Book an air ticket to any European country well in advance. Many airlines offer different packages if you buy tickets beforehand. Upon reaching Europe, the ideal thing to do is to buy a pass of Euro Rail, which is quite cheap and offers different packages. Train is one of the most exciting means of travel as you will enjoy different stations according to the scheduled time. Euro Rail travels through several European countries, allowing you to witness multiple cultures and historic places.
Similarly, such train packages are available in Asia (Russia to China), America and other parts of the world as well.
Before you book the Euro Rail passes, you must be aware of its route, so that you can book hotel rooms in advance. There is no need to go for expensive five-star hotels because your ultimate goal is to see the world without spending too much and such luxuries can be enjoyed later in your life.
Cook your own food
If you spend a lot of money eating in restaurants, then there is no chance you can travel around the world in just $500. So the choice you are left with is to have grocery alongside you and cook your own food. It will take some of your time and you may not feel like cooking when tired; however, it is going to be extremely cost effective and easy on your pocket.