2 years ago we started keeping track of every dime we spend and posting it publicly.
Although the idea of living out of hotels came earlier, the goal in keeping track was to prove that we could live out of nice hotels and travel the world for less money than living in central Virginia. (Also, posting the stats I thought it would just be interesting to put an emphasis on transparency as that’s something I wish I saw more of in general).
After two years we’ve learned a lot about what does and doesn’t work, what expenses add up in life (for us food is surprisingly huge), and at the very least I though of it as a way to be transparent.
I should note that we started Aug 2013, but I did a post on expenses of 2014. A little confusing but I decided to do a calendar year post… because, it seemed to make sense. But now we actually have 24 months under our belt.
All numbers are for both of us, Caroline and I. Also, these aren’t just travel/transit expenses, but everything, even in our personal life.
I just want to start by saying that, as noted elsewhere, we are way over our $20k goal. The total for two years is $51,764.79, which is an average of $25,882.395.
So, I’m definitely just going to have to change the proclaimed “goal” in future publications so it says $24,000 (roughly our 2014 total) and not $20,000 a year… because in neither 12 month period did we come under $20,000. Worth a try but… oh well.
Guess our 2 biggest expenses?
It’s interesting because it’s very much like what I said in my 3 fold strategy for earning miles and points; we pay to earn hotel points, and that was our biggest expense at 29%, which I’ll talk more about.
Very close second at 26.5% is food! As I’ve said in many stats updates, I go into the month or destination wanting to be super frugal but ultimately I tend to opt for healthy food, good food and local food.
- Food = $13,761.91 (26.58%)
- Hotels = $15,038.11 (29.05%)
- Flights = $7,846.55 (15.15%)
- Land Transit = $9,422.94 (18.20%)
- Tourist Attractions = $1,510.67 (2.91%)
- Misc = $4,184.61 (8.08%)
$13,761.91 = 573.41 a month
Not much to say about this expense. First, people are surprised how cheap it actually is given that we eat out nearly every other meal.
Trust me, it should be more but free breakfasts go a long way, and there are times where we eat dinner in the club lounge.
And ultimately, there are plenty of options to eat cheaply everywhere. And unlike hotels, third world countries have such cheap food that it can bring the average down a lot.
Yet, it’s still $573 a month, and that average includes traveling in Thailand, free breakfasts, and crazy lounge weeks.
The problem is that I value healthy, good, and local food.
You can always eat cheaply if you stop by the bakery and grab pizza. Always. In eastern Europe often you can grab a giant slice of pizza from a bakery for much less than a dollar. But it breaks all my rules.
1) No one should live on pizza… that’s just gross. 2) 50 cent pizza isn’t good. 3) I can get pizza anywhere, but when I travel around the world, I want to try local foods.
In the end, I love the adventure of trying new foods while traveling. It could be “nice” food, or a whole in the wall where no one has english menus or speaks english. Sometimes it ends in miming and getting something random.
$15,038.11 = $626.58 a month
I’m actually happy with this number, as starting out two years ago, my rent was double this.
Today, I’m in a 5 star hotel that is going for $240 a night. It’s our 4th night here.
Tomorrow we switch to another 5 star hotel, an InterContinental where I BRGed a basic room that went for 290 Euros… but I’m getting it for free. Completely free.
All that to say, considering what we’re getting, $626 a month isn’t bad. I’d never be able to afford these experiences, to be in these locations, or to have this lifestyle without hotel points.
Although, as I’ve said, my agenda with hotels isn’t really to get free hotels, it’s to average down. I’ll probably rake in dozens of actually free nights via credit card points and what not, but I’ve decided that it’s best not to focus on free hotels since I’d be needing 12 months worth. My goal is to have good promotions where I spend $2,000 on hotels during a good promotion and use those points for hotels, basically at a discount.
The other focus I’ve had, which I’ll keep short since I’ve written about this many times, is that I focus on redeeming points for low category hotels. Conventional wisdom is to pay money for cheap hotels redeem points at expensive hotels… but the math doesn’t make sense. The InterContinental Hong Kong is 50,000 points and $200+, but the holiday Inns that are only 10,000 points are often only $100 less, maybe $150 or $200.
In other words, the others that are 1/5th as many points are often only half the cost. And that’s even more drastically true for SPG and Hilton where the top hotel is 18 times more expensive in points than the bottom tier points hotel.
$7,846.55 = $326.93 a month
What’s funny is that we were really on track for this year being an average of $250 and then we did the mistake fare to Beijing, and then we agreed to pay for a flight to fly with Caroline’s sister to Ukraine to help with their adoption.
It’s crazy how quickly a mistake fare can add up. The math is always enticing as I can earn miles, save miles (by not booking the flight with miles), and in the case of Beijing, fly business class. It makes so much sense in my head, although if I put a small amount of effort into earning more miles (by actually doing it every 3 months, adding another bonus to the list, etc…), then it would probably be completely unnecessary. Probably an “it depends” situation like all things.
It’s worth noting that we never pay fuel surcharges on award tickets.
$9,422.94 = $392.62 a month
How do I continually spend 20% of all my money on land transit? I hate transit and yet, I still find myself paying for it all the time.
I think it’s one of those expenses where you say “sure, it’s only 40 Euros for the train” so often that you don’t realize how quickly it adds up. 40 euros here, 20 there, a quick hop into an Uber. And yikes, I spent $400 this month and can’t figure out how.
I’d say that land transit is where I plan the least. I often just stroll down to the train station with minimal research and probably end up paying more than I had planned, especially in western/central Europe. Definitely car rentals add up big, and the worse the experience the cheaper it is. So maybe we pay for comfort too often. I don’t know, I haven’t spent too much on the subject although clearly I should.
I already talked about some of the principles I’ve learned about Miles & Points Strategies, so some of this is rehashing.
Earn ’em and burn ’em
There are few wrong ways to use miles, and even then… it is okay. If you’re earning them for free, learn as you go. Just book stuff yourself and just fly. Even if there were a way to reduce the number of miles used with a fancy trick, I guarantee you it’s a small discount and it would be an increase in effort.
It’s okay to use miles for unpopular redemptions like intra-Europe or domestic.
I think if you paid tons of money for your miles via paid flights or buying miles, these decisions would indeed feel foolish. But the actual foolish thing to do is pay for flights or miles… you just don’t have to.
Hotels never make the stay
If you’re interested in the place you’re going, then you don’t even want to spend time in the hotel.
Further more, my favorite places on earth; Bali, Rajasthan, Sri Lanka, much of the Balkans, Italy, etc… It’s totally funny, I just listed them all off the top of my head, and then I think back to the hotels I stayed while there, and they were all below average. In Bali we’ve spent weeks in a homestay that’s $10 a night, and same in Sri Lanka. Rajasthan and Italy, there are amazing hotels… but we ended up staying in 3 star hotels, Park Inns and Holiday Inns. Clearly the reason I love those paces isn’t the hotel.
Seriously important lesson. I love the Park Hyatt Shanghai or the InterContinental Hong Kong, but it’s not the actual reason I love those cities. So the experiences are fun, but they aren’t important.
The actual best use of hotel points is for low category hotels
Already talked about this plenty.
You should never pay for status
I said this the other day but… For hotels I have enough status to get breakfast (a cost saver) at most all the hotels I stay at. (IHG is the big exception, because they don’t offer free breakfast for any status).
No status was earned via paid nights or flights. But instead, via matches, credit cards, or even award nights that qualify.
In short, the amount of money you save by having status (lounges, upgrades, breakfast, etc…) is paid for by yourself to get the status. Not rocket science, these benefits are calculated. Like those free breakfasts were paid for by you spending 50 nights paying extra money to stay with a particular brand, often not the best bang for buck anyways.
That being said, breakfast is an important thing if you can actually get it for free.
Just this morning I said to Carrie that for me, free breakfasts is the pinnacle of luxury. I wake up and stumble to the elevator and get seated. And instead of cooking or even making or pouring my own coffee, I pick from a ton of food… in this case which includes some nice items I normally wouldn’t pay for, and have coffee made and brought to me.
And the fact that it was actually free… is awesome.
“Cheap countries” are not always cheaper
Just in getting around Yugoslavia in July we spent $686.23 on land transit, partly because the public infrastructure wasn’t great and I wanted to see a lot.
Same in Kenya, we spent a lot of money on doing normal things. A short drive on a map takes forever (and we got two flat tires). Kenya, where you can eat interesting local food for super cheap lead to our most expensive month ever, totaling $4,469.31.
On the other hand, traveling in the Baltics (Finland, Estonia, Latvia) while being more expensive on food, we had an under budget month, totaling $1,603.32. Except for Finland, those countries are cheaper than the US, UK or France… but more developed infrastructure than a lot of the world.
There are plenty of examples of this, with trips to Austria and Italy costing less than our trips to “cheap” countries.
It’s funny because I’ve had friends comment saying that we can live on ~$24,000 because we stay in cheap countries. And I do think that would be a really really good point if we were staying for 3 months at a time. You could pay $200 a month for a place in Chiang Mai, Thailand and never pay for transit, eat for $6 a day… and live the “four hour work week” dream, or whatever.
But I’ve learned that fast travel is more expensive in some places… although probably not Thailand. Another thing to remember, that I’ll say is a valid point, is that most of the world is cheaper than the US.
Without a doubt, most of Europe is cheaper than the US (in nearly every way), and most of the rest of the world is signficantly cheaper. So traveling to “cheaper countries”… is basically traveling. Unless you just rotate between Switzerland, France, Australia and Scandinavia… you’re probably going to be in “cheaper countries”. And my goal is to hit all the countries.
Travels from Aug 1, 2013 – July 31, 2015
Where we’ve been in the last 24 months (not all of these are new countries, but many):
- Hungary (x3)
- Austria (x3)
- Ukraine (x2)
- Italy (and Vatican City) (x3)
- South Africa
- Mexico (x2)
- Hong Kong
- Costa Rica
- Slovenia (x2)
- Bosnia and Herzegovina
(Now in Turkey, but it’s month 25).
I realized that we often repeat the same countries, but if I put a little more effort into seeing new countries, we could easily see all the countries in the world in less than a decade. Very tempting.