Although this site is dedicated to it, time is not the only barrier keeping many travel lovers from making their next big trip a reality. When I took my reader survey last fall, you listed money as the biggest reason for not traveling more, and this is no surprise. You’re looking for ways to save money for travel, as well as for tips on how to travel for cheap. Me too! As travel increases in popularity, it’s only going to get even more expensive. And that means we have to be even more strategic and disciplined when saving for our next adventure.
Whether you’re saving up to take a 3-week dream trip or you’re planning to travel around the world for a year, here are 7 strategies to help you save enough money to make your travel dreams a reality.
1.) Surround yourself with your goals.
A great strategy to ensure your goal becomes a reality is to simply write it down and post it somewhere that you will see it on a regular basis. In high school, a friend of mine on the Debate team set the audacious goal to win the State tournament that year. She stuck a post-it note on the wall next to her bed that said: “Win State.” And you know what? She did.
Do you want to take a family trip to South Africa? Do you want to travel through Southeast Asia on your honeymoon? Is it your dream to take a year-long round-the-world adventure? Write it down. Post it on your wall. But don’t just write down what you want to do; write down what you need to do in order to achieve your objective. I recommend making a list of these steps (i.e. how much money you need to save in total, how much you need to save monthly, when you need to purchase tickets, etc.) and posting them in the center of a bulletin board. Then, surround your list with photos that remind you why you’re working so hard to meet this objective. Are you traveling to Southeast Asia? Post photos of monks in their bright saffron robes strolling the mystical grounds of Angkor Wat. Are you planning your honeymoon? Post photos of you and your partner having fun together as a reminder of all the great memories you will create on your adventure. But remember: Don’t just surround yourself with all the reasons why you want to travel; write down the steps it will take to get there. Both are important to keep in mind.
2.) Open a travel bank account.
One of the biggest problems with saving for travel is the temptation to dip into your travel funds. Although there may be legitimate financial emergencies that arise requiring you to do this, the majority of our temptations to spend our savings are unnecessary. It is for this reason that many people find it useful to open a completely separate account to house their travel savings. You’ll want to spend some time investigating bank accounts to determine which type is most appropriate for your particular savings goal. You may even want to switch to a different bank from the one where you maintain your checking account, so that it’s even less convenient for you to access your money and dip into your account unnecessarily. My husband and I do this with our personal savings account and have found it quite useful.
3.) Start investing.
If you’re serious about maintaining a lifestyle of travel for the long term, of being able to travel internationally every year, then you may want to consider ways to start making your money work for you and go beyond just saving. I use Scottrade as my online brokerage account to do most of my investing, and I highly recommend them as a great place to start. While you will need $2,500 to open an account, each trade you make only costs $7, and I have never had anything other than positive experiences with their software (I trade with Scottrade Elite) and their customer service. Investing even just $10,000 and earning a 10% return on your investment for the year could earn you an additional $1,000 — enough to cover your flight from the U.S. to Europe! Depending on how much money you have to invest, you could feasibly fund your entire annual trip with just your returns on investment.
4.) Cut back on the unnecessary purchases.
It’s shocking how easy it is to blow through a paycheck on items or experiences that are totally unnecessary. Start by recording all your expenses for three months. Where are you spending your money? What is unnecessary? Could you work out at home instead of belonging to an expensive gym? This could save you up to $500 a year or more. Do you really need to buy a coffee from Starbucks every morning or could you brew a pot at home or work? Dropping the $3.50 latte purchase five days a week could save you $17.50 a week, $70 a month, and $840 a year! Cutting these expenses together could save half the funds you need for your three week trip!
Cutting back doesn’t have to mean cutting out. I am certainly not advocating not working out or drinking coffee. But think creatively about ways to maintain the lifestyle elements that are important to you in more cost-effective ways. Instead of going to the bar, have friends over for drinks and ask everyone to bring some beer or money to contribute. This will help you avoid dropping $50 at the bar every weekend. Be honest with yourself about where you spend your money and how many of those expenses are necessary. If travel is important to your quality of life, then figure out creative ways to have fun, stay healthy, and save money.
5.) Pay yourself first.
Just as you pay your other bills at the beginning of the month, so also should you pay your travel fund first. Don’t wait until you’ve spent half your paycheck on entertainment or gasoline to drive you to unnecessary locations. Take out for all your bills and savings first and live on what’s left over. If you don’t have enough left over to go to the movies with your friends that weekend, then you invite them to your house to watch a DVD instead. You don’t transfer money from your savings to your checking (or worse, rack up charges on a credit card!) in order to go to the movies. When I was still single, I adopted this practice of taking out for bills and savings on the very day I got paid (during my lunch hour, in fact) and as a result, I was able to save over $20,000 on my own in less than 18 months — and I was only earning an average salary!
6.) Go beyond what’s comfortable.
If it’s your goal to save $100/month for your trip, with the goal of saving $1,200 within a year, then push yourself to go beyond what you think you can afford by adding an extra $20. If you keep up this practice, that’s an extra $240 a year. $30/month adds up to $360. And if you’re really disciplined, an extra $50 a month would give you $600 extra dollars by the end of the year. At that rate, you could end up taking your trip a year early! Or if you’re saving for a round the world trip, you could add a few more months to your trip. My experience is that you can always save more than you think you can and if you don’t save it, you won’t even remember where you spent it. So how worth it was it anyway?
7.) Don’t replace your savings account with your travel fund.
People always ask how do we do it, how do we afford to travel? And while we’ve been blessed with jobs that allow us to afford this type of lifestyle, that doesn’t mean we can travel endlessly or irresponsibly. We set our savings and investment goals at the beginning of the year and from that, we decide our travel budget. We feel we can justify spending money on travel if we’re not compromising our savings and retirement to do so. Remember that there is more to life than travel. You may be planning to go away for a year, but one day you will have to return to that daily grind of a 9-to-5 with the financial pressures of the world once again weighing on your shoulders. You don’t want to be 65 and broke only to look back and say, hey, at least I took that trip when I was 24. There are ways to plan for both without compromising.
8.) Leave a little left over at the end.
This is good financial practice in general, but for travel savings it can have additional benefits. If you’re on a round-the-world trip, come home on your terms, not because you ran out of money. Plan your expenses so that you can visit every place you want and then stick to your budget. If you’re saving for a three-week dream trip, then budget and save so that you will end your trip with a chunk of money in the bank at the end. Coming home from a life-changing trip can be rather disheartening when you return to “real life,” so having an extra $500 sitting in your travel fund will give you the extra motivation to start saving for your next big trip. Instead of staring at a blank account balance, you’ll know you’re already well on your way to making that next trip a reality.
Money is a challenge to traveling, not an excuse not to. We may all earn different salaries and save at different rates, but if we’re honest with ourselves about how we spend — and save — our money, then almost anyone can devise a realistic plan to travel.