Oops…found a major budget mistake!
“If all difficulties were known at the outset of a long journey, most of us would never start out at all.” -Dan Rather
Before we started to seriously plan our 2017/18 travel year, I created a detailed budget as a proof of concept. I wanted to make sure the numbers added up and that this trip was not going to eat up every bit of savings we had. To my surprise, everything looked great. For the top line, I used my husband’s income as our revenue number. For expenses, I padded the various budget lines with high estimates, just to be safe. I basically took the cost of living here in Vancouver as the base figures, knowing that most our time would be spent in less expensive places around the world.
But, there was something strange about my spreadsheet. I couldn’t figure out, how did we go from two salaries to one and travel for a year with no major sacrifices? Where was the shortfall? If the numbers were correct, what on earth did we spent all of 2 incomes on, last year? I checked and re-checked and couldn’t spot the mistake. I even showed the budget to my Dad, explaining my general assumptions. And still I didn’t spot the glaring error.
“Traveling is seeing; it is the implicit that we travel by.” -Cynthia Ozick
There is no going back. By now, we are committed. We have booked and paid for half of the first apartment in Barcelona. We have booked and paid for a week in Bali. We are going. No matter that something seemed strange in my calculation that I couldn’t quite put my finger on. It wasn’t until I started to record these first purchases, after paying the credit card bills, my mistake kind of jumped off the spreadsheet, into plain view.
All along I knew that we would be paying our mortgage and rent in various places as we travelled. In effect, our housing costs would be double of what they are presently. That was not a problem because the rental income was offsetting our mortgage, in my mind. It would have been fine to leave these 2 things out of my budget entirely. Instead, I included the rental income and not the mortgage payment. Oops! Luckily, I had enough padding in all sorts of places to claw the shortfall back to flat.
Now that I have removed the cushion, I really have to be more strict about booking our housing. I was creeping up to $130/night in my searches. Reality check! Time to get back down to $100 or less. I managed to secure Barcelona for $86/night for the first 2 months. That has set the standard price, but not necessarily a repeatable floor plan everywhere we go. Part of this trip is learning how most other people live in the world. So each of my kids are not going to have their own rooms, much of the time. I’ve only said I will try to get them their own beds.
“If you wish to travel far and fast, travel light. Take off all your envies, jealousies, unforgiveness, selfishness and fears.” -Cesare Pavese
One of the biggest discretionary budget items is food. In this, all 4 of us can play a role in keeping those costs down. It will be interesting to see how my kids choose to spend the daily allotment. Right now, they are typical teenagers, acting like money grows on trees. I’m curious to see if having more visibility to the raw data will impact their behaviour. Maybe if they are given some responsibility they can learn to manage money in a better way.
“It is better to travel well than to arrive.” -Buddha
Once I was able to drive, my Mother gave over the weekly grocery shopping to my sister and I. We had a list and $100. This was what we needed for a family of 5 for a week. We brought a calculator and weighed everything and had a running total. There always seemed to be about $5 leftover to buy ice cream. This was a great lesson. But, I still feel guilty for how much more than $100 per week I spend on my family of 4 now. I suspect my Mom must have shopped mid-week for other stuff.
“According to Statistics Canada, the average Canadian family spends $9,630 a year on food, which would work out to be about $185 a week. And that’s just food. It doesn’t include personal care, household cleaning, tobacco, alcohol or lottery tickets – things we often add to our carts.” (Saving Money On Groceries – Gail Vaz-Oxlade)
Now that makes me feel a bit better. However, I think we are taking the Canadian average and adding my Mom’s $100 budget from the 1980’s. In all fairness, the extra’s do add up. Kids want a certain shampoo, we need laundry soap, cat food, etc. It does not help that my favourite grocery store added a humongous selection of BC wine. There is also a whole aisle of books.
Back to the budget mistake. Some of you might be surprised to learn that budgeting appears to be a new thing in my personal life. That is true. I’m a little embarrassed to only now be starting to keep a close eye on our spending. For many years, we have been in a great position were there was enough money to cover our lifestyle. By leaving my job and cutting the cashflow in half, I had to take a hard look at spending. Maybe I was finally mature enough to handle this task. Or maybe having more time made me not resent it quite so much. Whatever the reason, I kind of like finding creative ways to cut costs. I don’t see it as a hardship, anymore.
Especially when we are lucky enough to afford to travel and work and home school for a whole year. What an amazing thing. I could not have dreamed this up. My imagination has not been this optimistic. Maybe I have to set my sights a little higher from now on. The future certainly looks bright!
Check out my travel planning video on creative wandering: