Essential money saving tips to achieve your around the world travel budget
Identify how much money you need for your travel
This one might sound quite obvious, yet many people do not follow it. Saving money for your travel is much easier when you know how much your trip will cost. This especially holds true for long-term travel. Always keep in mind: a plan without a goal is just a wish. The best way to find out how much money you need for your travels – and we might be a bit biased here – is to use the Leap app. Not only can you create country-wise travel budgets but also find out how much travel you can afford with your finances and track your progress as you save for your travel.
Identify how much money you (will) have.
After finding out how much money you need for your travel, it’s time for counting dollars and taking inventory. Write down how much money you have in your accounts or in cash. Then, make a list of all things you would like to sell before going on your long-term travel. Make sure to note down everything, not only the high-value items such as your flat or your car, but also the low-value items as many small amounts accumulate to make a large amount. Next, estimate for what price you could sell each of those items, either online or on flea markets. If you have no idea what price to achieve, then 30% of the purchase price is a good estimator. The sum of all items on your list plus your current savings tells you how far you are from traveling the world.
Track your incomes and expenses.
If you have not yet gotten into the habit of tracking your finances, then now is the best time to start. Track your monthly incomes and expenses in different categories to find out where your money is going. You can do this on a spreadsheet or using a mobile app.
Analyze and categorize your expenses.
As for most people it is easier to cut down on expenses rather than increasing incomes within a short time, it’s best to start with the former. Now that you tracked your expenses for at least a month, it’s time to analyze the flows. Start by finding out which type of expenses you can control in the short term (expenses on gifts, restaurant visits, cinema, etc.) and which ones require a long-term change in your financial spending behavior (e.g. expenses for your flat, car, etc.). Note that some expense categories may fall in between or in both categories: while you cannot cut down on expenses in the supermarket completely, there is a chance you can reduce your spending by buying only seasonal fruits and vegetables or abstain from sweets. Next, take the expense category for which you have identified the highest saving potential and make this the first to work on.
Regulate the spending on short-term controllable costs.
Start by focusing on the category with the highest saving potential identified in the last step. From now on, do only buy what you really need, not just everything you like. Keep tracking your expenses and working on achieving your savings target. As you reduce your spending in one category, apply the same principles to the others.
Shop only for the trip.
As you accumulate more savings for your travel, it is time to start living as if you were already be traveling. If you need new clothes, buy only those which you will take on your trip. If you need a dress or a suit for a party or other occasion, rent or take it from a friend because you might not wear it anymore after your trip. But also do not buy a lot because your taste or travel style will change as you travel. Also, you will find the right clothing, including the branded ones, for mostly a cheaper price at your low-cost travel destination.
Make a plan of when to stop your subscriptions.
Make a list of all subscriptions you have (internet, gym, health insurance, sports club) and end them on time so that you are not paying them unnecessarily during your trip as most subscriptions have cancellation periods in their terms and conditions.
Start selling the furniture and goods that you will no longer need.
It might take a long time to sell everything, especially if you want to achieve a good price. Although somebody somewhere might be looking for your stuff and willing to pay almost the same price as you when you bought them, chances that this person finds you on time are low. Hence, to make sure you do not end up freeing your stuff out of desperation. Put them online as early as possible on eBay or craigslist.
Spend smartly on travel gear and electronics.
Many travelers spend a significant amount of their travel budget on gear and electronics before starting their travel. With wrong expectations on requirements and travel style, many of them end up buying things they don’t need. Our tip is to buy as little as possible and fill your backpack as you travel with gear purchased at your travel destinations. If you want or have to purchase an item in your home country, do not forget to compare prices online and critically evaluate which features are must-haves and which ones are nice-to-have. Often, it is better to buy a mid-range phone with only must-have features instead of a high-end one with many nice-to-have features, especially if you travel to places where there are chances of robbery.
Set up your financial priorities.
It is perfectly alright to say no to the expensive outings with friends or colleagues because you want to direct your money towards achieving the target savings for your travel. Instead of going for the three-course-dinner, you can catch up with them later or join only for the dessert.
Save on transport.
Switching to cheaper transport options such as public transport, car-pooling or car-sharing can help you save a significant amount of money over time. Although taking public transport consumes more time than other alternatives, it is often the cheapest option and it will give you a good start to getting used to traveling with buses or trains, especially if you plan to use public transport in your trip around the world.
Keep adjusting your target savings.
Set the target for each month on how much you want to save and push every month to increase this target. Pushing yourself to save more doesn’t mean to cut down on essentials and restrict on every purchase, it simply means being more mindful of your needs and asking yourself if you really need it. It might seem difficult in the start but you will feel more disciplined in your actions and satisfaction with the results.
Sorting out your banks or credit cards.
Make sure to have attractive bank and credit cards in place before you set on to your travel adventure. If your bank charges an account maintenance fee or doesn’t provide a free credit card then you know it’s the right time to switch. Look for the banks which do not charge a monthly fee, provide credit cards on lowest rates and have good support for online transactions.
Join a frequent flyer program.
Now that you are all set, one last to-do until you are in your home country is to join a frequent flyer program to not only save a few bugs, but also get to enjoy the additional benefits of their program.