How I Afford Traveling: Step 1--Saving Money
You want to travel, but there's one big thing stopping you--money. How the heck are you going to a) afford to pay for everything b) go without a paycheck while traveling (this is more applicable to those wanting to travel for an extended period of time). Well I did it straight out of college and three months later, having travelled through Thailand, Indonesia, and Japan I have yet to run out of funds. In fact, I could technically keep going indefinitely, but I'm choosing to go home for a couple of months to visit my cats (I have two and I miss them dearly) and recoup before my next big trip. In this blog post I will talk about one out of the three steps I took beforehand to afford traveling. You can use all of the steps or just one or two depending on your situation and preferences. The first strategy I used was to save money for a year.
Start Saving Six Months to a Year in Advance
If you have the urge to jump on a plane next month, then I absolutely approve. However, you have to be prepared to either deal with a larger credit card bill when you return or burn through savings that wasn't originally designated for traveling. However, neither of these are the end of the world and both are valid options if you want to travel. That being said, optimally you want to start saving money up for a trip six months to a year in advance. This takes a lot of the burden away as you can save a small amount each month without feeling the pinch. Keep in mind that you do need some liquid cash on hand to travel, especially in Asian countries as a lot of places take credit, but you'll run into plenty of cash-only situations.
I started saving the summer before we planned to travel to Asia. I set a goal for myself--save $500 each month until I reach $5000 to put away for traveling. I simply made it a priority and was able to stick to it for 6 months before my tax bill came and I had to deal with that (as a freelancer, taxes especially suck). I didn't reach my $5,000 goal, but I still saved $3,000. Now this was just a number that I decided I wanted to reach and in retrospect it was too much. You can comfortably travel with far less than that amount, especially by using my strategies. In fact, even just saving $1,500 or $1,000 will get you far in terms of needed cash.
My recommendation: If you can, start a year in advance. If not, then start as soon as possible.
Factor in the following to come the amount you want to strive for.
- airplane/transportation costs
- average cost of nightly accommodations multiplied by the number of days you want to travel (To find average cost of accommodations, look through TripAdvisor and Airbnb for the average price of accommodations you would feel comfortable in throughout the places you want to travel to.)
- daily spending budget multiplied by the number of days you want to travel
Now that you have your number-- an estimate of how much money you need to travel, you need to factor in two things-- your credit score and your monetary discipline (how disciplined you are at repaying debt, paying off credit cards, not overspending). Take a look at which category you fall into:
Good Credit Score X Very Disciplined : You only need to save a third to a half of your travel costs
Good Credit Score X Low Discipline: You should only rely on credit cards for a third of your travel costs at most
Low Credit Score No Matter Your Discipline Level: You're better off saving your entire estimated travel costs or looking at my third strategy (getting paid while traveling)
If you have a good credit score and can honestly say you're monetarily disciplined, you really only need to save a third of your travel costs. (Ex: if your travel costs are $3,000, you need to save $1,000). However, this is only the case if you pay your credit card bills on time every month and that you can trust yourself to not overspend when abroad by budgeting wisely. If not, then simply save more money on the onset.
Anyway, take your total estimated travel costs and either thirds, halves it or leave it as is depending on your situation. Once you do this, divide the amount by the number of months you have left until you plan to travel and voilà you have the amount of money you should save per month to go towards your travel budget.
Example: I determine that my total costs will be $3,000. I have good credit and high discipline so I divide it by 3. I have 10 months until I want to travel-- I need to save $100 a month. Very doable no?
That's it for my first strategy to afford traveling. It's a myth that traveling is hard to do or takes a lot of work. Just like with everything, if you want to do it--you will! I'll be writing about my second and third strategy in the next couple of days so make sure to subscribe and stay tuned!