How to save for the trip of a lifetime

Big trips require some big planning and budgeting.  Most of us don’t work jobs that afford us the income to just jet around the world whenever and for however long we want.  Instead, we need to budget, we need to save, in order to put ourselves in the position to afford that trip.  If we want to take off for Southeast Asia for 3 months, spend a month driving around Iceland, or just lounge on Copacabana beach for the summer, it’s going to take some work.

Learn to save to enable long-term travel

Travel over the long term is expensive, but it’s more doable than you’d think

Most of us spend more than we realize and save less than we should.  It’s so easy to do when all your purchases are done with a swipe of your card.  One of the most common excuses I hear from people about why they can’t travel is “I can’t afford it”.  In most cases, they’re lying.  They could afford it if they actually took a look at what they were spending their money on and put together a budget.  I’m going to show you the steps I go through when I plan for a big trip abroad.

1.  Plan.

First things first: decide where you are going and how long you’re going to be there.  This is the easy part, since most of us usually have a few trip ideas rolling around in our heads at any one time.  And there are usually time restrictions already in place, like how much vacation time you have saved up, how long your work can afford to have you gone, or how long your summer/winter vacation is.  Once you have the “where” and the “how long”, the next step is to get a general idea of how much your trip is going to cost you:

  • Determine a general travel cost figure

    • Look at where you are going to be traveling, for how long, and how much per day you expect it to cost in that part of the world.  There are a lot of great resources for this, sites like Wikivoyage and Travel Independent.  Check them out and put together an idea of what you should budget for each day while there.

      • When it doubt, round up.  If you’re heading somewhere where the general cost is expected to be $40-$50 per day, and you’re not quite sure how much you’ll be spending, go with the higher number.  It’s better to have more money than you need than not enough.

    • Take that daily cost number and multiply it by the number of days you expect to be gone.

    • Include your initial plane ticket.  Look at general prices for how much it costs to fly to the part of the world you want to explore.  Personally, I check several general ticket search engines like Skyscanner, Google’s ITA Matrix, and Hipmunk to anticipate about how much to put aside for a ticket.

    • If you are going to be on a long term trip, price out some travel insurance plans and include that into your travel cost figure.

    • Don’t forget about potential Visa costs.

    • If you’re going on a very long term trip, make sure you’re also setting aside funds for required bills back home, like student loan payments.  As well, you should work hard to pay down credit cards as much as you can (or ideally not have any balance on them at all).

2.    Determine your current monthly expenses

  • Open up your online banking and go through it.  Break it down.  Go through a full month and look at everything.  You need to have a solid grasp on what you’re spending, what category that spending falls under (groceries, rent, bills, fun, etc.).  It’s only after you know where your money is going that you can start to determine where you can find savings.  Here are some questions to ask as you’re going through the month’s spending:

    • How much do you spend on rent?

    • How much do you spend on groceries?

    • What about eating out?

    • And going out?

    • How much do you spend on alcohol?

    • What about your cell phone bill?  Internet bill? Insurance?

    • Credit cards?  Student Loans?

  • Take those expenses as an opportunity to identify savings.  This step is going to be time intensive, and doing this kind of self-inventory is hard work.

    • Can you cut down on your food budget?  Can you go from name-brands to generics?  What about buying food in bulk?  Personally, food is one of my biggest expenses.  Both my girlfriend and I love to cook and experiment in the kitchen.  So when it comes time to save for a trip, what we cook changes and we’ll do more of inexpensive foods or things that can be cooked in large batches.

    • How much do you go out to eat?  Can you cook at home instead?

      • Food, in general, is an easy way to save.  You can do things like cooking large batches of food (like stews, rice dishes, etc.) and portioning that out for a weeks worth of lunches at work.  Rice, lentils, and beans are versatile ingredients; they’re cheap, nutritious, and you can buy them in bulk.  Check websites like Saveur and epicurious for recipes.  Being able to cook is a fantastic life skill, and will save you money throughout your life.

        Cooking - save money on food

        Cooking your own food will save you money on food and it’s a valuable life skill

    • Can you change your cell phone plan?  If you’re at a point where you can switch carriers, look for deals.  You may have to sacrifice having the latest-and-greatest smartphone, or the highest level data-plan, but if it means getting to explore the pyramids in Bagan that much sooner, it’ll be well worth it.

    • Cut down on going out.  You can replace that with staying in activities, like watching a movie or hosting friends.  Also, can you cut back (or completely cut out) drinking?  Booze can be a huge expense, and cutting it back is an easy way to save.

    • Rent – Are you near the end of your lease?  Can you take on a roommate, or move somewhere less expensive?  If you’re planning for a very long or open-ended trip, is it feasible for you to move home?  It may not be ideal living at home, but if it means facilitating your long-term wanderlust (and your parents are cool with it), you should take a look at it.

    • Are you currently paying for television?  Consider cutting the cord and replacing it with internet options like Netflix, Hulu, etc.  The internet is more than capable of handling your entertainment needs.

    • Is public transit a feasible option?  Could you get rid of your car and just take the bus?  Cars represent a consistent monthly expense and if you can cut that out, you’ll save on gas, insurance, parking, and maintenance.

  • Take the estimated cost of your trip and divide it by your monthly estimated savings.  This should give you a rough number about how long it will take you to save for your dream trip.

  • If you are going on an extended trip (one in which you may be leaving your job or apartment behind), determine how much you might need in an ‘emergency fund’ or a ‘reintroduction’ fund, if you plan on returning and readjusting after the trip.  It should be enough to cover several months expenses while you look for a job.  It’s important to put this money aside, because you do not want to screw yourself over and come back from your trip jobless and broke.

3.    Putting the plan into action

  • Set up a travel specific account.  Shop around for the best rate you can find.  Either with your current bank, or check out a site like bankrate.com to find the best place to park your money.  You won’t earn a ton of interest right now, but you might as well find the best rate you can.  And the advantage of setting up a separate account is it removes the temptation to dip into those funds.

  • Set up automatic direct deposit.  Determine how much you can take out from each paycheck and automate it.  It makes sticking to a schedule so much easier.

  • Do as much of your regular weekly spending as you can in cash instead of card.  Going to the grocery store to stock up for food for the week?  Take that weeks grocery allotment in cash and leave your card at home.  Keep your spending to just that amount.  Having a finite and physical object in your hand (like a limited amount of cash) makes it much easier to stick to a budget.  Using a credit/debit card, where all you have to do is swipe the card to cover whatever the balance is makes it easier to exceed your budget.

  • After the first month trying this budget, you may need to evaluate where you stand.  For instance, were you too conservative in estimating how much you can save and you’re actually able to put more money away than you thought?  Or are you finding out that you’re really not able (after genuinely trying) to save as much as you hoped?  Adjust,and adapt your budget.  Even if it means postponing your trip by another month, it’s better to do that than to go into a big trip without being fully prepared.

4.    Earning supplemental funds.

Side jobs or standalone gigs represent a way to pad your travel budget or make that dream trip happen sooner.  They could represent anything from having a few extra bucks to spend each day, all the way up to building an online portfolio and presence that will enable very long term travel.  If you have the time and the inclination, seriously consider this route — It may mean a substantial time investment, but it can really pay off.

  • Consider looking for side jobs.

    • Can you take on a part time job?

    • Can you donate plasma?  Here in Seattle, we have plasma donation centers that pay about $30 a visit, with the potential to donate at least once a week.

    • Are there paid one-time gigs, like working at an event or festival, that you could find on craigslist?

    • What about working online?

      • Clickworker, mturk, and content writing sites like textbroker, writersdomain, writeraccess, and constant content are all options to earn some spare cash in your spare time online.

      • Have you thought about blogging?  Web-design?  App development?  These are also all feasible options to earn some cash online.  Web-design and app development will offer more ready returns than blogging, but all three do have potential.

    • Can you freelance through sites like odesk or elance?

  • Selling your possessions

    • What unused things do you have?  Be harsh in how you evaluate your stuff and see how much you can cut down.  For example, consider:

      • Selling your books.  Do you use it regularly?  Will you read it in the near future?  If you answered no to either of those, sell it.

      • Furniture.  Do you have any excess you can put up on craigslist?  If you’re going away from a long time, you’ll want to progressively get rid of your excess furniture.  Unless you like the idea of paying for long-term storage.

      • What about clothes? Take those shirts or accessories you don’t really wear and see if you can sell them to used clothing stores.  If you can’t get rid of them there, donate them.

      • And kitchen gadgets?  Anything you can sell on craigslist?  Do you really need that air popcorn popper?  Or that deep fryer?  Get down to the bare essentials.

      • Electronics?  If you’re no longer using that stereo, or that Xbox, sell it.

      • Can you sell your car?  Being able to get the lump sum from selling the car, along with the added savings of gas, maintenance, insurance, and parking, can really add up.  If public transit is a viable option in your area, give selling your car some serious thought.

Big trips mean asking big questions and making big changes.  And the longer you want to travel, the more ambitious you get, the more changes you’ll need to make to your lifestyle.  It won’t be easy, but when you’re laying on the beaches in Vietnam or eating curry in Phuket, you’ll be grateful you put in all that effort.

Readers:  Do you have any budget tips to share?  Any tricks you use to save money for your big trips, or ways you’ve found to earn some extra cash?  Please share!

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3 thoughts on “How to save for the trip of a lifetime

    1. epiccuri Post author

      Totally. It’s exciting, when planning for a big trip, to think of getting rid of all your unnecessary “things” and get down to only those things you really need… and making them fit in a backpack.

  1. Gracey spurek

    Planning is the first thing that you should do while thinking of trip. Planning can really come out with many ways of reducing your expenses. Like you can do an advance booking of your flights to get discounts on your flight tickets rates. Thank you sharing such an informative blog.

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