“How are you able to afford traveling to Japan so much? I hear it’s so expensive there!” These are questions I’ve been asked many times over. I always say there are easy things you can do to cut travel expenses, such as stay in hostels, eat at casual restaurants, or cook your own meals. I also say that I’ve become the kind of person that rarely gets manicures, has cut cable TV out of my life and also renegotiates my internet bill every year. There’s a lot that goes on behind the scenes in order to make my travel goals a reality. My mom loves to use this Vietnamese euphemism “don’t spend money like running water”, which I think we can all take a note from.
Going on vacation doesn’t necessarily mean you have the green light to burn through your hard earned cash. There’s no rule that says all travel needs to be in luxurious environments. In fact, I’ve found that travel is more meaningful when I stumble across delicious street food or learn more about a place by reading up and becoming my own guide. Budget traveling is a lot about learning how to stretch your dollar during and before a trip. I’m here to give you a few ways you can formulate a money saving strategy that is so foolproof that even YOU can’t sneak out of it.
Start with ground truth. What are you spending?
It’s hard to measure progress when you don’t know where the baseline is. That’s like a competitive racer saying they want to beat their score when they haven’t been tracking their time history. You won’t be able to uncover the best way to save unless you know what you are spending. For those of you that prefer to use your card, Mint is a powerful and free tool that aggregates your spending and even logs your assets and investments. Pick whatever method works for you. If you prefer logging your own expenses with a spreadsheet or keeping records on pen and paper– go for it!
Understanding your spending history will help you uncover certain “weaknesses” in your habits. Are you spending more than 20% of your income on dining out? Are your fixed costs (rent, mortgage, car payments, insurance, phone bills, etc.) eating up a majority of your paycheck? Are you spending more than you even have and going into debt every month? Once you are armed with your own ground truth, you’ll be able to create a specific strategy for yourself to save money fast.
Study yourself. What makes you tick?
Have you ever been around a group of kids and have tried to convince them to clean up after themselves? You might have quickly realized that the “one size fits all” strategy doesn’t always work. Never assume people are motivated by the same things, which is why you should also take a custom approach to goal setting for yourself. Taking a look at your spending history might indicate you have a few vices, such as online shopping. Now, think about the root cause behind this behavior. Are you shopping out of boredom? Are you an impulse buyer? Do you feel the need to buy the same things that your friends have? Or, take a hard look at your fixed costs. Why are you spending so much every month on your phone bill? Are you even utilizing your data plan to its full capability? Are you renting your apartment in the city because you’re afraid you’ll be bored in the suburbs? Reflect upon the things that make you tick because it will be a lot easier to curb certain spending habits when you understand your rationale behind them.
The classic horse and carrot on a stick. What’s going to make you gallop?
At this point, you may have a lot of ideas swirling around in your head. Perhaps you’ve realized you’ve been spending way too much on food and drinks because you keep getting roped into expensive social situations by your coworkers and friends. Maybe you’ve uncovered that you’ve been spending over $60 per month on subscriptions you don’t even use. You know what you need to change, but you aren’t sure what the best method for approaching it might be. Luckily, we’re about to discuss ways you can craft a game for saving money. So what kind of player are you?
- Competitive: If you aren’t first you might as well be last
Example: Get a group of friends together to see who can spend the least amount of money on lunch for an entire month. Track on a leaderboard.
- Sprinter: Intense, short bursts of effort
Example: Challenge yourself to go 20 days spending 50% less of what you normally do on discretionary expenses (non-essentials).
- Milestone Maker: Weekly or monthly
Example: Only allow yourself to go (insert your weakness here) once every 3 months (instead of once a month as you currently are).
- Habitual: Develop a daily routine or healthy practice
Example: Read a money saving article every day or when paying in cash, round up to the next whole dollar. Put the spare change in a jar for your travel funds.
- Visually Inclined: Seeing your goal front and center
Example: Post a picture of your dream destination on your front door and on your phone screen. Every time you leave the house or look at your phone, you’ll be reminded of what you are trying to achieve.
- Social Pleaser: If everyone knows you can’t possibly let them down
Example: Shout it from the rooftops. Let everyone know that you have vowed not to step foot in a mall for the next 6 months. If anyone catches you there, you’ll have to clean their bathroom (or another chore you despise).
- Scarcity Seeker: How long can you go without?
Example: Refrain from buying anything full-price for as long as you can. This includes groceries, household goods, clothing, and electronics.
If any of the above-mentioned games sound fun to you, try implementing one or two for yourself! The key is to keep this money saving challenge engaging. Once you start losing interest it is time to switch it up.
Quick and Easy Changes You can Make Today
- Automation: Sometimes, it’s a lot easier to forget that you are saving money when it’s passive. Most employers have an option to split direct deposits by percentages. Have parts of your paycheck route directly to your savings and be pleasantly surprised in a few months. Some banks such as Bank of America will even give you the ability to round up your spare change to the nearest dollar and deposit the extras into your savings account.
- Constant Reminders: Repetition will eventually sink in. Create phone notifications, calendar reminders, and even sticky notes of your goals so you don’t lose sight of your mission. Encourage friends and family to hold you accountable by checking in frequently on your progress.
- Old School: Make yourself a good old fashioned piggy bank. Put your loose change and spare dollars inside. Or better yet; every time you save money from using a coupon, add the savings to your piggy bank.
- Travel Mind: Think about the value of your money and translate that into your travel goals. For example, if you decide to rent a movie instead of going out every month, you might be looking at $120 at the end of the year (assuming a movie rental is $2 and cinema tickets are $12). That money could easily float a portion of a domestic flight, an adventure excursion, or even pay for an entire week’s worth of lodging in Southeast Asia. How about cutting cable? You might be spending as low $40 per month on cable with your internet bundle. That’s still $480 per year which could be a ticket from San Francisco, USA to Lyon, France. I’m serious! I just spent $403 on my flight with Air Canada.
“Life is about choices and prioritizing what’s more important to you… a $2 Redbox or your next vacation? The choice is simple when you put it in those terms.” – Lee Huffman of BaldThoughts, a website on traveling more, spending less, and living better.
Now that you have a solid baseline for saving money, there are endless ways you can stretch the value of your hard-earned dollar.
Consider Doing This Yourself…
- Eyebrows, Facials, Waxing, Nails
- Cleaning, gardening
- Learning new skills through online courses or books
- Repairing broken items instead of buying new
Decrease the Frequency Of…
- Dining out
- Ordering drinks and desserts at restaurants
- Haircuts (especially avoid hair color)
- Buying new electronics
- Buying new clothes unless you truly need it
Renegotiate Your Rates…
- Phone plan
- Internet plan
- Cable plan
- Auto insurance
Avoid Large Unexpected Expenses By…
- Routine health and dental check-ups
- Regular oil changes and car maintenance
- Maintaining your home on a regular basis
- Shopping without a specific list
- Abiding driving laws on the road and avoid tickets
Reconsider Whether You Need and Eliminate If Not…
- Cable TV
- Gym memberships
- Merchandise subscriptions, magazines, etc.
- Email subscriptions to your favorite stores
- Auto-saved credit card information to make it slightly more annoying to make online purchases
- Late, banking, and interest fees
- Brand name items versus generic ones
- Apartment rental cost
Good Savings Practices…
- Did you get a rebate, bonus, or tax refund? Reward yourself with a small treat (or simple pat on the back) and save the rest
- Audit your home energy and water usage
- Use your own refillable water bottle (especially at the airport)
- Make coffee at home instead of buying it
- Practice resourcefulness and the act of reusing when possible
- Never spend beyond your means
- Pick up a side hustle to fund your travels
Questions To Ask Yourself…
- Can I borrow versus buy?
- Can I buy used versus new?
- Could I find it on Craigslist?
- Can I wait until it’s on sale?
- Are there leftovers from this meal that I can eat later?
- Could this go under a tax shelter?
- Can I volunteer at this event to get free admission?
- Are there hobbies I’d like to pick up that are low-cost?
- Will I survive if I buy this item in two weeks or next month?
- Would I benefit more from a travel incentivized credit card versus the one I have now?
- Do I really need to live in a place this big in this particular area?
- Am I being wasteful?
- Can I spend time with my friends and family without using money?
- Can I walk there, carpool, or use public transportation?
Now that you’re on the way to saving money…
A word of caution– don’t overwhelm yourself by trying to tackle everything all in one day or even one week. Good money saving practices take time and there will also be an adjustment period, especially if you’ve been used to doing things a certain way for so long. Instead of going “cold turkey” on activities you enjoy, simply reduce their frequencies. You want to keep yourself excited and engaged about your money saving goals instead of seeing it as your “ball and chain”.
Create positive associations with these tips on saving money and don’t forget to celebrate little wins along the way. One thing that I am constantly working towards is learning to want the things I already own. Experiences can be so much more enriching than owning material things. Ten years down the road, I will still be fondly remembering my time trekking among the Alps on the Tour du Mont Blanc. Twenty years from now, I’m sure I’ll be reminiscing about swimming alongside marine iguanas in the Galapagos. I’m pretty I won’t be lamenting over any reality TV shows I may have missed from not having cable these past few years. So, I wish you the best of luck on your money saving journey. Good things await you!
Are you ready for the next step? Read my 10 golden rules for smarter travel.
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