Saving for traveling

Unless you’ve won the lottery, inherited money, or have saved a large chunk of cash somehow, your number one excuse for not traveling is probably money. For some, not having enough money is an income problem. For others, it’s an EXPENSE problem! Drinking Starbucks everyday and drinking at the bars two nights a week adds up quick. To save enough to travel, you may have to give up some luxuries that you are used to in your daily life! For me, I was happy to give up some of my wasteful spending so that I could spend more than a year on the road. How about you?

If income is the issue, the solutions unfortunately aren’t easy. You’ll need to get a better job, a second or third job, beg, grovel, or maybe politely ask others to donate to your cause on sites like fundmytravel.com, or by signing up with Paypal and sending everyone the email you used at signup.

On the opposite of the saving coin are the people with expense problems! How much money do you waste on your lifestyle? If you don’t know, take five minutes and list all your living expenses. Rent or mortgage, car payment, cable bill, cell phone, insurance, etc. Then write down what you spend on discretionary things like food, movies, alcohol, shopping, coffee, cigarettes, drugs, sports tickets, and other similar things. If you have no idea what you spend money on, as I didn’t, track your expenses for week or two and come back to this list. Once you add everything up, most of you will realize how much money you and the rest of us waste without realizing it. The money I spent on rent alone ($750/month) was more than I’ve spent on traveling for a month in most countries! Although cutting expenses on rent and other living expenses may be difficult, there are a ton of savings to be found on the discretionary side. Let’s start cutting!

Food – Learn to cook! Eating at restaurants is easy and convenient, but it’s expensive! Look at your list from above and count how much you spent eating out. Now consider how much you would have spent if you made meals at home, bagged your lunch, and ate leftovers. The savings are huge! Sure time may be an issue for some of you, but there are thousands of cooking sites that will teach you how to cook fast and healthy meals.

Your car – After gas, insurance, repairs, depreciation, and tickets, your car is probably costing you ALOT of money. If you live in a city with mass transit, take the bus or subway/train and walk. It’s healthier for you, the environment, and your WALLET! If you don’t have a good mass transit in your town, consider downgrading to a smaller and cheaper car. Most likely you will be able to save a significant amount in gas and insurance as well when you downgrade.

Rent/Mortgage – Like most people, your rent or mortgage is your largest fixed expense. To save money quickly, downgrade your apartment, bring in a roommate, or even go back to living with the parents. Even saving just $200/month will be $1200 in 6 months! That pays for a month of all of your food, drinks, lodging, transport, and activities in most countries. If you have to, get a folding screen and turn your living room into a spare room. It might not be ideal, but you will save a ton of money and it might even help get you used to living in hostels on the road.

Coffee/Alcohol/Smoking – I love the taste of coffee and beer, an obviously the effects, but the costs add up quick! A daily coffee can easily cost you $150 per month. If you cut out just one daily coffee shop trip, in 6 months you’ll have saved $900 and enough to travel a month in Latin America or Southeast Asia. How much do you think drinking and smoking costs you? I remember spending $100/night sometimes. If you have to, pre-drink before going out, but stop spending money at the bars and watch your savings account grow instead!

Cable/Movies – If you have fast internet, ditch the cable and stop paying to go to the movies! With legal sites like Hulu and the individual broadcaster’s websites, you can watch most TV shows online for free. If you don’t mind the legally suspect sites, you can download all the major movies and shows with torrent software and stream most live sporting events. After 6 months, saving $50/month here will pay for your PADI Open Water Dive course or a full month of hostel lodging in most countries. If you go to the movies twice per month, that’s probably another $40 per person per month.

Coupons, loyalty cards and sites like Groupon – If you can save money on things you are already going to buy, why not do it? I used to save over $150/month by using loyalty cards, clipping coupons, and using Groupon type sites for things I planned to buy anyway.

Sell your stuff – Before I went overseas, I sold almost everything I owned. I kept the sentimental things, but to earn extra money I sold everything else. TVs, couch, bed, turntables, stereo equipment, even some clothes! Instead of spending money on storage, I could spend that money on traveling. Sell your stuff on sites like Craigslist, and if you ever come back you can buy replacement stuff. After all it is just stuff, it’s replaceable, and you might even feel a sense of relief when it’s all gone. I know I did!

Cell phone – With most plans, your Smart phone probably costs you close to $100/month. While smart phones are fun and useful, getting a cheaper phone will cost you less than half that per month. If you are in the US in a Cricket market, you can still use a Smart phone and still cut your expenses in half. Check them out: http://www.mycricket.com/cell-phone-plans#smartphone-plans

Credit cards – The right credit card can earn you cash back, rooms, flights, and products. Since you will need a card to book most flights, and often to pre-book hostels while on the road, why not start earning rewards? From my research, Capital One is the best card for travelers. None of the Capital One cards charge foreign transaction fees or exchange penalties. One of their new cards offers 0% interest on your charges and balance transfers for over a year, and you even get 1.5% cash back on your purchases.

Online savings account – Speaking of interest bearing accounts, why not have your saved money grow a little faster while waiting for your trip? Although the Capital One account has competitive rates for the first year, there are other high yield online savings accounts that will pay you more. Check out Bank Rate for the latest rates if you are in the US. Interest rates are low now, but earning an 1 or 2% could add up to a couple hundred dollars at the end of the year. If you are in the UK, Australia, or New Zealand, your savings rates of 4-6% are much higher than US rates now so you should definitely be searching for the best!

Couchsurfing – Although this won’t save you money now, it could save you much in the future. Couchsurfing is a site for social travelers looking to stay in a local home. It’s great for meeting people and groups around the world, finding local meetups, and organizing free accommodation. You’ll probably need to use it to meet a few locals before someone offers you a place to stay, but once you have vouched reviews it will be easier. Some users will go straight to a Couchsurfers house when arriving to a new town, but I always book a hostel first. This means I can meet the locals, hang out, get a vibe on our dynamic, and see their place before either of us commit. Whatever suits your fancy, sign up for CS, find the local meet ups, and meet some locals. You’ll make friends, get a local view of the town, see hidden places you normally wouldn’t have, and even save some money.

By cutting your expenses, earning a bit more money in your savings account, and planning ahead with the right credit cards and socializing, you will be on the right track to making your dreams a reality!

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