Yesterday I walked past a homeless man who genuinely had nicer shoes than me. (I refuse to buy new ones, since i’ll be leaving on my next trip in 2 months). This got me thinking about my upcoming trip and my strategy for trying to save as much money as possible before I leave. As a side note, it got me thinking about just how much homeless people and long term travelers have in common: no fixed address, haven’t shaved in months, limited wardrobes, neither have much of an income and there’s a good chance they’ll smell.
I thought I’d put a few tips together about saving for long term travel since unfortunately, it’s a necessary evil for those of us who weren’t lucky enough to be born in the Hamptons and it seems to be something many people struggle with.
There are thousands of ways travelers can make money while abroad, and almost as many books or posts on the subject, here are two really good ones. (25 ways to earn while you travel or check out this killer Lonely Planet Group. I also touched on the subject in my guide to leaving your job to travel the world. So instead I wanted to just think about some of the better methods for saving cash before a big trip. Many people find saving the hardest part of the planning process but it doesn’t have to be so hard, here’s how I do it.
1) Work out your target. This needs to be a realistic amount that’s achievable, there’s no point in getting bummed out about not hitting an impossible target. Have a single figure in mind you can strive for. Let’s say the target is $20,000 for a year long round the world trip and you have $12,000 saved already, obviously your target is $8,000.
2) Break it down. Take the figure from point 1 and break it down into weekly or monthly chunks based on how much time you have to save and also based on how often you have cash coming in. Take that $8,000 say you have 6 months to go and you get paid weekly you will need to save $333 a week. (8,000/6)/4 = $333 per week (or $1332 per month). This is now our target.
3) Set and track a weekly budget. Tracking your expenses is vital, you need to know where your money goes and in what volumes, to better plan on how to reduce these costs. I use my iphone and have tried every budgeting app under the sun, with mixed results. I generally now just use the notepad feature to just write down the price and what the purchase was.
4) Reduce your costs. Here are some of the better ways I could come up with in terms of saving money. I have used the majority of these to save cash in the past (pick and choose the best of these for your situation).
My long term travel cash saving tips #winning
- Take public transport: Put up with that weirdo on the train and it will save you money, especially if you’re charged for parking a car as well as for gas.
- Ride a bike or walk instead: Cars cost money and make you fat, bikes/walking save you money and make you fit.
- Sell your car: Avoid gas costs, parking costs and insurance/registration costs, you’ll also get a nice lump of money at once and avoid having to figure out storage solutions while you’re away.
- Eat out less: My biggest expense apart from rent. Cooking as much as possible at home solves this problem, or simply swap which meal you buy, breakfast is always cheaper than dinner and is actually my favorite meal of the day anyway. Win.
- Stop drinking alcohol (or reduce it): Yep, you’ll just have to deal with the pain of life without your favorite depressant (this one alone saves me hundreds each month).
- Buy budget food: Brands cost money to market and to build, instead, buy supermarket brands. Some of these products are actually superior to non supermarket brands and it will save some money.
- Don’t buy lunch at work: This adds up really fast, and suddenly you realise that you’re spending $70 a week on work lunches, instead pack your lunch from home.
- Eat breakfast: Stops you from snacking so much throughout the day, vending machines cost money.. also, a minute on the lips forever on the hips.. snack foods are generally bad for you.
- Cancel all unnecessary direct debits: Go through your credit card and bank statements and see where your money gets automatically debited each month, then cancel all unnecessary subscription expenses, things like TV, websites, magazines etc..
- Stay home:Boring by effective.
- Don’t buy expensive travel items: The classic pre-travel trap, don’t shell out $1,000 for a new wardrobe to travel in, you probably have everything you need already.
- Drive your car like an old person: Take off sloooowww and save some gas.
- Use the DIRNT method: Do I Really Need This? ask yourself that before every purchase you make, and no you don’t really need that new pair of shoes… you just want them.
- Grow your hair: Ladies you guys get ripped off big time by hair salons, just grow it and save the cash.
- Drink instant coffee or tea: Trade that grande latte enema you insert each morning for the gritty taste of instant coffee, it’s surprising how much this adds up (I used to spend well over $50 a month on lattes).
- Eat less meat: It’s more expensive than a veggie based diet.
- A day in India: Costs approx $26 without going all out or being stingy (according to the Lonely Planet India guide). That’s what I use to keep me on track, every time something costs money I compare it to spending a day in India, it puts things in perspective about my priorities on where my money goes).
- Move house: Moving back in with the parents or in-laws is always a winner, or even a friend who will have you, don’t outstay your welcome but remember that rent is likely to be your biggest expense each week, cut this out and you could likely ignore the rest of these.
- Get a tenant: Clear that spare room out and use Airbnb to host travellers at your place, a great way to make some extra money or help with mortgage payments and meet new people.
Take these tips as far as you want to, i wouldn’t suggest doing all of them as you may turn into a recluse, and end up looking like Gollum from Lord Of The Rings. Pick a few that you can stick to and focus on reducing your larger expenses (which you will be tracking right?!). Use the 80/20 rule and see if you can eliminate those 20% of expenses that make up the majority of your costs and if you needed more financial resources check out the resources list.
Got any more tips on budgeting before you travel? – let me know.