A frugal woman travels: can she do it?

 Forecast: 88°/73° and partly cloudy; 

Humidity: 72%

Sunrise 6:04 am., Sunset 6:28 p.m.

Travel is expensive; at least, that's the standard wisdom. But as a person who'd kind of dedicated to living as frugally as I can without driving my family bonkers, I have admired from afar a couple of early retirement bloggers who praise life on the road as being one of both adventure and also economy. So I was very curious, as we began our Panama adventures at exactly the same time as I began my retirement, what our expenses would look like.  

Now that we're nearly done with the trip, I feel like I have a good enough handle on the financial impact that I can make some comparisons.  I think the main summary is this: "short trips are expensive; on the other hand, long trips can be cheaper than not traveling".

This has nothing to do with finance;
I just love this mural I see on my neighborhood walk.

Here are some of the big areas of expenses and my musings on them.

Medical Insurance

My husband is on Medicare Advantage, and traveling to Panama doesn't affect this one way or another. But medical insurance is a huge variable in my own life, especially since I'll no longer be covered by my employer and Medicare is half a decade in the future for me.

This year, I'm using a global medical insurance company; I can do so because I'm spending less than half of the year in the states.  This insurance covers me only in Panama and in the U.S., and I chose a plan with a super high deductible with a lot of restrictions, so there are obvious limitations.  The cost is $284 per month, or $3408 per year.  (I also, because of being a Fulbright scholar, have free supplemental insurance while in Panama, but I fortunately haven't had to access that).

Once I'm back in the U.S., I'll go through my state's website (Pennie) to get ACA insurance, probably. The cost there will depend both on my income and on what the government decides to do that program, but my projections have run approximately $6K to $9K per year, much more than global insurance.  And ACA doesn't cover me outside of Pennsylvania, so I might also get supplemental travel insurance.

Medical costs themselves can be much, much lower overseas -- take for example my recent strep throat adventure, in which five doctors visits and multiple medications cost me a total of $167.34, so low that I don't come close to meeting the insurance deductible.  

So in this realm, it looks like a tiny bit of travel would increase medical expenses (because of buying supplemental travel insurance), but a humongous hunk of travel (being abroad for 6 months or more) slashes medical expenses dramatically.

Transportation

Getting to and from a far-away destination can definitely be a chunk of change. My flights to Panama and Chile were reimbursed by Fulbright, but my husband's weren't.  So that's about $1400 in airfare out of our pockets. 

Now that we're on the ground in Panama, I'd say our transportation expenses are minimal.  It helps that travel within this country is so cheap.  "Cheap" like, it's kind of amazing that this is what things cost here:

• I spent maybe $60 on nine months of local bus tickets for me and my husband.  
• I've taken 55 different uber trips here, for a total of $260.  (Not sure about my husband's trips).
• I had a plane trip to Chiriquí for $124, a bus trip to Penonomé for $10.25 (roundtrip), and a rental car for almost two weeks for $394.  

And at the same time, we gave away our (highly decrepit) car when we left Lancaster.  We'd have had to replace it anyway: it's more than two decades old and was getting to the point where it was failing badly: repairs might start costing more than the car is worth, maybe even more than purchasing a new-to-us used car.  We'll have to get a new one when we get back, but this past year we did not have any auto-related expenses: the year before we paid over $2K in repairs and almost $1K in auto insurance and unknown amounts for gas.  

Ignoring the fact that used car prices are rising (maybe not the kind of fact we should ignore, because that means our trip will make our next auto purchase more costly than it would have been), I'd say our overall transportation outlay is probably lower than a non-travel year.

Housing

We've been staying in AirBnB places while here.  The first place, for three months, was a self-contained one-bedroom apartment with a kitchen and bath; our second place, for the past six months, has been a bedroom inside a larger shared house, with access to the kitchen and the amazing porch. Sometimes we've had a shared bathroom, sometimes our own bathroom.  

It's less space (in some ways) than we have back home, but while we're traveling, this feels like just about the right amount of room.  We don't need basement storage or large private dining rooms when we're essentially living out of our suitcases; shared kitchens and a closet or two for our clothes seems to be enough.  And while we appreciate having our own home to retreat to when we're on our home turf, here in a country where everything and everyone is new to me, I actually like having other people around.  

So the housing costs aren't apples-to-apples comparisons.  When I figured about how much it would cost to rent AirBnB space here (about $1K/month in my neighborhood), I set out to rent out our entire home for about the same amount or just a touch more,  knowing I'll end up paying taxes on the rental income. So, housing breaks even.  

Stuff

We have a long-term AirBnB, but it comes furnished.  We're not doing any furniture shopping or gadget shopping.  

I did mention we're mostly living out of suitcases, right?  I bought a few weather-related clothes (rain poncho! walking shoes that shed water!) when I got here, and I received gifts of other clothes, but I am definitely keeping an eye on those suitcases.  It's not money that's the constraint on acquiring things; it's space.  Forced minimalism makes it hard to overspend, at least when it comes to "getting stuff".

Food/Hobbies/Entertainment/Frivolity

I go to restaurants with friends occasionally and pick up the tab, but we mostly eat at home.  Both restaurants and grocery store food is generally cheaper here. Cheese, milk, and ice cream is more expensive in Panama (dairy is heavily subsidized in the U.S.), so we eat less of that here.  But eggs can be found at my local market $5/30.  Mangos are $1/many.  Bananas are cheap.  Rotisserie chickens are $6.  So we eat well without busting the bank to do so.

I've done a lot of sightseeing, touristy visits (for me, at least: the comparison here is to what I do back home, not to what other U.S. tourists might do in Panama.  Still it's a lot; see this list I put together for my seven-month anniversary here).  

It's hard to make other direct comparisons between what we do back home and here.  Comparison is further complicated because last year I was still employed, but this year I'm retired.  (So last year, for example, my employer paid the bulk of my medical insurance, but now it's all on me).  I'm not sure what else exactly being retired does to our expenses, but I'm sure it has some effect.

The Bottom Line

All-in-all it looks like our monthly expenses overall have been about 60%-70% of what they were before we got to Panama.  I really wasn't expecting that: it's quite a drop.