Right off the bat, you need to figure out how much you actually need to save. How much will it cost you to go around the world to see the places you wish to see? Keep in mind that wherever the destination may be, figure out what your budget is and always have a plan!
Assessment – Compare your trip plan to the reality of your financial situation. Is it realistic, or are you dreaming too big? Make hard decisions. Be honest. Once you’ve got a general idea of your trip’s overall cost, compile a spreadsheet that lists your income vs. your expenses to see how everything stacks up.
Setting Goals – Your savings plan should include several goals, some short-term and some long-term. List your goals in specific numbers and don’t be shy to shoot high. But, not so high it kills your enthusiasm for your big trip (people have traveled the world with nothing).
Creating A Plan – This savings plan details how you’ll accomplish your goals. This could be done by removing unnecessary expenses (see below!), setting a strict spending budget, or adding additional income to meet your goals.
Execution – Put your plan in motion and stick to it.
Monitoring and reassessment – As time passes, your plan will change as your spending habits change. Take a look at your growth every month and check on the budget for possible adjustments.
Commit to your dream
The first of my tips for saving money (for travel) is to remember why you are doing this and to remind yourself every day. Put a picture on your wall, or a map with pins and strings to mark your dream around-the-world-trip route, for constant reassurance. Saving money is a grind, but anyone can do it if they set their mind to it.
Determine where your money is going
Write down in a notebook or make a spreadsheet and list out every one of your daily/monthly expenses. Organize them into two columns: “Needs” and “Wants“. Slowly eliminate all the “Wants” from the things you regularly purchase.
Start a dedicated travel fund
Create a new account with your bank (or a separate bank ideally) called “I’m Outta Here” and feed it monthly, weekly, or daily. Make it easy to transfer money over from another account and every time you go online to check your balance, transfer some money, even if it’s just $5. Make it fun. Make it a habit. Make it natural. Make it painless.
Spend less on lunch
It may be as simple as not getting a $2.50 drink (tap water is highly underrated as a beverage) but make a point of spending less than $8 on your lunch. Those savings will add up. Say you go out to eat five times a week. Just trimming your lunch cost from $12 to $8 saves you $832 a year! For even more savings, pack a lunch if you’re able.
Eat out less often
Restaurants put more holes in a saving plan than a woodpecker on amphetamines. Plus, learning how to cook for yourself is ridiculously gratifying. YouTube and Google are your best friends when it comes to learning how to make meals for yourself. Even in the United States, you can comfortably eat on $40 to 50 a week cooking for yourself. Simple unprocessed foods like rice, beans, chicken, pasta, potatoes, and vegetables are healthy and cheap.
Kill the cable TV dead
You’ll be surprised how fast your savings add up when you ditch cable TV. Several friends and family of mine pay up to $150 a month for their cable. That’s insane, it adds up to $1,800 a year. Even a more reasonable rate of $99 still ends up being $1,188. That could pay for an entire trip to lots of places in the world! Besides, there are plenty of free and cheap ways to get your entertainment. Netflix, Hulu, Amazon Firestick, and even YouTube. Books are cheaper than movies too.
Reduce your utility bills
If you have your own place, think about the little things that can save you money. Putting a sweatshirt on and keep the heat on low. Opening the windows to catch a breeze instead of using the air conditioner. Turning off the lights when you leave a room. Shortening your showers. Some areas of the country have more moderate temperatures than others, but even a few bucks a month pile up in your travel savings account. The average utility bill in the US ranges from $90 to $140 a month. If you can trim 15% off by being more efficient, doing fewer loads of laundry, and conserving energy, you could add around $225 to your savings, annually.
Skip the Luxury
Luxury feels so good, but comes with outrageous pries. Skip out on the short-term luxury of self-pampering (buying clothes, shoes, latest gadgets, etc.) and save more on the life-changing luxury of long-term travel.