The Year of Living Frugally – Week 5

Savings Goal for the Year

This morning when I woke up – I was out of beans (of the coffee variety). For those of us addicted to this country’s version of corporate-endorsed legal speed – that presents a problem. Before I had a chance to really wake up, I put on my house-slippers, threw my backpack over my shoulder and started walking to the local grocery store.

As I was walking, I momentarily had the feeling as if I were in Mexico heading to the mercado. The sun was shining, there was a light offshore breeze that smelled of dry inland air (versus the usual damp briny-smelling air), and I felt particularly buoyant.

Why the change? Was it a lack of stuff surrounding me in my new home? The absence of a television (no longer hypnotized by the great unblinking eye…)? Maybe it was the presence of a long-term plan in my life now?

The closest I could figure was that since I had made changes – and created a plan, I was much more aware of the present – and had been spending much more time there.

This is a feeling I usually do not experience when walking to the grocery store (at least not in the last few years) – unless I’m on vacation. Vacations are all about practicing “presentness”.

This may seem counter-intuitive – the long-term plan leading to more awareness of the present.

On the surface, not having a plan seems to be the best answer for experiencing more “presentness”. Go with the flow, ride the waves that life sends your way, and remain aware of your surroundings.

This makes sense only when one has no responsibilities.

While the last two years of my life have been productive, they weren’t necessarily directed towards any long-term goals.

Moving back to California from Minnesota, attempting to pay off the debt, reconnecting with surfing and deciding if far-northern coastal California is the place I want to put down roots – these all led to a state of surviving. These were all worthy endeavors, but I was approaching them like a pinball – reacting to whatever obstacle was the largest at the time. I was just trying to survive.

Surviving can be a trap. It made me complacent, in some ways. Does “just surviving” lead to low expectations? Reacting instead of acting? I survived the work day – what is on TV tonight?

What does it take to thrive?

Part of thriving (for me) has been having a plan.

Freed from my television, freed from so much of my stuff – my distractions – my focus began shifting towards the overall plan. One of the end-goal possibilities of The Year of Living Frugally is the Year of Living Hispanically – the extended travel/surf-trip/resume builder.

I hear people make plans like these quite often. Most people end up not going, or turning back sooner than expected – because they did not realize how much money it takes (while some people do have the innate ability to just go – and let the chips fall as they may).

Is it financially feasible for someone in my situation?

Back home, fresh coffee brewing, it’s time for…

Estimating the Cost of One Year of Latin-American Travel

Continuing on from the original concept of this idea, leaving a year from now and driving from California through Mexico, Central America, the length of South America and back – I would spend the trip becoming fluent in Spanish, learning about other cultures, maybe catch the odd wave or two – and generally see what the western hemisphere has to offer.

It would probably be a good idea to figure out how much money is necessary before arriving in Tierra del Fuego.

First, there are monthly expenses for maintaining the status quo in the states. I would like to have the option to return – for now. So I would need to set up an automated pay system to cover student loans, storage fees, etc.

Maintaining Status Quo in States

Student Loans: $231/month for 18 months (1 year of travel and a 6-month payment cushion) $4158
Storage Unit: $34/month for 18 months: $612
Billpay Service: 18 months for $125.10
Surfline : 12 months for $59.95
Skype: 12 months for $60
Web-Hosting: 12 months for $83.40

Maintain Status Quo in States Subtotal: $4770

The 18-month payment period is to give myself a 6-month cushion in case of emergency or … any sort of emergency (financial, medical, surf…). Besides, I want to make sure my debt is well-taken care of in case of a problem. I wouldn’t want anything bad to happen to my debt…

Medical

Immunizations ($300)
Typhoid (need booster?)
Hepatitis A (got it)
Hepatitis B (got it)
Diphtheria (got it)
Tuberculosis (is there one?)
Rabies (maybe)
Yellow Fever (definitely, maybe necessary for border crossing)
Meningococcal meningitis (optional)
Japanese B encephalitis (optional)
Anti-malarials (necessary in some areas of Central and South America)

Dog Preventive Medical ($200) – just a guess for now.

Health Insurance: $388 for $1000 deductible, $340 for $2500 deductible – $100,000 maximum, includes emergency airlift (and surfing is not one of the restricted sports)

Medical subtotal: $840 – $888

The range is due to the difference in Health Insurance costs based on the size of the deductible. Instantly, one may think: “It only costs $44 dollars to save $1500 in case of an accident – must be a great deal”. This rate was only good for covering accidents outside of the United States – because everywhere else in the world does not charge so much money. I have the feeling that $1000 will buy a lot of medical procedure where I’m going. And if I went over that first $1000 it would probably be trip-ending anyways (and I would be heading back to work after healing), so that extra unlikely $1500 doesn’t make a difference at all – at least not $44 worth of difference.

Border Crossing Fees and Visas

Mexico – $20 visa – border to Guatemala $20
Guatemala – El Salvador – free as part of the CA-4
El Salvador – Nicaragua
Nicaragua – $5 visa – border to Costa Rica $3
Costa Rica – border to Panama $5
Panama – $5 visa- Columbia
Columbia – Ecuador
Ecuador – Peru
Peru – Chile
and back…

Border Crossing Fees and Visas Subtotal: $300 (estimated)

Just a rough estimate. The numbers that are up are from a year ago. Still more research needed for the remaining countries. A bigger expense will be the Panama to Columbia ferry.

Daily Expense

Mexico – $40
Guatemala – $15 – $30
El Salvador – $25 – $30
Nicaragua – $15 – $25
Costa Rica – $35
Panama – $20 – $30
Columbia
Ecuador
Peru
Chile

Daily Expense Subtotal
Cheap – $20 per day: $7300
Moderate – $30 per day: $10950

I think that by making extended stays in areas – and paying by the week – that this number could reasonably be on the cheaper side. (Especially with camping and sleeping in the truck or tent when possible)

Transportation

Truck Insurance : $500 ($235 for a 1-year Mexico Policy, $414 for premium policy)
Registration: $70
Gas – 20000 miles total – 1000 gallons gas at $4/gallon = $4000
Maintenance: $430

Transportation Subtotal: $5000

Once again, only a really rough estimate. Total mileage is difficult to estimate at this time. Same with gas prices (but they tend not to differ from USA prices by too much.

It’s a rough estimate, but I think most of the major expenses are covered.

Maintain Status Quo in States Subtotal: $4770
Medical subtotal: $840 – $888
Border Crossing Fees and Visas Subtotal: $300 (estimated)
Daily Expense Subtotal $7300-10950
Transportation Subtotal: $5000

Initial Total: 18210-21904

For planning purposes, I have to assume that the cost will be the more expensive of the range, and add 10%.

Trip Total: $24,094.40

Before I could take such a trip, I would have to finish paying off the credit card debt, which currently sits at about $7600.

Savings Needed: $31,700

Okay, now this is getting a little depressing.

Spread this out over the remaining 11 months and the per-month savings needed is only:

Savings per Month Needed: $2882

Since my take-home pay is currently sitting at $2675/month, there may be a problem.

I may need to work more overtime.

My March savings should give me a good idea of how close I can get. Just off the top of my head, if I take the February savings ($277/month), plus the credit card payments ($400/month), and the rent savings ($575/month). That already puts me at saving $1050/month, which is respectable (?), but a bit off from $2882/month.

The difference, ~$1800/month, is no laughing matter. I will not even think about what that is per day until I see if I can bring that number down through cutting expenses in March.

The frugal march goes on…

(continue on to Week Six)