re: Tips on reducing costs of a big vacation

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air bnb for cheap as hell places to stay. Also try hostels.com

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Ditto. Also try hostelworld.com

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People routinely travel in central america for less than $10 a day.

My sister spent 4 months in Europe and spent less than $4,000

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This cannot include the price to actually get over there...can it? Assuming a cheap flight of say $750, that leaves $3,250 for 120 days = $27/day. I'll assume a very weak Euro of 1.30 and that puts her right at 21 Euro/day. Assuming she stayed at the cheapest of hostels and paid 10 euro/night, then she had 11 Euro/day to eat and play on. Either she spent all of her time in eastern Europe or there is some major variable here that I am missing.

FWIW, I plan on traveling the world for 3-4 months prior to a MBA. I'll probably budget about 10k to do whatever I want...no plans, just an arrival and departing destination(s).

ETA: And I think 10k is more than enough unless I start flying from continent to continent. If I stay in just Europe, then I will get out for much less. I've seen a lot of the big cities, so I plan on doing a lot more rural/smaller cities along the way which helps.