How to Save Money to Travel

For most people, the hardest part about traveling is finding the money to even save! I hear the same thing from my friends and family all the time, “Wow! I wish I could do that, I just don’t have the money now.” I’ll admit, to a large extent, traveling is certainly a privilege and many of us have too many other commitments financially. However, you’ll find a large percentage of the “I wish I had the money to travel” crowd actually does have money to travel, they just spend it on not traveling.

Here are some tips to better help you save to travel…

1) Make sure no more than 30% of your income goes to rent/mortgage.

Ideally, you’d want this around 25% or lower. Simply put, if you’re spending more than 30% of your income on living, then you’re probably living over your means. If you’re living rent-free already, congratulations! You’re way ahead of the game.

2) Develop a pie chart of all your expenses.

You should know how each dollar of your income is spent and stick with a plan. Currently, 25% of my income goes towards rent, 20% is allocated towards food, transportation, extras, and the other 55% goes towards savings, investments, and bills.

3) Discipline yourself and stick with the budget!

When I get paid, I immediately pay rent and my utilities before I even buy a bottle of water. I make sure all debt is clear. Once I pay bills, I immediately send the remaining 55% of my income to my savings account. When this is done, the only cash remaining in my checking account is the 20% I stated I allocate towards food, transportation, and extras. I stick with this balance. I divide the total balance by 31/30 days and make sure I stay within the budget each day. For example, if my daily limit to spend is $20 and I spend $25 one day, then I’ll make sure I only spend $15 the next day to cover for that previous day. Yes, I know it sounds crazy and restrictive, but developing these habits not only allow you to save to travel, but it gets you thinking about money in the correct way, so that you can also invest.

4) Stop hanging out all the time! 

Trust me, it’s a waste of time. Go home after work and cook dinner. Watch a documentary on Youtube, study finance, go for a jog, call family. There is no need to do happy hour after work and eat out everyday. Drinking is a huge waste of money. Let’s say the average person has 3 drinks when they go out, averaging between $5 to $10. That’s $15 to $30 wasted on something that doesn’t even do your body good. Now, let’s say you do that 3 times a week, that’s now $45 to $90 on alcohol. Translate that into a month and that’s now $180 to $360. Factor in eating out vs cooking over the course of a month and that’s potentially another extra $150+. Our grand total from drinking and eating out is now $330 to $510. That’s a round trip ticket overseas right there alone! Does this mean be a social outcast? Certainly not, but it helps to cut down.

5) Limit liabilities 

This is similar to tip number 4, but expands a bit. According to Robert Kiyosaki, author of Rich Dad, Poor Dad, liabilities take money out your pocket, while assets put money in your pocket. For the sake of traveling, let’s call it an asset, I like to think so. It can provide you with experiences, memories, knowledge, life, and even money depending on how you translate those experiences. Work to build assets and limit liabilities. Do you really need that cup of Starbucks before work each morning? Remember our drink breakdown above? Did you just buy a pair of sneakers that will be worth $0 in two years? Are you driving and in debt for a car when you can take public transportation in your city? Each dollar, peso, euro, yen or whatever you earn, think about how it can help you in the long run. Does it build an asset? Or is it a liability? Real estate, stocks, index funds, IRA’s, cryptocurrency put money in your pocket. Starbucks doesn’t.

Now you’re ready to save!

These five tips alone should help you save money to travel. It’s amazing how much you’ll save when you make an actual budget, write it down, stick with it, and cut down on liabilities. Always remember, a little goes a long way.