How to Save Money For Travel
Looking at Facebook, Instagram or even talking to your friends who travel can make you wonder, how do all these people manage to save enough money to travel so often? You do not need to be insanely rich to afford this type of lifestyle and you don’t need to have well-off parents who will pay for your journey. All you need to do is make some small adjustments to your everyday living and you will soon be able to save enough to start your own adventure! It is not always easy to make these adjustments, it will mean cutting back on luxury spending, staying in on a Saturday night instead of going out and cooking your own meals at home. I can promise you though, it will be worth it! Here are some of our best tips on how to save money for travel!
So where do you begin?
Learn Money Management
To start on your saving journey, you first need to become financially responsible! You need to look at your income and expenses in a realistic way and learn how you can increase incomes and/or decrease expenses. Stop spending outside of your means by using credit cards and loans and start spending no more than money you have already earned. There’s a great quote, “We buy things we don’t need, with money we don’t have, to impress people we don’t like.” It doesn’t matter if you have the newest smartphone or the best TV, the only place it gets you is into debt! Instead of buying these material items, save your money and spend it on something that will enrich your life instead!
Track Your Spending Habits
If you usually spend all your money on your bank card, then sit down one night and work out where your money is going. You will be surprised how the small things add up. If you usually withdraw cash and spend your money that way, try to keep a log of what you’re spending for a month.
It is important to do this, as often we will spend money without realizing where it is going. Every dollar spent ads up and this is the reason you will often get a shock when you check your account.
Looking at your spending habits like this will give you a better understanding of how you are spending money and then show you how much you can save by cutting back in certain areas.
Needs Vs Wants
From the above list, you should be able to put all of your expenses into one of two columns. The first column is ‘Need’ and the second is ‘Want.’ It is important to distinguish the difference between things you need and the things you want in order to cut back your spending. In the ‘need’ column you will put things such as rent, power, insurance, loan payments etc. In the ‘want’ column you will put spending that was nothing more than a luxury. Coffees, going out for dinners, cigarettes, alcohol, movie tickets, Netflix etc.
Be honest with yourself, and make sure you keep the ‘wants’ and ‘needs’ separate. “Needing” to buy a coffee at Starbucks every day is not realistic, you can get by without it.
Write down how much each thing costs per month and see how much you are spending.
Cut Back Your Spending
Now you have worked out how you are spending your money you can work out where you can cut back. Take out the ‘Wants,’ or at least cut back substantially. Limit yourself to one coffee from Starbucks per week instead of 5. Cancel your Netflix subscription. Take up running and cancel your gym membership. There are so many ways you can reduce unnecessary spending.
Also find where you can cut back on the ‘Need’ spending. Reduce your power bill by wearing an extra sweater. Start shopping at a cheaper supermarket. Start biking or using public transport to get places and save on gas, possibly auto insurance if you sell your car.
There are so many ways to reduce spending. It helps if you keep your end goal in mind and then it all seems worth it!
Create Habits to Save Money
By creating new habits, you will find it so much easier to save money. There are some simple things you can do that will make a huge difference! Such as:
- Cook dinner at home instead of eating out (save up to $15 per meal)
- Make your lunches at home instead of buying them at work
- Make your own coffee each morning and bring it to work (save $5 a day)
- Quit the gym (save $20 a week)
- If possible, move into parents and save rent, or move to cheaper neighborhood
- Invite friends over for movie night instead of going to the cinema
- Write a list when you go grocery shopping and stick to it!
Make a Budget
Well, you actually need to create two budgets. Decide where you want to go and for how long and then create a budget for your trip. Create a budget for your everyday living at home as well. Keep track of income and expenses and make sure you stick to your budget as closely as possible.
Excel has some great templates and is easy to use if you are unsure on how to create a budget.
If you want to travel to South East Asia for 3 months, work out how much you will need. Flights, insurance, accommodation, food, activities, transport etc. The amount will vary for each person, depending on personal preferences, time of the year etc. Let’s say you budget $1500 per month, plus $1000 budget for flights. For three months of travel, you will need $5500. It’s always nice to have a ‘cushion’ so let’s increase your targeted saving to $6000.
If you plan to leave in 6 months, you will need to aim to save $1000 per month. It sounds like a daunting task but it is totally achievable through conscious spending and budgeting.
Make More Money
The above ideas will help you to reduce the amount you spend each month and therefore will increase your savings substantially. You are so much closer to getting on your way than ever before. Still, it helps to find new ways of making income or some easy cash as well!
Sell Your Things!
Everybody accumulates a bunch of stuff over the years that they end up never using. Have a look around your room, your garage and wherever else to find what you can sell! It may be old clothes, it could be old music equipment or sports gear. Anything! Put them online and sell them off! Declutter your life and make some extra money at the same time.
If you don’t have anything you really want to sell, try creating something to sell on Etsy or eBay! It could be homemade lip balm, necklaces, moisturizer etc. This will create another income stream for you in order to get you on your way! Hunt around garage sales for good deals and then sell for a profit on Amazon or eBay.
Find Part Time Work
This is obvious, and you may think you have no time, but if you really want to travel you will find the time and energy to do whatever possible to make your dream a reality. Maybe you have a knack for photography and can offer some shoots for families or animals. You might be able to work a few nights a week in a bar or restaurant. There could be an opportunity to babysit around your area, advertise your service in the local paper. If you have a talent with computers you could offer local businesses to create websites or offer your services on Craigslist, Fiverr or UpWork. You may be able to do some pet sitting or house sitting. Every little bit helps!
Organize Your Bank Accounts
I have always had 3 bank accounts. The first, this is for my everyday spending. My pay from work comes in here and this is the account I use to do all transactions. The second account is what I call an emergency fund. It is like a savings account, I put money into it each week and if there is a large expense come up unexpectedly, like a car issue, then I use the money in this account. The third account is like a “super saver.” It is an account that I never allow myself to touch, I pretend as if it is not there.
By doing this I am able to separate out my money and ensure that I do not leave myself stuck in any situation while also making sure my travel fund is always increasing.
Find a bank that will offer a low fee/no fee transaction account. One where money can come in and out often, without penalizing you. There will likely not be any interest on this account, it is not a big deal however as the amount of money in here will only be what you need to spend.
Every Day Savings Account
You will need to find an account that has a fair interest rate and low fees. One that you can easily withdraw from without getting a penalty. I set up an automatic payment each week from my transaction account of $50. This means over the year I will have $2600 saved. Hopefully, if it has not needed to be used too much, it will continue to build up over the years.
Travel Account/Super Saver
This is the third account I have. It has an automatic payment each week from my transaction account also. It has a higher interest rate and the rate stays better if there is a minimum amount added each month. To withdraw money from this account, it costs me $20 which is an incentive to keep it in there! I pretend as if this account does not exist and therefore will not find myself relying on the money in it for everyday expenses.
Use a Cash Allowance
If you find yourself spending too easily and carelessly by using your bank card, sometimes it is best to use a ‘cash budget.’ Withdraw the amount of money you will allow yourself to spend for the week and once it is gone, do not spend anymore. This can make you more conscious of your spending as you are having to hand over actual money.
You came here to learn about how to save for travel and I hope you have gotten some inspiration to start working on your savings! It does seem daunting to begin with but once you start to see your hard work pay off then it will all be worth it! Before you know it you will be relaxing on a beach in Thailand, exploring museums in Europe or partying on a boat in Croatia and your life will never be the same!