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John and Mandi

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Pan-Am Planning - Budgeting

Oct 21, 2016
by John

Building a budget is not easy, especially for a trip such as the Pan-American Highway. Our approach is more of a balance of the known, hopefully leaving enough money for the unknown. While there are several expected one time expenditures, we try to retain as much flexibility with the daily expenses as possible. We don't fret when we exceed our food budget but manage to cover the difference with what is remaining under our miscellaneous budget. We are more focused on the overall average, and what is still in our savings account, as that determines whether we should continue heading south or if we need to park the van and get jobs.

the overall amount needed can become an overwhelming number, being prepared is better than not

During our trip prep, while we were saving, we spent hours pouring over the expense information published by those who had already completed, or were still driving, the Pan-American Highway. Not only did it help us start to formulate how much we thought our trip would cost, it also taught us a few things we didn't know about or never thought to consider. We also reached out to several travelers and were almost always told to budget between $60 to $80 per day. While the overall amount needed can become an overwhelming number, being prepared is better than not.

Our methodology is not as cut and dry as building a budget for each country, which is another solid approach. We just prefer to work with a daily average, as long as we are keeping it under our projected average we should be okay. There are caveats, dangers if not managed properly, such as making sure the one time expenses are absorbed while maintaining the overall trip average. This system is more akin to having an organized slush fund, discipline is necessary in making sure it all works out in the end, true for any budget.

Seriously guys, a smile goes a long way

Seriously guys, a smile goes a long way

For our example budget, we've made some major assumptions, such as two travelers driving the Pan-Am over 18 months (547 days) in a single vehicle, and estimated all expenses in US dollars. We also did our best to come up with decent figures for the one time expenses, even though some of them are ranges due to differences in rig size and travel style. Most of these numbers should be used as a guideline and not be interpreted as being entirely rigid. There are crafty ways to lower costs and alternatives can present themselves, like the year when Ferry Express started taking both people and vehicles across the Darién Gap, just don't count on it ever resuming service. Also, prices do increase, sometimes unexpectedly, an unfortunate fact of commerce.

discipline is necessary in making sure it all works out in the end, true for any budget

Example Budget

We believe it is easier to start with an example budget, then step through the different expense items, attempting to explain them. In all of our research we came to the conclusion, and were told by several Pan-Am veterans, that at least 18 months should be allotted to traverse Mexico to Argentina. While it is possible to complete the trip in one year, many who start with a 12 month plan end up extending it to just under two years.

It is important to reiterate that there are two main types of expenses, one time and daily. While both are broken out below, we feel it is pertinent to also look at the overall combined daily average. Again, we based all figures on two people traveling in one vehicle, there are two of us and the majority of the expense information available online is for couples. Sorry solo travelers, you're on your own.

Estimated Daily Budget

Monthly Total: $1,800 | Per Day (30 days): $60.00
Communication ($1.50/d) $45 2.5%
Entertainment ($3.50/d) $105 5.8%
Food ($22.00/d) $660 36.7%
Living ($10.00/d) $300 16.7%
Miscellaneous ($3.00/d) $90 5.0%
Transportation ($20.00/d) $600 33.3%
Monthly Total $1,800

 

Adding all of the estimates together results in a 30 day monthly total of $1,800 or $60.00 per day. That amounts to $32,820 for 18 months (547 days x $60 per day). While not all categories are relevant to all travelers, this should provide a good starting point. Also, some countries cost more than others. Estimating the costs for all countries over 18 months will inherently create disparities, some will be under while others over. Ultimately we all try to ensure our overall average is at or under what we budgeted for. That does require discipline. When in Baja, it is easy to eat cheaply and free camp while limiting driving, averaging under $40 a day. Instead of spending the difference, it is advantageous to bank the savings to later offset a more expensive country. Worst case, some extra money is available at the end of the trip or for emergencies... never a bad thing.

Estimated One Time Expenses

Total: $9,000 | Per Day (547 days): $16.45
Border Crossings $950 10.6%
Baja to Mainland Ferry $250 2.8%
Language School $300 3.3%
Darién Gap $2,500 27.8%
Galapagos Islands $2,500 27.8%
Machu Picchu $500 5.5%
Trip End Flights :( $2,000 22.2%
Total $9,000

 

We decided to include the most common major one time expenses. There are many other big ticket add-ons available throughout the trip. It is essential to budget for every expected item, or have extra money available to absorb any outliers. The cost of shipping your overland vehicle home, which isn't included in our example budget because many choose to sell it in South America, could add another $3,500 to the one time estimated expenses.

Estimated Trip Total

Daily Expenses of $32,820 + One Time Expenses of $9,000 = $41,820, or $76.45 per day.

Wow, crazy close to the $80 per day estimate we've been told by many. Just remember, something as simple as deciding to ship your rig back to the states (roughly $3,500) could add another $6.40 to the overall daily average, making it $82.85 per day.

Daily Expenses Explained

For simplicity and ease of tracking, we grouped all daily expenses into 6 main categories based on a 30 day period. This provides a little flexibility within each one. For example, when camping at Lake Atitlan, it is more convenient to use lanchas or tuk tuks to access the different communities. The offset of fuel from not driving to those locations during the time spent there should cover the additional mass transportation expenditures. The same is true for eating out, absorbing higher than normal restaurant indulgences by switching to cooking on the cheap can keep the overall expenditures for food within the bounds of the budget.

Communication (Cellular Data, Locator Beacon)

Every traveler decides the level of connectivity they desire to have. Many pick up local SIMs to stay connected with family and friends (who are obviously terrified) back home. Having a SIM is also convenient for using iOverlander, Facebook, Instagram, WhatsApp, banking apps... the other important stuff.

Local SIMs w/ data at $30 + Locator Beacon at $15 = $45

Entertainment (Entrance Fees, Excursions)

It would be hard to drive the Pan-Am and not visit any ruins, waterfalls, swimming holes, dense jungles, hiking trails, museums, etc. The same can be said for whitewater rafting, snorkeling, tubing, zip-lining, sailing, volcano boarding, or whatever else that is happened upon. Some months may have very little being spent on entertainment while others could be over three times the budgeted amount.

Entrance Fees at $55 + Excursions at $50 = $105

Food (Dining Out, Drinks, Groceries, Potable Water)

No matter what, we have to eat. Food is one of the categories that takes a sizeable amount of every budget. Tacos in Mexico, Stew Chicken in Belize, Guinea Pig in Peru... the local delicacies are almost endless. Pizza, oh, don't forget about pizza... or cappuccinos. While it's possible to subsist on beans and rice, almost everyone succumbs to trying the traditional local fair and splurging on gringo food when available.

Dining Out/Drinks at $190 + Groceries at $450 + Water at $20 = $660

Living (Accommodations, Cooking Fuel, Laundry, Medical, Personal Care)

We all plan to live in our vehicles for the duration of our trips. That being said, the occasional hotel is not as uncommon as one would think. Mixing free camping with cheap camping can open up the possibility for a random night spent in a cozy room complete with a real shower and a big bed. Our estimate is quite conservative, this amount should be higher if you plan to indulge frequently.

Camping at $250 + All Others Combined at $50 = $300

Miscellaneous (Gear, Gifts, Souvenirs)

The catch all category that mustn't be ignored. Almost everyone "misplaces" something important along the way. It is also nice to be able to pick up a handmade item as a keepsake every now and then. We believe there is no better way to remember a place than using something you brought back home, like a quilt from Guatemala ($40-$60). This category also makes a nice emergency or extra money fund.

Gear at $30 + Gifts at $30 + Souvenirs at $30 = $90

Transportation (Fuel, Mass Transit, Tolls, Parking, Maintenance, Repairs, Insurance)

Our vehicles are the most important members of our little tribes. They transport and shelter us, we must care for and feed them appropriately. Most of us start our journey with our rig in tip top shape, that doesn't mean they won't need a bit of extra maintenance above the normal services along the way. Fuel, of course, is a substantial expense and must be factored according to MPG.

Fuel at $400 + Maintenance at $100 + Ins at $75 + All Others at $25 = $600

One Time Expenses Explained

There are several expenses that are expected when driving the Pan-American Highway. Even though we treat them as fixed costs, they do fluctuate. While not everyone chooses to visit the Galapagos, we all must pay the border fees and shipping costs associated with the Darién Gap. The following are some of the most common one time expenses with approximate costs:

Border Crossings - $950

Some borders are free while others can be as much as $320 just for the visas. The stated amount is overestimated a little and excludes the Eastern Coast of South America, Venezuela through Brazil.

Language School Instruction for 2 Weeks - $300

Almost everyone attends Spanish school at least once, many of us need much, much more. Currently the average is sitting right at $75 per person, per week. It does not include accommodations or food so sometimes additional costs are incurred, such as a home stay or apartment rental.

Baja Ferry to Mainland Mexico - $250 to $500

The ferry fee is dependent on vehicle size and weight. Most rigs fall under the minimum size so we will use the $250 in our approximations.

Dive Certification - $500 to $800

Utila, Honduras, is a popular place to stop and get certified in open water scuba diving. It has become one of the most recommended experiences from many overlanders. A private room and bath for 5 nights with up to 6 dives can be had for $600 per couple.

Darién Gap (Vehicle/Flights/Accommodations) - $2,500 to $$$

Shipping the Gap is one of the most expensive endeavors each and every Pan-Am traveler has to endure. Again, vehicle size dictates cost. Most try and split a shipping container and either fly or sail to Cartagena. Our rough estimate includes the cost of flights, hotels, and food while waiting for your baby to arrive.

Galapagos Islands - $2,500 to $12,000+

There are two main ways to visit the Galapagos Islands, a cruise or island hopping via planes and boats. Several travelers have managed to piece together a wonderful island hopping experience for roughly $2,500. Others have scored last minute cruise deals for $2,000 a person. It is possible to do both, getting close to or exceeding $8,000.

Machu Picchu - $500 to $1,200+

While there is a back way to access one of the world's most famous archeological sites, many recommend taking the train to Machu Picchu as it is much easier. Those wanting to retrace the Inca Trail will need to pony up quite a bit more money to do so, $560 to $1,600 per person. $500 seems to be a solid estimate for a reasonable visit.

Trip End - $2,000 to $5,500+

Flying home at the end of the journey is usually the last thing on any Pan-Amers mind, as is comprehending what home is. Unfortunately, most of us must do it, roughly $1,000 each to get back to the States. If the trusty steed is making the voyage too it could cost another $3,500, give or take depending on rig size and destination.

What Isn't Included

While we feel we did a pretty good job of estimating a standard 18 month Pan-American trip, there are just too many discretionary items that must be considered when refining your own budget. Things like flying home for the holidays, major repairs, diving the Blue Hole in Belize, flying over the Nazca Lines, visiting Rapa Nui (Easter Island), taking an Antarctic Cruise, apartment rentals, health insurance, yoga retreats, emergency medical treatment, the list just goes on and on.

being crafty can add some flexibility to your journey

Additionally, we didn't account for any ways to reduce or avert costs. Some travelers get simple jobs every now and then to help offset overindulgences or to re-fund their dwindling accounts. It is hard to plan for a guaranteed cash infusion from the onset, capitalizing on them while on the road can make the experience much better. Bar tending a little can cover those extra drinks and rowdy nights, WWOOFing can put some high quality veggies in your belly...just don't expect stateside wages. Also, several travelers have shipped to Mexico from Buenos Aires and driven back to the States for the same or less than what shipping direct would have cost. Our point is, being crafty can add some flexibility to your journey.

Don't Wear That Brazilian Bikini

Cover your ass, a little. Even though our example budget averages out to be $76.45 per day, it may be necessary to build in an extra cushion and sock away some reestablishment money for after returning home. Just like the budget, this is subjective but something we feel is very important. Needing a major repair or an emergency trip home can wreak havoc on any budget. Rounding our estimate up to $80, over the 547 days, provides almost $1,800 to keep in reserve or as a rainy day fund. While it may be necessary to stay at your job a little longer, targeting $50,000 for the trip would be a much more prudent approach. The extra $8,180 could mean reaching Tierra del Fuego or not needing to eat only ramen noodles while you are hunting for a job and suffering from post trip depression, once home.

Do you really need that much money to drive the Americas? Of course not. Everyone's expectations will ultimately determine how much they think they should have and/or intend to spend. But looking at the reality of those that have gone before, $42,000 to $50,000 makes for a pretty damn good trip.

Something to Consider

An 18 month trip is phenomenal, an even longer one more so. Considering that most costs, even a large chunk of what we placed under daily, are somewhat fixed, it is possible to increase the length of the trip without proportionately increasing the costs. What we mean is, once you have a strong idea about what you are going to do and where you are going to drive, they become fixed costs. Taking two months to traverse and experience what you planned to do in one month shouldn't cost twice as much. Communication, Food, and Living are truly the daily expenses, everything else is just distributed for ease of budget management, except for vehicle insurance as it is usually per month.

slowing down enables many travelers to reduce their daily average while only slightly increasing their total trip cost

Using our example budget above, which covers the entirety of the Pan-Am, 6 additional months shouldn't increase the budget by $10,980 ($60 x 183 days), assuming everything else about the trip remains the same. Communication, Food, Living, and Vehicle Insurance amount to $1,080 per month, or $36 per day, meaning 6 additional months should only increase the budget by $6,588 ($36 x 183 days), since everything else is already accounted for. Of course, your overall trip would now cost more at $48,408 but would be less per day at $66.31 for 730 days, or 24 months. Slowing down enables many travelers to reduce their daily average while only slightly increasing their total trip cost, not as much as one would assume.

Additional Budget Resources

 

A special thanks goes out to Josh & Jenna (Travel Amateurs) and Simon & Irene (Across the World) for helping us gather some current figures to use in our estimates. We love and miss you guys!


Say what? (2)
Oct 21, 2016 at 01:31 PM
Well done! This post plus the links to the other budget posts provides a great start for those planning this trip in the future!
Oct 22, 2016 at 12:29 PM
Thanks Josh! We hope it will help others while giving back a little to the community that got us to where we are in our own trip.
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