Start a Travel Fund? Are you nuts? I can barely pay my rent?
If this is your initial reaction, you're not alone. There are millions out there that want to travel. They want to see the world. They just want to sip on a margarita on a beach. You want to do all those things.
BUT… you have bills. A mortgage, rent, hungry children, student loan debt…. Should I keep going?
There is no way you can afford to travel…
OR.. is there?
If you are expecting to manifest enough money to travel around the world overnight, unfortunately, I cannot help you. But if you are determined to find a way then these tips can at least get you started on building a travel fund.
Now before we get into the tips that I have personally used to start a travel fund I have to say that you should remember. Travel is a privilege. And while people have differing opinions on this subject we have to remember that things like a roof over your head and food on the table are more important than jet setting around the world.
No matter what you do make sure you are being financially responsible. While it is quite possible to cut corners here and there in hopes of booking your dream vacay, it is more important to pay off debt, save up for retirement, and have a solid financial foundation.
Need help trying to figure out how to budget. Check our our guide on living on a budget fabulously.
When I first graduated I was over 150K in debt. My travel took me to Coney Island. Fast forward several years later and because of the work I did I have a solid foundation to travel more freely.
So let's get started with the list. It is why you're here in the first place right!!??
(1) Be Cheap AF
No, I am being serious. I am cheap. I don't like to spend money. Whether I can afford it or not why would I spend money on coffee when I can make my own at home. Do I really need that fancy $15 cocktail because it has a flower in it. Absolutely not. This is really the only rule you need however let's break it down a little further. I want to make this easy for you.
We are in this together. You got this.
(2) Assess your spending.
The first step to budgeting for anything whether it is travel, your first home or just a rainy day is to assess your spending. You will be surprised by how much you can save just by doing this exercise.
Pull out your bank statements and credit card statements for at least the past three months and take a look at where you're money is going.
I assess my spending and lifestyle thoughout the year and the small changes I personally made have helped me to have the ability to travel more. Need ideas. Check out the things I gave up to travel more.
(3) Ask yourself? Do you really need it?
Once you have a better idea of where you're money is going it is time to really get down, dirty and honest with yourself.
We all have our vices. The things we just can't live without. Or at least the things we think we can't live without.
You do not have to give everything up. This exercise doesn't mean you give up the little luxuries that make you happy. This exercise is meant to help you identify what those luxuries are so later you can decide whether they are more important than saving up for a trip or your first home.
You should now have two lists to work off of. The first list is your must-haves (rent, food, utilities). The second list is the things that are nice to have and make you happy but you do not need (for me that is wine, books, and shoes).
(4) How much money do you really have leftover?
Take a look at your spending for the last 6 months. How much do you have leftover after all the bills are paid? Is there anything left over?
If the answer is no or the answer is that you are in the negative don't worry. The reason why you're reading this is that you want to change that. And you can. I am here to help you do that.
If the answer is yes then write that number down because you have a few options.
(5) How much do you need?
Before we dive into what to do next we need to figure out what your goals are? How much do you need to save for that trip? Once you have that number in mind it will be a lot easier to come up with a plan. So figure out that number.
Need help trying to figure out how much you need and where to go? Check out my Travel Planning Guide. It includes tips on how to come up with a budget, find budget friendly destinations and save money during every step of the process.
(6) Cutting Back
You want me to give up what!!!??
Yeah, I know. But now we got to get real? What is more important to you? That glass of wine (insert luxury here) or going on your dream vacation or buying your dream home?
Before you start giving it all up or fighting me for recommending that you give it all up think about why you are even here reading this.
There is something that is more important to you than that morning $5 latte. There is something that is going to bring you far more joy. Keep your eye on the prize and let's go through this exercise.
Remember that list I told you to make. Ok. Take a look at it. What is on that list and what are you willing to cut out to save up.
If you already live a relatively simple and lean lifestyle then you may need to get a bit more creative with this. And since I cannot tell you what to cut out since I do not know what is on your list I will give you some examples of things I have personally done that have helped me to cut costs.
- I love books. That's something I was not willing to give up. I stopped buying books and got a library card. I still get to have the books that bring me j0y but I am saving by not buying them.
Here are some ideas from some of my fave budget experts that will help as well:
- If you like to go out then find free things to do near you. Janneke from HappyFrugal has some great ideas. Here is one of my faves. “Going to the beach or the park is free and can be a lot of fun. Take your picnic blanket and basket filled with food and drinks and enjoy!”
- Clarissa Wilson really puts things in perspective when it comes to going out and more specifically eating out. The numbers she shares really makes you think twice about ever eating out. “Make everything at home. But if you really can't cut out all eating out, then only eat out once a week. It's so much cheaper to cook everything at home and it's healthier too. Plus on average you spend $10 per meal out per person, but when you pack your lunch it costs about $3.50 on average. So say you are a single person and you want to travel and you eat lunch out at work every day. So $10 x 5 days is $50 a week x 4 weeks = $200 a month that you spending on eating out each month. But if you pack every day, that is $3.50 x 5 = $17.50 x 4 weeks = $70. Overall you are saving about $130 a month just by packing your lunch for work.”
Poor In A Private Plane Tip: When I travel I try to find hotels that have kitchens. While one of the amazing things of traveling is experiencing the food we save by eating our big meals for lunch and cooking a couple of meals at our AirBnb when we can. There are several travel sites that you can check out to find apartment style accomodations and make your travel dollar go further.
- If you are really hitting a wall when it comes to your budget it may be worth considering relocating to an area with a lower cost of living. Dela from Savvy Money Moms had the right idea. “We used to live in the UK and money was getting extremely tight for us. To be honest each month we were sinking further into debt and we really couldn't see a way out of it. I was a stay at home mum at the time with 3 children and my youngest was only 1 so there was no way I could get a job. With what seemed like no other option we decided to leave the UK and move to Ghana where both our families are from and the cost of living is much lower. We are finally almost debt-free now. We could never have done that if we had stayed in the UK.”
- And finally, Kristy from MoneyBliss brings up a great point. Sometimes it's not about cutting back but rather identifying the money mistakes you're making. Her post on Money Mistakes to Avoid really is a game-changer. So if you feel really stuck give it a read. Spoiler Alert: Your Money Mindset really makes a huge difference.
(7) Create a Budget
So you have a few numbers. You have the number you have and the number you need. So let's say you decide that you need to save $1000 for your vacation. And you identified $50/week that you can set aside for it. Set up an automatic savings plan with your bank so that $50 automatically deducted from your checking account and put into your savings. In less than 6 months you will have over $1000 in your “travel fund”.
This is the easiest part of it. You already did the hard work. Now it is time to just sit back and watch that travel fund grow.
More tips for creating a travel budget.
Whether you're saving for a dream vacation or something else saving doesn't have to be difficult.
And because it is different for everyone depending on their circumstances here are some additional ideas to keep in mind.
- Dylan from Swift Salary has a great idea. Negotiate your bills. “This is something that services can do for you automatically now but really all it takes is a phone call and a bit of a strategy. The savings can be pretty significant too if you're successful.”
We did this a couple of years ago and ended up saving thousands a year on our cell phone, cable and internet. And it was as easy as picking up the phone and calling our carriers.
- Thass from Family Off Duty relocated to another country where the cost of living was cheaper which afforded her and her family the opportunity to travel more.
- Jill from Five Senses of Living makes travel a priority by using sinking fund. A very innovative idea if you ask me.
Remember travel is a luxury. However, it is a luxury that can be had at any budget. With a little bit of creativity, you too can be jet setting around the world.
Looking for ways to top off that travel fund. Check out this list of side hustle apps to help you make some extra cash today.
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