So you want to see the world? A guide to saving for long-term travel
Unless you have a trust fund or just won the lottery, your bank account balance is probably the main reason long-term travel seems like an impossible dream right now.
We've been there. It took us five years — with each of us juggling three jobs — to be in a position to backpack around Latin America.
But don’t worry, it may not take that long for you. Although it took us a while to reach our goal, once we made a conscious effort to rethink our values and prioritize our spending habits, we were able to save at a much quicker pace. If we had adopted the ideas listed below sooner, we may have gotten an earlier start on our journey.
Deep down, what was driving us to travel was a desire to live more freely. The more things we accumulated, the more we felt anchored down. The car payments, the cluttered apartment, the closet full of clothes. It nagged at us. All of this seemed like unnecessary distractions. By minimizing our possessions to that which could only fit in a backpack, we could liberate ourselves from a thousand small burdens.
We realized that happiness lies in the experiences — not the things — we have.
So we looked at what we had and decided to only keep the items that were absolutely necessary in our life. Moving out of our more expensive apartment, we were lucky enough to find a room in a communal house with some friends. Sharing a common space allowed us to split utilities and divvy up household chores. We realized we didn’t actually need our car and opted for biking, walking, and public transportation instead. Without needing insurance or gas money, we started to see our savings add up.
It was also the small things. Cooking at home with each other and friends became a routine way to catch up and eat a healthy meal. We vowed to only buy things we absolutely needed. Soon we found that we were less stressed by bills; we had more time to enjoy with people we love; and we were happier without all the clutter. Not only was this a great exercise in saving for our travels, but it prepared us for life on the road.
If we can enjoy a simple dinner, entertain ourselves taking a walk in the park, and laugh with friends over homemade cocktails, we will be happy wherever our travels take us. Learning to live without spending much money has been the key. As one of our fellow travelers says, "A five hundred dollar watch tells the same time as a five dollar watch."
So here are some of our tips to help get you from your desk to your departure gate.
Priority: Pay off all debt
Like many people our age in the US, we started with negative amounts in our bank account due to student loans. While it was tempting to make the minimum monthly payments, we knew interest would add up and we'd be paying even more in the long run. We looked at our monthly expenses and decided to start making automatic payments three times the monthly minimum, which was the most we were able to make at the time without cutting into expenses like rent. Whatever kind of debt you may have, pay it off aggressively. Your bank account will thank you in the long run and you really can't leave long-term with expenses like that hanging over your head. Plus, since we'd gotten so used to living without that extra money every month, once the debt was paid off, it was easy to continue depositing what would have gone to paying the loans into a savings account for our trip.
Set a savings goal
Once you've decided on your dream journey, you'll need to decide on a few parameters and crunch some numbers. Where in the world do you want to go? How long are you able to travel? What's your travel style? How much do things like transportation, food, and lodging generally cost there? When you return home, will you have a job or are you going to need some money to hold you over as you re-enter the job market? Once you have a goal, you can figure out how much you can save each month and how long it will take to reach your goal.
Study your expenses
While definitely not the most romantic way to spend an evening, we've made a regular habit of grabbing a (cheap) bottle of wine and looking over our monthly expenses. Everything is sorted into categories so we can see exactly how much we spent on things like alcohol and eating out. If we see a little too much going to a category that's unnecessary, we talk about how to correct it for the future. By checking in on our expenses regularly, we're able to hold ourselves accountable and make changes so we can start saving more as soon as possible.
Make your money work for you
One of our earlier mistakes was using a bank account that generated no interest. Our money was sitting in an account and actually losing value each year because of inflation. So we shopped around and found a bank that not only earns us a little interest, but matches our needs and values as well. We really like Aspiration Bank. It's an online bank that reinvests in projects we care about, earns 1% interest with no minimum balance, and has no ATM or maintenance fees.
Find a side hustle
For five years, we each had a main job and two side gigs because starting a nonprofit left us no other option to make ends meet than to pick up some other work. We were lucky to have friends who needed help in their office, and we both had skills like speaking another language that allowed us to teach and tutor. If you have some extra time, see where you can earn a little more to put into your travel savings account.
Our philosophy is that if we can do it ourselves, then we do it. We almost exclusively cook yummy, healthy, vegetarian meals at home. So far we haven't met a city we wouldn't walk across. Instead of hanging out at a bar, we invite friends over for drinks.
(Once, Rebecca even performed minor home surgery on Jared's ear. We do not endorse this, but we could write a book about how screwed the US healthcare system is. Plus, Rebecca is a wannabe surgeon and has a lot of confidence in her skills.)
Not only does it save us a ton of money, but we learn skills like how to cook amazing seasonal dishes and make tasty cocktails. And we have lots of stories from traversing metropolises and performing home surgery.
The sharing economy
As millennials, this is more of a given than a choice, but because the infrastructure exists to share anything from cars to gardening tools with an app at our fingertips, we make full use of it. By living communally, we didn't have to purchase expensive kitchen appliances or living room furniture. Borrowing is usually far preferable to buying if you are planning to travel long-term. Not only does it save you money that can go towards your trip, but you also will be spared the nightmare of trying to store an entire apartment's worth of possessions.