This is probably the number one question I get from inquiring minds. Travel is not always cheap, so how do I afford to do it so much?
The first and most important answer is that I am lucky enough to have a well-paying job that gives me a decent amount of disposable income. I feel that’s important to mention in any discussion about saving for travel. I hate the disingenuous articles from writers who make it seem like saving for travel should be easy for everyone. That’s not always true since people have a variety of incomes and financial responsibilities.
But if you do have some disposable income and you’re wanting to know how to cultivate a travel fund, I’ve got a few tips.
Calculate. Before you can figure out how to save, you have to figure out how you spend. I suggest using a worksheet like this one to figure out exactly how you’re spending your income each month. From there, you can easily see where your disposable income is going, and where you could make some cuts. For me, spending money is like snacking: I had no idea how much I was doing it until I took the time to write it down over the course of several weeks.
Make saving easy. I would never put money aside for travel if I left it up to my already over-extended brain to remember to do. So I’ve set up a number of automatic savings plans that do it for me. I use Capital One 360’s automatic savings plans, which I’ve set up to pull specified dollar amounts from my checking account once a month. I actually have two travel-specific accounts: one for my future “round the world trip” that I don’t touch, and a second “vacation” fund for spending money when I’m on a trip (I just transfer however much I think I’ll need to my checking account a few days prior to a trip).
There are also several apps that allow you to both track your spending and set up automatic savings. I use Digit, which withdraws a few dollars from your bank account every few days, in amounts you can afford (which it calculates based on your balance and spending habits), and puts them into a savings account that you can access any time, with no fee. They have a no-overdraft guarantee, too. Another similar app that I’ve heard of but not personally used is Acorns.
You can also make travel easier on your wallet by earning miles and points through the use of travel rewards credit cards. I always put my flights and lodging on my travel credit card and pay it off the next month, so I can rack up miles, but that topic deserves a post by itself, which I’ll be doing soon.
Consistency is key. The best way to build your travel savings is to be consistent in adding to it. It might take a while to build up, but you’d be surprised how much money will be in there if you regularly contribute to it over the course of a few years. Even if you contribute just $100 a month, that’s $2400 in two years; enough for two plane tickets to pretty much any destination in the world. Even if you can only put small amounts aside, it’s better than nothing! The key is to actively contribute to it, in whatever amounts and on whatever schedule works for you. Your travel plant won’t grow unless you water it (or some other analogy that is better than that).
Make small adjustments. Saving for travel is different than, say, saving for retirement. For the latter, you’d need to focus big picture on things like tax consequences and investment strategies and diversifying your savings in different types of accounts. Saving for travel, in my experience, comes down to making small adjustments of your daily routine.
Example: I used to buy coffee every day, which worked out to about $4-$6 a day, depending on how #basicwhitegirl I was being that morning. But let’s call it an even $5. That’s $35 a week; $140 a month; or $1,680 A YEAR. For coffee. FOR COFFEE. That amount is more than what I spent on a 12 day trip to Turkey. I started making coffee at home and began putting that money into my travel savings.
And that’s just coffee. I used to buy my lunch almost every day, which cost anywhere from $8-$10 per lunch. That’s about $200 a month, or $2,400 a year. $2,400! A year! For a mediocre lunch that’s not as good as something I could make myself. Start bringing your lunch to work if you don’t already, even just 3 or 4 days a week, and that’s probably around $1,500 you can put into a travel fund.
I don’t know your personal spending habits so I can’t give you specific advice, but I’m positive everyone could look at their spending habits and find a place you could stand to make a cut and devote that money to a travel account.
Prioritize. At the end of the day, it all comes down to priorities. You can save for travel if you prioritize it over other things. That’s what I do. Tax refund and birthday or Christmas money? Straight into the travel account. Shopping? Of course I shop, but I go to places like H&M, TJ Maxx and Marshall’s, or the occasional thrift store, instead of blowing money on costly clothing. Expensive car, designer jewelry, eating out all the time? Nope.
I’ve determined that these things are not very important to me. I’m more interested in collecting experiences, not stuff. The first thing you have to do if you want to save for travel is to decide it’s a priority and, to quote Captain Picard, Make It So. That means making sacrifices elsewhere in your life, like saying goodbye to your basic bitch coffee habit or committing to cooking meals at home more often.
If you have any specific questions for me, please feel free to ask me directly or in the comments!