The First Step in Saving Money for Travel
I’ve been receiving lots of inquiries from readers asking how they can travel long-term. To each reader, I say the same thing: it starts with building up your savings. Even if you have no idea when or where you want to travel, start the savings now — you’ll have a head start when you decide what you want to do!
Here are the steps to saving enough travel money for your dream trip:
- Take Care of Your Debt
Paying off any high-interest debt is absolutely vital before you travel. If you carry any high interest debt, like a credit card balance, car payments, or high interest student loans, proceed to steps 3 and 4 and use the extra cash to pay these balances off first.
Keep in mind that not all debt is bad. Student debt is often at a low enough rate that you can budget your monthly loan payments into your travels.
- Open a Travel Account
Open a back account that’s exclusively for your travel savings. Use a bank that doesn’t charge you monthly fees. (If this were another time, I’d recommend opening a high interest savings account, but those are few and far between these days. An account that doesn’t charge you should be enough.)
- Figure Out Your Expenses
Go through your monthly expenses and find out what your essential costs are. The bare essentials: rent, food, utilities, transportation.
After that, add up your less essentials: gym membership, Netflix, cable, whatever you need to keep you sane, whether it’s yoga classes or a weekly movie. Don’t even think of adding an alcohol budget.
With the lesser essentials, keep some and eliminate others. That will free up more space in your budget.
- Save the Difference
Add up your essential monthly expenses. Add on £100-200 for incidental expenses. Subtract it from the total you get paid each month — and the moment your paycheck goes into your account, immediately transfer the difference to your travel savings account.
Now, here’s the important part — don’t touch that travel account! Train yourself to live on the amount you’ve allotted yourself.
If you follow these steps, you will be saving money at a far faster than you ever imagined. And what does that mean? You’ll get to travel sooner, or for longer. And that can make a world of difference.