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An adventure travel

Question: Hi, I can already hear you replying "are you nuts? Worry about reducing debt and stockpiling your emergency fund first!" But I feel that it's one of those things that you must check off the list, before I am tied down with kids. Do you have any suggestions on how I can fit this in without dropping the ball on my financial, educational and career goals? I am about to start graduate school, and could take some time in between semesters or wait until after I graduate. I was thinking 4-6 weeks of adventure backpacking. 1-2 weeks at a time wouldn't work for this type of excursion. PS -- I do love listening to your show! Thank you. Mia, Marlborough, MA

Answer: Go! You're not going to hear from me that taking an adventurous backpacking trip is nuts. (I might say I'm jealous but that's a different story.) The economy may be down, but that doesn't mean your spirits should spiral lower, too. You want to take a break to refresh your mind and body and spirit before during or after graduate school? That's wonderful. So let's make that happen without taking on any or much debt.

One questions is how to hike and walk for several weeks frugally? A trip with a backpack should be a low cost excursion anyway. Better yet, there are plenty of deals in the travel business right now, from low cost flights and cheap excursions to price cuts on rental cars and hotel rooms. Travel is down, and businesses of all kinds are cutting deals to stay in operation.

The real trick is to carefully plan ahead. Map out your route. How will you get to where you are going? Where will you stay? What is your budget? It's so much easier to be frugal when you take the time to do research and planning. We all end up spending more than we should when we rush to book a flight or dash off to the grocery store at the last minute. With research and planning you'll be able to find and book deals, create a tight budget that you can live with during the trip.

If the numbers still don't quite work out, consider hiking for 4 to 5 weeks rather than 6 or choosing a less expensive spot for your adventure. It will still be worthwhile, and you'll have plenty of opportunity to go on long trips later in life--even with kids in tow.

Of course, there are the bigger financial questions, such as the debt burden you're taking on at graduate school and the kind of income you'll earn when re-enter the job market. Still, with careful planning and a frugal budget you should be able to come up with a trip that's both cost-effective and soul nourishing. It's also good to go off on a trip like this before you embark on your new career. That's an adventure in itself. .

Have fun with your frugal adventure. Let us know how the trip goes, and relay any "frugal" tips you pick up along the way.

04/24/09 by Chris Farrell

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Go on trip

Question: My wife (30 yrs old) and I (31) have been saving for multiple years to take a 6 month world trip and I am hoping you'd give me your opinion if it is too financially risky to take this trip. I can take a leave of absence from my work with the expectation that I'll still be employed when I return. My company is an FFRDC [Federally Funded research and Development Center] so it is relatively secure. My wife will have to quit her job and search upon return. However my job is 2/3 of our income and we could live off my job alone if needed. We rent so we should be able to cut most expenses while we're away. We have zero consumer debt, though we have $45,000 in federal student debt at 2% APR. We estimate the trip will cost $30,000 and have $40,000 so that we have a good buffer. This is not our only savings as we have been saving for retirement for multiple years and already have about $100,000 toward retirement in our tax advantaged plans. We also have several months (~4 mo) expenses saved up in the bank for a rainy day. However I am still a little worried. With the poor economy and losing 6 months of pay is this just foolish conspicuous consumption that will put my wife and I in financial peril or is this a small, calculated risk which, given we are young, can course correct even if the unexpected happens? Obviously I'd love to make this trip, but I like feeling financially secure as well. First Name: Nichols, Redondo Beach, CA

Answer: Okay, I'm jealous--really jealous. It sounds like a wonderful adventure. I guess I'm supposed to act like a sober-minded guardian reminding people not to take unnecessary risks when the economy is down. But I can't do it. I don't believe it. As the 15th century French poet Charles D'Orleans wisely wrote, "It's very well to be thrifty, but don't amass a hoard of regrets."

You can't get rid of the risk that when you return you face a rough time. It's in the nature of your adventure. But you've carefully thought through the risks and rewards of taking the trip, and you've done a lot to minimize the risk of hitting a tough patch when you return. You've prepared your employer for your leave. You've saved a lot, leaving yourself a decent margin-of-safety to fund your wife's job hunt when you get back to California. The global downturn also means that in many places you'll be able to take advantage of cut-rate prices. Bon voyage.

10/06/09 by Chris Farrell

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