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Finding the money to travel can sometimes be difficult with bills to pay and an everyday life to live. But by having a budget plan and making a few minor changes to your life you will be saving money in no time.
How Long Do You Have to Save
Firstly, go back to that travel budget that you created earlier and make a note of the rough total cost of your holiday. Remember that this is just a rough estimate at this stage and may increase or decrease over time. Because of this it’s a good idea to keep referring back to this budget every few weeks and evaluating your savings plan.
By now you have probably also figured out when you want to go. Calculate the number of pay days you have between now and when you plan to leave. If you get paid weekly, then it’s the number of weeks, or for monthly, the number of months and so on.
Creating a Simple Personal Budget
Next you need to figure out your personal budget so you can decide how much you can afford to save and whether your goal of travelling in x amount of month’s time is realistic or whether you need to make some adjustments to your time frame or your lifestyle.
To help you out with this, I’ve put together a Simple Personal Budget Spreadsheet which you can download for free by clicking the link. I’ve also included a screenshot below of a completed sample.
Adjust the heading according to the frequency of your regular income. Then input the amount of that regular income in the field on the right of Total Income.
Next you need to calculate your expenses. Think about how much you usually spend each income period on all of the fields in the spreadsheet and any other expenses that you may have. Input all of the figures in the field on the right each expense type and the Total figure at the bottom will calculate automatically for you.
This figure will hopefully not have a minus sign in front of it. If it does you may need to make some adjustments so that you are not spending above your means and creating more credit card debt for yourself.
If there is no minus and the figure isn’t zero then that is potentially how much you can save each income period to go towards your holiday. In the example above you would be saving $500.00 per fortnight. If you were planning to travel in 3 month’s time then you would have six fortnights until your holiday and would be saving $3,000.00 total. If this isn’t enough to cover your holiday expenses then you may need to do one of the following:
- Change your departure date to a date further in the future. Using the above example, if you needed $5,000.00 for your holiday then you would have to extend your departure date by about two months to make up that extra $2,000.00.
- Go back and adjust your travel budget. Think about some areas where you might be able to save a bit of money. Maybe you can stay in three star hotels instead of 4 star or try having picnic lunches with items bought from the local market.
- Make some adjustments to your lifestyle to be able to meet your goal of saving $5,000.00 in three months and still being able to travel at the time you originally wanted.
If you chose one of the first two options then all you need to do now is concentrate on trying to stick to that budget and putting those savings away each income period. I suggest, at least for the first few weeks, to keep track of what you spend, writing done everything you spend to ensure that your budget is achievable and that you are staying within the limits.
If however, you chose the third option then read on for my tips on how to make cuts to each type of expense in the budget spreadsheet.
Making Cuts to Your Budget
This is most likely going to be your biggest expense each income period, unless of course you live with your parents or your one of the lucky few who completely owns their own home.
If you currently have a mortgage then you can try speaking with your bank or mortgage broker about ways of reducing your repayments. Maybe you’re currently on a fixed term interest rate which is higher than the variable rate and you have the option to switch for a few months to save a bit of money. Or there could even be the option of refinancing and finding a better deal.
For those who are renting, you can look at downsizing to a smaller house or apartment that has cheaper rent if that suits your current situation or moving to a different area that has a similar sized apartment or house for cheaper rent.
Whether you own your home or rent, you can always look at moving in with your parents or other family member for a few months and renting out your home or letting go of your lease. This option is especially good if your trip is going to be a big trip of 6 months or more. Not only will you save money on rent but you can probably sell a lot of your unwanted furniture to help boost those savings.
How much do you really need that car? Think about it. If you live in a major city with sufficient public transport which you use to get to and from work and only use your car once or twice at weekends, do you really that car? Think of the saving you could be making on insurance, servicing, mechanical repairs and gas.
Another way to save money on transport is to walk more. If you’re just travelling a short distance and it’s a nice day, why not walk rather than getting in the car or paying for public transport.
I’m not sure about where you live, but in Australia the cost of electricity has been rising quite dramatically over the last 10 years. I find that it’s always a shock when that electricity, water or gas bill arrives in the mail.
The best way to save money here is by being more conscious of how you are using each utility. For electricity you can try turning things off more often like lights, computers and using the clothes dryer less. For water, try cutting your daily shower by as little as 30 seconds and if you have a garden, having a bucket in the shower to catch the used water to use on the garden. And for gas, if it’s used for your hot water system then the same goes for the showers.
These simple actions could potentially save you a few hundred dollars in a few months if you really try to be conscious of what you’re doing.
Just about everything that falls into this category is not a necessity. But in this mobile world we live in now, it’s hard not to have some type of mobile device.
Have a think about how you use your mobile devices, like your mobile phone and tablets. Can you get a better deal on your plan or would a pre-paid option be easier for you manage and save money. Visit your service provider and tell them you want a better deal or you will start shopping around. Nine times out of ten they will do whatever they can to keep your business and save you money.
I’m very much against cable television, especially these days when everything you could possible want to watch is available to be downloaded off the internet. If it isn’t going to cost you any penalties to cancel or downgrade your subscription then give it a go and I guarantee after a few months you won’t even miss it.
This is another big regular cost which is virtually unavoidable but there are ways you can save money.
Try shopping at a cheaper supermarket. Here in Australia we have Aldi which is our cheapest and sells virtually the same things as any other supermarket except without the brands. Or just continue to shop in your local supermarket but be more conscious about buying no name brands that cost less. A bag of dry pasta for example is about $2.50 for the brand name here in Australia but the no name brand in the same size bag costs only about $1.00. That’s a big saving.
Also having a shopping list with you and sticking to it when you’re shopping will ensure you’re not reaching for the premium items like chips, chocolate and ice cream that bring that final bill up. Plan your meals for the week before you go to the shops and only buy what you need.
Saving money on your health shouldn’t be the first place you start to look for savings as I believe it’s important to be covered and well looked after in times of sickness. But there are a few simple ways you can find small savings with your medical expenses.
When getting your prescriptions filled ask if there is a cheaper, generic brand that you can have that will cost you a few dollars less. This is especially good if you are taking a lot of medication.
If you have private health insurance, do some shopping around to see if you can get a better deal or possibly look at reducing your cover if the circumstances are right for you. If you are young, healthy and fit, do you really need a high level of insurance that will cover you for a hip replacement? (Disclaimer: This is not advice, rather a suggestion of something to think about and consult with a professional.)
Dining & Entertainment
The amount of money you spend on your social life is really entirely up to each individual and how social they like to live their lives. I personally try to limit my meals out to once a week when I can help it but I wouldn’t say no to invitations based on the fact that I have already been out once that week. I’m a big believer in still being able to have a social life while saving for your goals.
If you are social like me, there are a few ways you can cut these costs down a bit like having friends over for a dinner party with everyone bringing a dish to share, eating out at less expensive places or going to restaurants that let you bring your own wine.
You can also join free websites like GroupOn or Living Social that offer daily deals for meals out, shows, massages, you name it they have had a deal for it in the past. Or become a member of your local cinema and you might be able to get a free or cheap movie once in a while.
These days, I don’t think I know anyone who doesn’t have a least a tiny bit of debt whether it be an old student loan or the dreaded credit card debt. The best way to save money here is to not use a credit card at all, but for most people that isn’t always possible.
If you have a large amount of debt it might be worth speaking with a financial planner about ways you can consolidate that debt and make the repayments more manageable for you.
If you must have a credit card, shop around for one that offers a low interest rate with at least 30 days interest free and is either low in fees or fee free. Another thing to look at with credit cards is the ones connected to rewards programs. Collecting points or miles for your spending could be earning you valuable points that you can cash in for flights, accommodation or activities on that upcoming holiday.
Over to you!
What are your tips for saving money to travel faster?
Let us know using the comments section below or join us on social media to start a conversation.
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