It's no surprise that most people want to travel more, but how do you save money for travel and still live a full life at home?
The other day I read something online that most millennials are willing to give up Tim Hortons, Netflix, shopping & hockey to travel. Thanks to OutWithRyan for providing that little tidbit of information.
So what would you give up to save up to travel the world?
How to Save Money for Travel
How It All Began
Before Dave and I became full-time travel bloggers, we had full-time jobs, mortgage payments and bills to face each month.
I don't know if you know this, but we traveled extensively for nearly a decade before we decided to become bloggers.
Before putting a word on the Internet, we already traveled to 40 countries while juggling our careers and life in Canada.
Many of our friends and family members thought we were flaky and throwing away our retirement on travel. But that was not the case.
As a matter of fact, we put away for our retirement early in our careers. Plus in all our years of travel and starting a travel blog, we never once dipped into our savings.
Instead, we saved above and beyond our retirement savings and bill payments by putting money towards travel whenever we could.
We tried many different ways to save money. Some worked and some didn't.
These are the tips we found helped us to save the most money towards our next trip.
Don't Travel on Borrowed Money
Our number one rule for traveling is to never travel on borrowed money.
I know that's not necessarily a Millenial way of thinking, but take it from us.
Coming home to a mound of debt after a life-changing travel experience is not what you want to face. Debt is stressful and if you can avoid it, you'll live a happier life.
We never left home until we were sure that our monthly bills, investment contribution, and expenses could be covered for the months we were away.
Create a Travel Budget
How Much Should I be Saving for Travel?
We have found that the best way to save money is to create a budget. If you ask these questions, it will help you identify how much money you'll need to travel.
- What will your daily travel budget be?
- How much are you going to spend on a hotel nightly?
- What is your excursion budget?
- What do you plan on spending on meals?
- How Long are you Traveling For?
- Are you going to be a budget traveler or mid-range?
For example, hostels are definitely a way to keep costs down and you could easily go lower than that if you are traveling through places like South East Asia or Central America.
If you are traveling through South East Asia, you may easily be able to budget $50 - $100 a day.
That means you will need $10k - $20k for a six-month trip.
Check out the book How to Travel the World on $50 a Day for more ideas.
Not including flights - We talk below about using rewards credit cards to help you save money on flights.
So in conclusion, if you want to travel within one year and you need $15k for a six-month trip, you will need to put away $1250 per month if you start from zero.
But don't worry, you won't have to start from zero, we're going to show you ways to find money.
Some people travel for much less: See How PE World Tour traveled on $2400
Set up an Automatic Travel Fund Saving Account
Now that you know how much money you need to travel, we suggest setting up an automatic withdrawal to go into a travel savings fund.
The same way that you have automatic withdrawals for your bills, your investments, and your rent.
Then set up that fund and have it come out of your bank account every single month.
To save money for travel, it is really important to know what you are spending your money on.
I can't stress this enough, pay attention to where your money is going when budgeting for travel.
Sit down and start making a list of where you spend every single penny each month. Be diligent and don't let anything slide by.
Perhaps you stop every day at the corner store near the subway and grab a snack or a coffee that you could have taken from home or got at work.
If you spend $5-$10 a day on little things, that's $150-$300 a month that could have gone to travel. See how quickly money can add up?
Do you have a Netflix, Amazon Prime, and Hulu account? Maybe you only need one.
I have cut Dave's hair for years saving us a ton of cash. (See picture above)
And I grew my hair out needing nothing more than a monthly trim which I did myself (and had Dave help in the back)
That's a good $100-$200 savings on hair cuts a month! (thanks to Minority Nomad for reminding us about this point!)
Are you still paying for cable? Get rid of it!
Is your cell phone bill the highest one you can get. Maybe you can drop it down to a smaller plan.
Do you have a gym membership that you never use? Cancel it.
It's all these little things that can add up to big savings.
Pay off Your Credit Cards
We have always been really good with credit cards.
Holding a balance on a card stresses me out, so I pay it off every month before the due date.
Don't throw money away by paying interest on credit cards.
If you can't afford it, don't buy it.
But that doesn't mean we don't use our credit cards. We actually put everything on credit card.
It is the easiest way to track expenses. You can check your statement each month and see where your money is going.
And it is the easiest way to save money for travel.
Get a Rewards Credit Card
One of the most expensive up-front costs for long term travel is your flights.
This is where a travel rewards credit card will come in handy. But as I said above, only if you pay it off each month and are diligent about not spending more than you need.
You'd be amazed how quickly you can earn points when you buy things like groceries, toiletries, and even medication on your credit card.
Rewards add up fast.
With a travel rewards card, you also get a sign-up bonus. Just by signing up, you could get a lot of money towards a flight.
We use American Express most of the time, but our TD Travel Visa doesn't have a fee and it has great travel benefits too.
Do some research to see what card is best for you. What card offers the flight rewards you want.
The Points Guy is a great resource to help you choose the right card.
Our Amex offers travel rewards. We make purchases all year on it and we get rewards with each one.
We usually have anywhere from $800 - $1000 towards travel by the end of each year. We purchase a ticket and then give Amex a call and ask them to pay it off with our rewards. (if we have enough - which we usually do because we put all expenses on it)
Chase Sapphire is popular in the United States and we hear it is even better than Amex.
Change Your Living Situation
If you have a house, but you have a dream to travel, you may want to sell it.
That's what we did. We knew we weren't happy as homeowners, so we put it up for sale.
I remember the time that we owned that house was the most stressful time of our lives. We were always worried about money and what we would do if the next movie contract didn't come in.
We felt trapped and wondered if this was going to be where we were stuck for the rest of our lives.
If you don't want to sell your house, you may just want to start looking for a subletter to rent your place for a year or so.
I know people that have sublet their house while building equity and travel full time. They rent in other places instead of moving back home and are perfectly happy.
If you are currently renting, you may want to move to a smaller place in a cheaper neighborhood.
Think of any way to cut costs. This is a relatively easy way to save money if you have larger assets like this.
Sell Your Things
We had a garage sale to get rid of all the stuff we had bought over the past few years.
We made a couple of thousand bucks on our garage sale if you can believe it.
We sold everything from lawn mowers, to our Doctor Ho massager and even a knife (that we didn't' realize was worth so much) but a guy offered us $50 for it!
People were giving us 20 bucks for glassware sets and knick-knacks. We had so much clutter. And it felt amazing once it was all gone.
Even if you don't want to sell your house, having a garage sale will make you some extra cash while lifting the weight of all that extra clutter.
We did so well on the garage sale, we started looking for more things to sell.
We sold diving gear, we sold a guitar, we sold Dave's drums. We just kept on finding things to sell!
It all added up to a pretty penny that went into our travel fund and cut our monthly deposits to our travel fund in half.
Think about what you have that you don't need, but someone else would love to have!
Lifestyle Change and Mindset
When you need money to travel, one of the most obvious places to look at is your lifestyle. By changing a few habits you can put away more cash towards your next trip.
We owned two cars that we were paying monthly payments on. When we went down to one car, we sold the newer one and paid off the other.
Now we didn't have car payments and because the car we were driving was older, we canceled the collision insurance on it.
It wasn't worth much, so we only made sure to have liability insurance if we got in an accident.
That cut our insurance fee by hundreds. Now with no car payments and less insurance, we were spending a lot less on car expenses.
Plus, by living in the city, we paid less gas and could ride our bikes or walk to wherever we wanted.
This was a tough one for us. We loved eating out, it was our time to chat and catch up.
But once we started eating at home more, we saved a lot more money.
If I could tell my 23-year-old self to learn to cook at home, I would have saved myself a lot of money headaches.
We made cooking an event and bought only fresh ingredients in bulk.
When we did have wine or beer, we went for the cheap stuff.
Yes, we bought boxed wine and Labatt's beer.
Luckily, we were so busy with life, we didn't much at all while saving for our travels.
We had a goal in mind and when thinking about putting $40 towards alcohol or our travel fund, the fund usually won out.
And we invested in a good coffee maker so we didn't have to go to Starbucks whenever we needed our caffeine fix.
I always called Starbucks "Four-bucks." Four bucks a pop, for a coffee, that adds up fast!
We used to meet friends at the bar or nightclub and spend a fortune on drinks and food.
As our lifestyle changed, we started to go over to friends houses and have them over to ours.
We still had a social life, but we weren't throwing money away downtown and we were saving money towards our goal.
When we had our house, our hobbies were pretty expensive. We had a ski pass at Blue Mountain and often stayed over at the hotel after eating out at the restaurant.
We also did a lot of scuba diving trips in the summer around the Great Lakes and St. Lawrence River staying in lodges each weekend.
Find Free Things to Do
When we moved downtown, we got more into rock climbing.
Our one splurge was our rock climbing gym membership, and we basically became gym rats. We loved climbing and were there nearly every night during the week!
But having that gym membership (that we used and loved) we saved money from eating out every night and going to clubs on the weekend. We loved being at the climbing gym and that took up a lot of our time.
Instead of spending a ton of money each weekend, we went camping near the crag and then went rock climbing for free.
We ended up doing a lot of fun free things like mountain biking, meeting up with the cycling club for evening rides.
We took up hiking and spent our weekends exploring Niagara Glen or the Bruce Trail.
We were busy and adventurous and didn't spend a much on anything except for snacks and maybe a park entry fee.
I know it seems like a lot, but it can be done.
If you take things one step at a time and follow our tips for saving money, you can achieve your goal of traveling the world.
Make a list, take stock of your expenses, debt, and income and figure out what you need to do to follow your dream.
For us, it was overwhelming to do all of these things before we left, but once we were on the road, we were free to enjoy our travels because we didn't have any worries at home.
And we have never missed all that stuff we gave up. Since we started a life of travel, we've enjoyed the freedom of not having clutter in our lives and debt in our bank accounts.
Dave and I found that whenever we took a chance and made room for our dreams, great things happened. If you are not happy where you are, start thinking differently and make that change.
The best journeys start with the first step.
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