The Best Way to Save Money: World Travel

If you needed to cut your expenses by, say, about a thousand dollars each year, how would you go about it?

Most people start by cutting back on going out to eat, avoiding online shopping, or creating a stringent budget to control expenses.

But it turns out there’s a much easier way to cut your expenses by 10% or more: start traveling the world.

How Living Abroad Is Cheaper than a Lease

To understand why it’s cheaper to live abroad, let’s do some quick math.¹

Start by making a list of all the bills you pay that are related to your living arrangement.

As an example, when I lived in Missoula, Montana — which has a pretty low cost of living — my bills looked like this:

1. Rent: $675
2. Electric: $100
3. Gas/Water/Sewer: $35
4. TV/Internet: $125
5. Renter’s Insurance: $25
6. Biweekly Cleaning Service: $160²

So, all things included, I spent $1,120/month to live there.

The Secret of the Shared Economy

When you decide to leave your lease behind and start traveling permanently, something magical happens: all the extra bills go away.

When you search for an apartment in Prague for a month on Airbnb, there are more than 300 results under $1,120/month.

“But wait,” you say, “your rent was only $675 before — isn’t that way more expensive?”

It’s cheaper,³ and here’s why:

When you rent a place through the shared economy, all of the additional costs are included.

Renting an apartment in Prague for $900/month includes electricity, internet, utilities, and sometimes even a regular cleaning.⁴

So that $900/month means $900/month. Not $900 plus a bunch of extra living costs.

What If I Want to Stay in Manhattan?

Some places are extremely expensive to live. If you want to spend a while in Manhattan, London, Sydney, or other cities with a high cost of living, it can be challenging to find something lower than $1,120/month.

But here’s the thing: it can still be less expensive than your lease.

Taking Advantage of Averages

For argument’s sake, let’s assume the place in London costs $2,000/month. You’re out of pocket an additional $850 for the month over what you would have spent in your lease.

You can make this affordable, though: take advantage of less expensive places to offset costs.

For example, you can spend as little as $300/month for a place to live in Chiang Mai, Thailand — this is a place with wifi, air conditioning, and all the amenities.

If you were to spend half your year in low-cost cities like Chiang Mai and Prague, and the other half in more expensive cities, you might schedule something like this:

• January and February in London.⁵
• March through May in Prague.
• June and July in Chiang Mai.
• August and September in Barcelona.
• October in Paris.
• November and December in Ho Chi Minh City.

Using Skyscanner to determine the cost of flights, and Airbnb to determine the average cost of renting a place for a month, this comes out to an average $1,040/month.

This is a savings of about $1,000 for the year when compared to my costs in Missoula.⁶

And it’s not just a $1,000 savings.

You’re saving $1,000 by traveling to 6 countries instead of staying in Missoula, Montana.⁷

You Can Save Tons of Money by Traveling the World

It sounds completely counterintuitive, but it’s true: you can save a ton of money by giving up your lease and renting apartments from sites like Airbnb around the world.

To recap: once you’ve factored in the rest of the costs of living there, a $675/month lease in Montana is more expensive than renting apartments around the world for a year.

This isn’t the result of a complex scheme to save money. It doesn’t even require making sacrifices. I’ve been living quite comfortably in Chiang Mai for a month, and I’ve spent less than a thousand dollars total since I’ve been here.

So remember: the next time you need to save up for a big expense, consider the traveling the world.

Yay! Math!

I hate cleaning toilets and scrubbing floors, so I build the cost of a biweekly cleaning into my rent. If you haven’t tried this, I can’t recommend it highly enough — especially if you live with someone else.

Also worth noting are the more than 20 listings under $675/month.

If the cleaning isn’t explicitly covered, you can usually negotiate a small additional fee to add that in before you finalize the stay.

Actually, don’t go to London in January unless you like being cold and damp.

The numbers get crazier: someone living in San Francisco, where the median rent is about $3,000, would save about $28,800 each year by traveling the world. That’s fucking nuts.

Montana is wonderful. . .for 3 months each year. The other 9 are something like this.