and travel insurance is 100% non-negotiable for your health and safety (and your parents will agree). If you’re already on a health insurance plan through a family member or job, or if you’re from a country with universal health care, make sure you’re up to speed on the coverage details. It’s uncommon in America, but general health insurance benefits may extend to travel.

If not, travel insurance companies exist to make sure you’re covered for all kinds of scenarios. Medical treatment, evacuations, medications, injuries sustained from a number of activities, and even lost luggage and delayed flights. 

SafetyWing
provides coverage for as little as $37/month which you can set up to auto-renew each month. We’re also fans of WorldNomads so shop around a bit.

All insurers will vary in terms of cost, coverage amounts, exclusions, and limitations, and it’s best to research and calculate your options that make the most sense for your personal health and safety.


Recommended budget: $40/month

Expenses: Wants

These add-on costs are flexible for all types of budgets and your survival doesn’t depend on them. The sky's the limit when it comes to spending your budget on the kind of activities, sports, and adventures you’re after. 


Activities & Excursions

Many times you find yourself in a particular place for a particular reason - an island known for the best scuba diving, riding camels into the desert, going on safari, hiking a volcano, playing with elephants - the list of epic global adventures is infinite! But they all come at a cost, especially if it’s the main tourist attraction that provides the main income for the locals. Proper planning and budgeting are key here.

Once you have a list of destinations, make a list of activities and excursions for each location. Find a rough estimate online and assume you’ll get at least a slightly better price in person. That discount can be as high as 50%! If you know ahead of time the biggest adventures you’re looking forward to throughout your gap year, you’ll be mindful of your spending along the way, and might rethink some non-essential spending. Target your top activities and costs, and set aside a Do Not Touch budget for those.


Dining Out & Partying

As we mentioned before, budgeting for food and drinks is a pretty personal decision. Whether you’re interested in cheap eats or fine dining experiences, this can take a huge bite out of your budget. You’ll want to pad the food budget a bit more if you plan on eating out more than 50% of the time.

When it comes to drinking, some travelers are on the party train everywhere they go, and thus they need a bigger budget for beer and alcohol. Other travelers limit partying for financial reasons, or they choose not to partake at all. Depending on where you fall, this could easily double your designated food & drink budget.

Numbeo can also help provide a sense of the average cost for a beer, cocktail, or glass of wine so you can be better prepared.


Shopping

Another personal habit and decision, but a practical one too. A lot of backpackers take what they need at the start of their trip and then plan to swap out clothing, add new toiletries and gear as needed. This means you might need to invest in heavier layers if you head to a colder climate, or hiking boots if you head to the mountains. At the very least, you might be able to rent such items in a specific location.

Set aside a budget for replacing worn out/damaged clothing and picking up any climate-essential wardrobe pieces. This could fall under a need or want expense, depending on how and what you choose to pack!

Souvenirs and gifts are in their own separate shopping category, just be weary of the limited space you have in your luggage/backpack and the fact that you’ll have to carry it throughout the rest of your trip (unless you ship it back home!).


Total Budget

As you can see, there really isn’t a magic number for the most cost-effective budget. There are always unforeseen expenses that will pop up during your trip - the longer you’re away, the likelier it is that your plans will change. You might choose to stay longer in one place than originally planned, you might have to make an unplanned trip to the doctor, and/or you might decide to indulge in many more excursions because you realize the extra cost is worth the once-in-a-lifetime adventure.

Instead of searching the internet for an estimated total cost overall, look at costs from a monthly perspective. If you can estimate a monthly budget that you would like to stick to (and multiply by however many months you plan to be away) that’s the most realistic number you can get. And, it will set some boundaries for you. There’s a lot of lessons in personal responsibility to be learned from consistently balancing your needs and wants.

Based on the recommended budget numbers above, I’d estimate $900 a month as a baseline to spend on the essentials, not accounting for add-on costs for activities, excursions, and shopping.


  • The baseline monthly budget for Southeast Asia can be as little as $700 a month.
  • The baseline monthly budget for Europe should adjust to $1,200 a month or more, depending on each country. 


Bottom line, if you plan to travel across multiple continents, you can expect your monthly budget to fluctuate. If you end up saving a lot of money one month, you can carry it over to spend on more expensive destinations and activities another month. 

Also bear in mind that including multiple continents in one trip is going to crank up your overall cost because of the intercontinental flights you’ll need. It would be much more cost effective to choose one region to travel through on your gap year thoroughly, rather than jump all over the world just scraping the surface of each.


Start saving now

Right now you have the opportunity to assess your savings and start building your funds. Let’s assume you’re planning a gap year for 2021 - that means you have the next 8 months to save up. 

As we shared in the last post, there are multiple ways to add to your budget.


  • Are you employed with a part-time, full-time, or summertime job? See if you can increase your hours or add on another side gig.
  • Birthday/Christmas/Graduation gifts. Can you specifically request contributions to your gap year fund?

  • What about your tax return and that government stimulus check? If those aren’t already committed to other things, put it aside!

  • Do you own anything that is worth selling? You can turn a profit for literally anything on Facebook Marketplace, eBay, or good old Craigslist! You could even join the secondhand clothing community on Poshmark to resell items in your wardrobe.

Create a spreadsheet to forecast what your gap year fund will be when it’s finally time to hit the road. It will be extra work now, but it’s important that you have a number in mind before you start planning the actual details of the trip which we’re covering in the following posts in this series. 


Questions/concerns about budgeting? Get in touch with us.