Hi Frugalistas! I know I’ve written about ways to save money to travel before. But I’ve been thinking it was time for another lesson. What’s got me into action today was an interview on breakfast television this morning. It was with a family (with four children) who had spent $5000 for a 6 week trip to Asia. While they used many of the hacking and budgeting tips I frequently write about, they also saved the money to do it. Whether it’s $500 or $5000 I believe anyone can save money to travel. If you are planning on traveling how many ways to save money to travel are you using now?
- 1 1. Decide travel is a priority
- 2 2. Set up a bank account
- 3 3. Get real about your spending habits
- 4 4. Pay yourself first
- 5 5. Save money on every day items
- 6 6. Never pay full price
- 7 7. Understand your financial weaknesses
- 8 8. Don’t go into debt
- 9 9. Research your trip
- 10 10. Find your own ways to save money to travel
1. Decide travel is a priority
Many people say they’d love to travel. They are envious of people who do. But what do they do about it? Any ambition you have without a plan is just a dream. If you want to travel, you need to decide saving to travel is going to be a priority.
Then you need to start your plan…….
2. Set up a bank account
Setting up a dedicated bank account that you put your travel funds into will help stop you from dipping into your savings. See if your bank offers an account that pays a bonus interest rate if you make a deposit but no withdrawals. Even if the interest rate is very low, every little bit helps. Are there accounts you can open that are investment saving accounts where your money is not available immediately if you want to withdraw it?
Set up your account to make it hard for you to withdraw funds from it. Don’t carry the card for the automatic teller in your purse. Then you can’t be tempted.
3. Get real about your spending habits
How much to you take home in your pay every month? That much, eh? Do you know where it all goes? I’m sure you don’t. So, it’s time to get real. Keep an expenditure diary for every month. Keep every receipt for every purchase, regardless of how small. Go through your credit card bills. Work out what you spent your money on.
At the end of the month, how much money do you have left? Looking at your diary and your receipts and bills, does your expenditure reconcile with what you earned and what you spent? If it doesn’t, it’s time to get honest with yourself.
If you can’t account for where your money went, how can you possibly channel it in the direction you want it go?
Don’t panic if you are struggling with this. Don’t beat yourself up and give up. Keep going with your diary. Keep checking all those receipts and credit card bills. Learn to get better at it, week by week if need be. If you can’t account for $200 the first month, set yourself a goal to reduce that discrepancy the next. If you keep your diary, and scrutinise your receipts and bills you will slowly become more conscious of what you are spending your money on. That will help you save.
4. Pay yourself first
If you read any book on building wealth, this is something they all recommend. Regardless of how much money you think you can spare, make a commitment to make a regular payment into your travel fund. The trick is to make it automatic. Then you can’t choose not to do it, or “forget”. Making it automatic is easy. Sometimes your employer will make the deduction and pay into the account of your choice. Then you never even see it in your pay. Alternatively, set up an automatic payment with your bank.
How much should you set aside? If you’ve been keeping your diary and know just how much you really need to live on, then there’s a clue. But even if you haven’t done that yet, just make the decision to set a small amount aside. Make that decision NOW. Whether it’s $5, $50 or $500 a month doesn’t matter. Just do it. Make it automatic and you will never miss it.
$10 a week placed into a dedicated bank account every week will save you $500 in a year. If it’s automatic you will never miss it.
5. Save money on every day items
I’ve written previously about how easy it is to save money by not buying take away coffee or buying lunches. I save about $25 a week by using the coffee machine we have at work with my own pods, and by bringing, rather than buying my lunch. I live in Australia where living is expensive, so of course, you may not be able to save that much. But what if you could save $10 a week? And what if you put that money into your saving fund? There’s another $500 in the bank.
The supermarket is another savings goldmine. North Americans can, of course, go coupon mad with Chameleon John. But remember to put all those savings in the bank. Even if you can’t coupon, there’s plenty of other opportunities to save. Buy inhouse brands for staple items like flour or sugar. You won’t notice the difference. Buy extra non-perishables when they are on sale, and try to avoid buying them when they aren’t.
Our supermarket itemises the savings we’ve made at the bottom of our check out receipt. We average $15 a week in savings just by buying things when they are on sale, or by using our store card loyalty program.
Be a conscious shopper and only buy what you need. Make a list and stick to it. Don’t shop when you are hungry. Keep a running track of your savings as you move around the supermarket. Even if it’s only $5 a week, put it in the bank (another $250 a year by the way).
Does the price of petrol (gas) vary depending on when you fill up where you live? It does here. I buy my petrol when it is on the cheapest part of the price cycle, which saves me about 20cents a litre (approximately 80cents a gallon). Even if I only put 40litres in the tank, that’s $8 saving. And I go through a tank a week.
Have you been keeping count of how much money you would have in your fund if you had followed just the first five steps? I’ve counted $1250 (not including the petrol or any savings identified in your expenditure diary).
6. Never pay full price
There are almost endless possibilities for saving money if you make a decision to never pay full price. Wait till those cute shoes come on sale before you buy them. If they aren’t on sale (and you need shoes) choose a pair that are. There is far more than one pair of cute shoes in the world.
Work out Christmas and present shopping lists for the year and buy them when they are on sale. Friends and family will never know the difference, and you get to pocket the savings.
7. Understand your financial weaknesses
Whether it’s cocktails with the girls, adorable dresses or a take away coffee, everyone has their financial weaknesses. For me, it’s clothes. So when I’m saving to travel I don’t go shopping. I don’t open the emails from the online stores. I keep my wallet in my bag. I save money.
Once you’ve worked out what your weakness is, do whatever you need to do to avoid giving into temptation. Leave your bank card or credit card at home. Use cash only. Only go for cocktails every second time. Avoid the mall. Yes, it takes discipline. But if you’ve truly made the decision to make that trip a reality, think about that. Think about every cocktail – what could you buy on your trip with that money?
8. Don’t go into debt
Yes, this is one for the credit card fiends. It’s so easy to save lots of money. You just put it on a credit card, and only pay the minimum amount, don’t you?
In most Western countries credit card interest rates are about 20% per annum. Just a $1000 balance on a credit card attracts an interest payment of $200 per year. If you didn’t donate that money to your credit card company, what could you spend it on instead? I have a few ideas…….
A night in a decent Paris hotel;
A week in a hostel in South East Asia;
A short haul flight to almost anywhere;
A fancy dinner in a great restaurant (including tips!)
A special excursion or day trip to a place you will remember forever.
What makes more sense to you?
9. Research your trip
Staying motivated is important. If you keep getting those travel agent brochures, bookmarking those websites or researching those hotels you can stay on track.
Pick your hotel and airline. Subscribe to websites to keep you up to date with discounts.
Find some photos of your destination and make an inspiration board.
Do whatever you need to do to stay motivated.
10. Find your own ways to save money to travel
You’d be surprised how and where you can find ways to save to travel. I found a website that sells supermarket items VERY cheaply (and if you spend $100 they deliver free!). They don’t sell everything, but I did find the toothpaste we use and the dishwasher powder we prefer. Both were about 75% (yes, that’s not a typo) cheaper than the supermarket. I bought a year’s worth of dishwasher tables and a year’s worth of toothpaste for our family and saved.
Then I saw an advertisement on the TV for a website that sells pet supplies. With two indoor cats we go through quite a bit of both cat food and litter. Both are about a third off the supermarket prices, for exactly the same products. Again, we spend $100 and get the free delivery. Our cats get enough of their favorite food and litter to literally last months. We save big.
Keep your eyes and ears open. I’m sure you can find shops or websites where you can save even more than me. Put that money in your travel fund, and watch your travel dreams come true……
Nothing I’ve suggested here is really difficult. Anyone with an income can do it. Whether it’s $200 for a local weekend away or $20000 for an around the world adventure, do exactly the same. There are so many ways to save money to travel. The hard part is getting started.
If you’ve saved the money to travel, what are your top strategies for success?