1. Get Rid of as Much Debt as Possible
Hopefully this does not apply to you. Most of the European travellers I meet along the way don't usually have this particular problem. European governments tend to carry this radical idea that things like healthcare, public transportation and higher education are actually important and worthwhile things to invest into. Hard to imagine, I know.
But if you're American like me and free to splurge recklessly and endlessly into the night, chances are you've racked up at least some debt. Somehow along the way, it became normal for people to walk out of college with well over $100k in debt before they ever start a day of work in the real world. All of that on top of predatory credit cards and car loans offered to students straight out of high school.
But whether you're American or European or whatever else, debt is probably the biggest nemesis to an extended travel. I learned this painful truth the hard way. There is nothing worse than wanting an open ended travel with no time limits or deadlines, and knowing that you're travels could have gone on for a near lifetime staying in hostels under $2 a day; but in the back of your head you can't escape the harsh reality that each month laying out on the beach, another automatic payment worth hundreds of your hard earned savings are being depleted from your bank account in order to pay off your loans. Ultimately, by not eliminating your debts, you are cutting down on your total travel time dramatically. Either that, or putting yourself in an even worse financial hole to deal with later.
So make paying off your loans a priority before you take off on your travels. Start with the highest interest rate loans, working your way down. Of course, not everyone has the luxury of paying off all their loans if they still want to travel without a full set of grey hair. Fair enough. If you find that you can only realistically pay off your credit card loans, no worries. That alone will release a ton of weight off your shoulders when you are abroad. If you find yourself unable to pay off all student loans, make sure to calculate those monthly payments in while budgeting for your travels.
2. Cut the Crap A.K.A. Your Unnecessary Spending
I think no one should live their life half awake, which is the main reason behind why I drink as much coffee as I do. The other being that I'm a complete addict. But as lovely as it can be to sip this heavenly beverage, nobody needs to buy a $5 caramel macchiato every single day of the week. Apart from the fact that the sugar is slowly and mercilessly decaying your body from the inside out, a $5 drink, 5 times a week, adds up to $1,200 for the year. That's enough to pay for everything, including food and accommodation, in Southeast Asia for 1 or 2 months depending on how you splurge. I mean, don't not
ever have lattes. That would be cruel and unusual, but find a more affordable replacement for your daily fix. If you stop by Starbucks everyday on the way to work, replace that expensive habit by busting out that french press or moka pot at home instead.
When it comes to clothes, you all have too many. I know this! How do I know, you ask? I've seen your closets. Ok, well not yours per se, but I've seen enough to know what the average person hoards. I bet you probably haven't even worn half of the things hanging up in there. That's always the case with me, and I don't even think I'm that bad in this department. But yet we buy more. Perhaps it's time we all made an effort to only buy the things we know we will actually wear, even if it's just for the sake of contributing less to the unethical world of fast fashion. To get an idea of how much you spend on clothes, look at your wardrobe and try to calculate what you've spent on things you have never even worn, or have only worn once or twice. If you're like most people, you might be in for a surprise. Remember that's not even calculating all the clothes you've already donated or thrown out over the years.
Taking public transportation may be a great way to save.
Your daily commute burns a lot more cash than you might realize. The average American spends $8,776 per year on their car. From car payments to repairs, to filling up the tank, we spend a significant portion of our paycheck on our transportation. All else being equal, if you were to significantly eliminate your car expenses, you'd probably have all the travel money you'd need right there. Next time you're looking to get a new car, look at used options on Craigslist that you can pay for in full with cash. Buying used is not for everyone, but it can really help you in your effort to save. Obviously, repairs will be more frequent than with a brand new model, but over the course of time you'll save several thousand that you would have lost in depreciation and interest payments from buying a new car on credit. Another option if possible in your situation is to either take public transportation or ride a bicycle to work. Unfortunately for most Americans, suburbanization and car-centric urban planning has made most of us completely dependent on our vehicles to get around. It's not our fault that our parents' and grandparents' politics and prejudices made the entire country car dependent. But we can certainly be part of the solution by using more sustainable means of transit when possible.
Cutting down on one's spending can really be one of the easiest and least painful ways to save up for travels. It really comes down to forming more affordable alternatives to our expensive vices.
3. Make a Target Goal to Save up to
In order to find how much in total you need to save up, you'll need to determine how long you want to travel for and what you'll need as a daily budget. In general it is good to plan between $50 and $70 a day which would include food, accommodation, and transportation/flights. If you are a really seasoned traveler and plan to navigate cheaper countries you can budget between $30 and $40.
Are you planning to fill the void in your budget by working abroad during that time period? If so, make sure to account for a safe amount that will help you in the beginning while you're finding a job, just in case you don't land something right off the bat. Also, as mentioned prior, if you still have student loans or other obligations to pay off, make sure to factor those into your budget.
4. Set Aside a Fixed Amount Each Month until You Reach Your Goal
So once you've taken care of your debts and found out how much money you need to save for, the next step is to set aside a fixed amount of money until you reach that goal. As easy as that sounds, this step is perhaps the most challenging. Although it seems so straightforward, it's one of those things that's easy to flake out on when it actually comes to doing it. That's because there are always things that come up. Things that we don't necessarily account for. Big ticket items that just need a little extra of this month's paycheck. Just this one time. And as soon as that first time comes around when we don't fulfill our monthly goal, the whole idea seems to evaporate altogether.
One very effective strategy is to set up automatic monthly transfers from your paycheck into a separate savings account. Don't push yourself too hard with an amount that is overly high. Be realistic and honest with how much you can do. For most of us, we wanted to be out and about traveling
yesterday, but slow and steady wins the race. Even if it's just a couple hundred a month, your account is much more likely to actually get there by staying consistent.
