Saving money is undeniably one of the hardest parts of planning a long-term trip. When you have months, even years ahead of you to organize your finances in a way that allows you to save enough money before leaving, having a plan is key.
One thing you should know is that before we started our planning, we both had $0 in our savings accounts and were thousands of dollars in debt. After paying the debt down, we began working towards our goal of $20,000 - the amount of money that we felt safe leaving with so that we could start our adventure with peace of mind.
Two things contributed to us being able to do all of this in well under a year:
- Getting new jobs that allowed us to bring home a combined annual salary of a little over six figures. Check down below for a breakdown of our expenses!
Most importantly, however, was following the tips down below, which allowed us to save just about 40% of our combined salaries.
Regardless of what your income is, we’re sure that if you take the tips below and apply them, you’ll be experiencing freedom much sooner than you’d expect.
These were the 7 key points in making our plan successful:
1. Pay off debt and use the “right” credit cards
After eliminating our credit card debt, we then stuck to only using the money that we really had. However, instead of paying with cash or a debit card, we paid for everything with credit cards that offered travel rewards, and then immediately pay those cards off after the fact. This not only made us debt-free, but in a few months we were able to accumulate approximately $4,000 dollars to spend on our trip. We'll be posting an article on the best credit cards for traveling soon!
2. Save a Paycheck
This tip only only applies to couples, but finding a way to save an entire salary and living just on the other, we were able to put away almost 40% of our combined income every month. Automatically transferring an entire paycheck every two weeks was really difficult, but by far one of the best decisions we made early on in preparing for our adventure. If you're unable to set aside an entire paycheck, set aside an amount that is slightly outside of your comfort zone and find a way to stick to it.
3. Sell your car
If there’s one thing I wish I would’ve done sooner, it’s to have sold my car. This alone saved us around $500 per month. Use public transportation, carpool, or bike whenever possible and share a car if you’re a couple. Also, consider moving out of your apartment/house and living with a family member for a few months. (This wasn’t an option for us, unfortunately.) It may not be the most comfortable experience, but your bank account will definitely appreciate it!
4. Sell things you won't be needing
We all have things that we haven't used in months – maybe even years – laying around the house. Lots of these things still hold value and can be sold for a good amount of money if you just attempt to sell them. Furniture, electronics, decorations... anything. We took stock of the things we had in the house and once we were on our way out, we were able to make $1,500 dollars by selling things on Craigslist and Facebook Marketplace. Lastly, we also donated a lot of books and clothing so others could get use out of the things we no longer needed.
5. Stick to a budget
Plan, plan, plan. Set a weekly or biweekly budget for each one of your expenses and do not make any exceptions. Temptation is normal. It’s normal to be tempted while buying groceries and feeling the sudden urge to take home a gallon of cookie dough ice cream or a bottle of sparkling wine. But you don't really need it. Your bank account and body will appreciate this too! Stick to your list and don't go over budget.
Choose cheap restaurants to eat at on the weekends, or try cooking new recipes at home and inviting your friends over. Do only what your budget allows you to do. For example, we went from easily spending $300 per weekend, to limiting ourselves to $100 per weekend. During the last few months, we had cut it down to $50. You could cut this expense altogether; in our case, we decided that to stay sane we would need to treat ourselves at the end of each week.
These simple changes will make your savings grow much faster than you can imagine!
6. Cut extra expenses
We cut three larger expenses that we determined were draining our funds much too quickly: buying unnecessary electronics, weekend getaways, and dance lessons. Smaller things help too, like making and bringing your own lunch to work everyday, skipping theater visits, or exercising at home or outdoors. Searching for alternatives and making a few temporary sacrifices could end up saving you tons of money in the long run.
7. Learn to say NO
Declining invitations from friends and family is never fun nor does it feel good, but it’s a really important step. Don’t let yourself be influenced to do something that is outside of your budget. Talk with your friends/family and ask for their support – making plans at home can be just as good as going out! The people you spend your time with is what really matters.
It’s all about priorities.
Analyze yours and create your own list. Decide which sacrifices you are willing to make. Everybody’s situation is different in a number of ways, so take a look at your income and budget accordingly to make it work. Or even consider looking for a new job that pays more! Always keep your goal in mind – when your purpose is in sight, it is much easier to make necessary sacrifices.
*Here’s more detail on what our monthly expenses looked like.
Car loans: $550
Car insurance: $250
Going out: $240
Student loans: $190
Phone bill: $120
Miscellaneous expenses: $150
Total: $2990 per month
Pay our cars off: $6,000
Credit cards: approximately $10,000
Medical bills: $1,500
Purchases for our trip:
Travel Insurance (1 year): $2,300
Initial flight tickets (4 one-way tickets, total): $700
Photography gear + laptop: $4,000
During our first year in Southeast Asia, we're projecting our expenses to be $1,500 per month, which amounts to $16,500 after 11 months.
We hope these tips are as helpful for you as they were for us!