What kind of life can you live on $40k per year?
At more than $15k below the median household income in the United States, you’re probably imagining a relatively modest existence — one that probably looked a lot like mine did a year ago. Back then, I lived in a two bedroom, two bathroom apartment in Akron, OH. I drove a 2009 Honda, and I went out with my friends and few times a week.
It was a comfortable life, but there was never enough room in my budget for the thing that I really wanted — the freedom to travel.
I realized that if I wanted to have the kind of life that I wanted, I was going to need to seriously reevaluate my priorities. I started looking at every item of my budget, line by line, and if that thing wasn’t moving me toward my goal of traveling full-time, it had to go. It wasn’t the easiest process, but the results were more than worth it.
One year later, I’m traveling the world with my best friend, living and working in a new country every month and having the time of my life. I’m currently writing this from a penthouse on the top floor of a luxury high rise apartment in beautiful Medellin, Colombia.
The apartment has two bedrooms, two bathrooms and floor-to-ceiling windows with a breathtaking views of the city below. There is a gym, a sauna and a rooftop pool in my building which is just steps away from some of the best restaurants in town. And the best part is that I’m doing all of this, including airfare, for the same amount of money (or less!) than I was paying to live at home.
Here’s a brief breakdown of an average month’s budget for me:
- Rent (including utilities) – $750-$1,000
- Airfare between locations – $200-$550
- Food – $600
- Entertainment, cab rides, etc. – $250
Let me just be clear here, that this is actually a pretty generous budget. There are plenty of people who find a way to travel the world for far less than $40k, so if you’re looking to make your escape for less than that, chances are you can find a way to make it happen. From staying in hostels to traveling on container ships, there are countless ways to make travel happen on a shoestring budget.
However, for my purposes, I wanted to see how much I could get for the same amount of money that I was paying to live at home. And it turns out that the answer is quite a lot.
So how did I do it (and more importantly, how can you)?
Untether Your Life
Unless you have some serious cash saved up, the ability to travel the world on $40k/year starts with the freedom to work from anywhere (or at least anywhere with a WiFi signal). Untethering your life can be a long process, but once you’ve done so, your ability to individually optimize your life increases exponentially — including your ability to travel full-time.
Find a Travel Buddy
While it’s certainly possible to travel on your own, having a travel buddy is pretty essential if you want to stay on budget without sacrificing comfort and swankiness. Airbnb apartments can vary drastically in price and quality, and doubling your housing budget means that you’ll almost always be able to find a place that you really enjoy.
For $2,000 per month, you can get some VERY fancy accommodations, depending on the city you choose. Split the rent and get twice the apartment at half the price!
Custom Design the Life of Your Dreams
This isn’t fun, but before you decide to travel the world for a while you should critically evaluate the life you currently lead. What kind of habits do you have, and are they good or bad? How many of them do you want to take on the road with you? Which would you prefer to leave at home?
The change of environment that long-term travel provides gives you an opportunity to jolt aspects of your life that you’re not satisfied with in a different direction, should you choose to do so. Don’t waste this opportunity.
The best part of the digital nomad lifestyle is the way it allows you to fully customize your life to your individual preferences. Do you want to finally learn how to surf? Are you passionate about trying the best restaurants around the world? Do you want to see the Tour de France, run with the bulls in Pamplona, and swim in a Bio Bay all in one year? Determine what you like and fill your life with as much of it as you can.
When your life is untethered, nothing is stopping you from having all of this (and if you plan things correctly, it doesn’t have to be expensive). Figure out what you want to do/see/etc., create a bucket list and start planning to make progress. List out all of the things that you really want, and map out what steps you need to take to get them. Plan your success, not just your trip.
Make Sure You Have “Get Out” Money
Before you take off on your world tour, you need to make sure that you’re financially prepared for whatever comes up on the road. Sure, you may have your travel budget all mapped out, but what about if you get sick or suddenly need to come home?
You need to have money put back so that you can deal with any unexpected costs that may arise. A good rule of thumb is to always keep at least enough money saved up to get your a plane ticket home, first and last month’s rent on an apartment, and whatever else you need to be able to go home if you need to.
Ditch Your Apartment/House
Housing makes up the largest portion of most people’s budget, so chances are that you are going to need to get rid of your place and putting your things in storage. While you’re at it, consider using this chance to simplify and get rid of things that you don’t use.
A storage unit might cost a lot less than your rent, but it’s still a significant amount of money (plan on $700+ for a 10×10 climate-controlled storage locker). The fewer things you have, the smaller storage unit you can rent, and the less you’ll need to pay.
Pick a Destination Wisely
Your $40k will go a lot further in some parts of the world than in others, which is why it’s a good idea to do some research ahead of time. Digital nomad hotspots like Medellin, Colombia and Sofia, Bulgaria combine an incredibly high quality of living with unbelievably affordable prices, so start there. This enables you to ball out, even on a budget.
Make sure you build in some accountability to help you stay on track, because it’s easy to fall off of the wagon – whatever wagon that may be. If you treat your travels like a nonstop vacation, it’s easy to gain weight, miss deadlines and end up not living the life of your dreams. Keep yourself from turning your workation into a disaster by holding yourself and your travel companions accountable (and expecting the same from them).
Another thing that can get in the way of living your best life is loneliness: it’s something you see in Digital Nomad forums and Facebook groups all the time. Fortunately, if you travel to larger cities there’s no shortage of meetups, group sporting events, sightseeing tours, etc. that you can jump in on to make friends and stay social. Plus, when you travel in groups tours tend to be cheaper.
Being flexible about your travel dates and travel destinations is one of the best ways to save money on the road. Airbnb will often give you a significant discount if you book for a month or more, and sites like Kiwi let you see the prices from one city to basically any other city in the world so you can pick the best deals.
Living an exciting life of travel doesn’t have to be a privilege relegated to the super rich. If you untether your life and plan your budget wisely, you can absolutely see the world in style for what you’re currently paying in the US.