Travel Funding: Top Saving Tips
The faster you save, the sooner you can hit the road!
Top 8 Saving Tips for Travel
1. Track Your Current Spending
In order to establish a savings plan, you need to understand how much money you make and where it all goes. Keep track of every single quarter you spend for a few weeks or a month.
Here are a few helpful budget apps: Dollar Bird, Level Money, Mint.com and Pocket Expense
(I currently use Dollar Bird to track my spending while traveling.)
2. Make a List of Monthly Bills
Write EVERYTHING down: rent, utilities, cell phone, student loans, Netflix, etc. Separate “needs” and “wants.” The “needs” column should only include housing, food, transportation and healthcare. Everything else, even my MLB.com subscription, is frivolous.
3. Cut Expenses
Where can you cut expenses? Remember “needs” versus “wants.” You NEED a place to live, but you won’t die if you cancel your Amazon Prime membership. Can you share someone else’s Netflix/MLB/Pandora account? Find a cheaper gym/apartment/car insurance plan. Get a roommate. Rent out your spare room. Move into your friend’s spare room. House/pet sit. The options are endless. Get creative. How bad do you want to travel?
4. Sell everything
I admit it. I collected Hard Rock Café shot glasses when I first started traveling. They sat on a bookshelf at my parent’s house accumulating dust for years, while I was living in other places. One day, I put them in shoeboxes. Six years later, I decided it was time to sell them. They were eBay gold and sold instantly.
Admit it, you know you still have your old Troll doll collection sitting in your mom’s basement.
5. Minimalism
Fight Club was right. The things you own, own you.
I believe it’s better to invest in experiences. There’s a new car/iPhone released every year, but there’s nothing that will replace my travel adventures. I’d rather be the old person with tons of cool stories than a house full of useless junk that my nephew will have to sort through after I’m gone.
Set a deadline before your trip. (I suggest a month before a short trip and six months before a long-term trip.) After the deadline, you can’t buy anything that isn’t for your trip. Ladies, this includes cute shoes and home décor items.
The amount of luggage you pack controls you, too. Don’t worry, I’ll cover packing in another post.
6. Make More Money
If you need more money, go out and make more money. It’s really that simple.
Get a bar job, deliver pizza or invest in the stock market. The options are endless. Bartending and waiting tables funded majority of my travels. I loved the bar world and met some amazing people.
Financial guru Dave Ramsey mentions a story in one of his books about a man who delivered pizza to get out of debt. It works the same for traveling.
What pays the bills doesn’t define you. You should always be working toward a larger goal. Who cares if your neighbor judges you for delivering his pizza? When he sees your African safari photos on Facebook, he’ll be delivering pizzas with you.
7. Debt
My ultimate goal is to have no bills while I travel.
If you have debt, I would advise using the above tactics to minimize your debt before a long-term trip or consider working while you travel. Or check out a Dave Ramsey book from the library. I will focus on both working abroad and eliminating bills in a future post.
For student loans, consider saving the minimum payment for the months you will be gone but include a few buffer months when you return. Put this in a separate savings account so it can draw interest during your travels.
8.Set Weekly and Long-term Goals
Now, you should have the following written down:
1. Record of your current income and spending habits
2. List of your monthly bills
3. List of ways to cut expenses and make more money
Now, put the plan in action. Set weekly and long-term goals for how much you will be saving. Give yourself a budget for the week. Personally, I like to save 50% of my income, but I am extreme. Do what’s best for you. The more you save, the quicker you’ll be riding a camel in Mongolia.
READ NEXT:
Travel Funding: The Cost of Traveling
I quit my first “real” job as a graphic designer at a newspaper to move to Australia on a one-year work visa. One of the middle-aged copyeditors at the paper was baffled, “How are you going to live?,” he asked. “Do you have a trust fund?”
I shook my head and replied, “No. I saved and plan to work while I’m gone.”
Traveling is easier than you think and is probably cheaper than where you live now. The biggest myth about traveling is that it’s expensive. I am starting a series about Travel Funding including how to save for a trip and ways to cut costs on top expenses. My tips are geared toward long-term travel but can also be used to extend your funds for any trip! In life, you either have time or money. In this series, I focus on money. You can find my post on finding the time to travel here.
Zicatela Beach, Mexico
HOW MUCH DO I SAVE?
For me, I try to live on $1,000 USD/month no matter where I am. That’s roughly $30/day. This is a fairly common budget for many backpackers I’ve met in Asia and Latin America. I like to have at least $10,000 before any trip, despite the length. I started with $15,000 (and no debt) for my current Central/South America trip.
Top Five Factors to Consider when Saving for Travel
1. Research Your Destination
Where are you going? Asia, aside from Japan and Singapore, is the cheapest part of the world. Central and South America, except Brazil, are fairly cheap compared to the U.S. Western Europe is one of the most expensive for Americans. And, Australia isn’t cheap either.
Guidebooks give you a rough idea of prices. Go to the library/bookstore and look through a few current guidebooks. Lonely Planet lists a daily cost breakdown at the beginning of each book for various budget ranges. Flip through to get an idea of the cost of transport, accommodation and food. This is the best starting point.
2. Be Aware of High/Low Seasons
Costs can triple during holidays and high seasons. Be aware that holidays at your destination might differ from your home country. Prices can spike but also some businesses close. Transport might be pricier and more difficult to find in low seasons. Keep in mind that low seasons can mean colder or rainier weather. Shoulder seasons are sometimes best. It’s easier to negotiate prices in low season for accommodation but easier to find ride shares for transport in high season. Do a little research.
3. Bucket List Activities
If you want to get PADI certified to scuba dive or climb Kilimanjaro, know the basic cost. This is most likely going to be your main expense so get an idea of costs to make it easier to save accordingly.
4. Talk to Other Travelers
Remember your co-worker’s cousin that teaches English in Thailand? Get his email and ask him about the cost of living. Look at online forums for travel advice. Couchsurfing.com is a great resource for meet-ups events and other ways to meet experienced travelers in your neighborhood. I went to Spanish meet-ups in Austin before I left for this trip and meet tons of cool people with great travel budget tips.
5. Cushion Fund
At some point, you might decide to go home. What is your plan? Do you have a job lined up? Are you going to crash with a friend or family? Where are you going to live?Don’t worry – you don’t need a plan, just a cushion fund to cover a couple months of living expenses when you return. For me, I feel safe with $5,000-$2,000. If you have a job lined up, then you can get by on less.What’s your target savings goal?