Take out a sheet of paper and write down all your fixed expenses: rent/mortgage, car payments, cable/streaming bill, cell phone, insurance, school payments, etc. Count them.
Then write down all your discretionary expenses. This is what you spend on food, movie nights, drinks, groceries, daily Starbucks coffee, cigarettes, sports tickets, your daily lunch snack, and the like. If you don’t know what you are spending money on, go and track your spending for two weeks, see what you are spending, and come back.
Add it all up – what did you get? Probably a lot of money.
And I bet there will be a lot of expenses you didn’t realize existed. Financial experts call them “phantom expenses” – you never know if they’re there because the expenses are so small. People lose money without realizing it. Even a bottle of water or a bar of chocolate a day can make a big difference in a year.
What does this have to do with travel?
One of the main reasons you think you can’t travel the world is because of money. Most of us certainly have expenses that we can’t reduce (but remember that when you travel the world on a long-term basis, many of these expenses disappear), but if we cut our phantom expenses, reduce our fixed costs and find other ways to save, we can build up our travel fund much faster.
In short, if you want to start traveling more or saving for a specific trip, you need to create a budget. This will allow you to see where you can save and where every penny you earn is spent.
By reducing your daily expenses, being more economical and adopting a simpler lifestyle, you will be able to save for your trip around the world without having to find additional sources of income. I know that these tips work because I used them before my first trip around the world (and I still use them to keep my living expenses down).
Of course, the lower your income, the longer it will take you to save enough to travel. But longer doesn’t mean never. A little every day is a lot over a long period of time.
Here are some simple and creative ways to reduce your expenses, earn money, and get on the road sooner:
Track your expenses
As mentioned in the introduction, most people do not have a budget. So the first thing you can do to save money is to know where you’re spending it. At a time when you’re typing on an app and a car is coming, it’s easy to forget about what you’re spending. Create a spreadsheet or use a service like Mint and keep track of all your spending. You’ll probably be surprised to see where your money goes once you start paying.
Open a separate bank account
Financial experts have been recommending it for a long time. Create a separate bank account and have money automatically deposited into it every pay cycle. No matter how much money you deposit, putting that money in a separate bank account means it will not be spent and you will not overspend. Think of it as a piggy bank. Don’t raid it. It is your travel fund.
Cut the coffee
Do you like your Starbucks? Well, Starbucks loves your money. Coffee is a daily expense that quietly drains your bank account without you noticing. That $5 a day coffee costs you $150 a month. At $1,800 a year, that’s two months in Southeast Asia.
Of course, giving up your cup of coffee seems to be a “duh” thing. And, yes, the time saved by buying one is useful. Under normal circumstances, this would be a “small week” financial advice that is not worth the time and effort.
But, for now, you have a travel goal to reach and every penny counts.
Learn to cook
To reduce your food bill, cook more often. I learned how to cook in university (a skill that has always been part of my life).
helped since) and before leaving on my first trip, I reduced my restaurant outings to twice a week. Every other meal I prepared myself. The next day, I saved the leftovers from dinner for lunch, which saved me more money.
You don’t have to be a cooking genius either. There are a million and a half cooking sites, YouTube videos and recipe blogs that will teach you how to cook quick and healthy meals. I never spend more than 20-30 minutes preparing a meal.
Losing the car
Between insurance, repairs, loan repayments and filling up the tank, cars are very expensive. Get rid of your car if you can. Learn to enjoy the bus, subway, biking or walking. You may need more time to get to work using public transportation, but you can use that time to plan your trip, read, write or do other productive tasks.
I understand that this advice does not apply to everyone, especially in small towns that don’t have an extensive public transportation system, but an alternative is to sell your car and buy a cheaper used one, which you will only need until you leave for your trip. Buying a disposable car will allow you to pocket the money from your more expensive car and spend it on your trips.
In addition, with the proliferation of carpooling services (Uber, Lyft and others), it has never been easier, even in small towns, to find transportation. Do the math, but it can be cheaper to use Lyft in the city than it is to own a car. (Also, if you need a car for long distances, you can easily rent one).
Save on gas
The gas is adding up! Fortunately, there are many ways to save gas! First of all, use the GasBuddy application to find cheap gas near you. Then, sign up for all the loyalty programs at major gas stations. By default, they save you about 5 cents per gallon. The Shell Fuel Rewards program is the best because you’ve combined it with a restoration program that saves you up to 50 cents per gallon. Plus, use the GasBuddy credit card, which can be linked to any of these loyalty programs and saves an additional 25 cents per gallon. Most supermarkets also have loyalty programs that save money on gas. And if you sign up with Costco, you can save a lot of money too.
In the age of Hulu and free (and legal) streaming television, there’s no reason for you to spend US$50 a month on cable TV. Get rid of it and watch it all
online for free. You can also start sharing your streaming costs with your friends or family. Netflix’s standard rate is $12.99 USD per month. If you can cut this amount in half by sharing it with a friend, you’ll save a few dollars.
Downgrade your phone
The average U.S. phone bill is over $100 per month. That’s crazy! While smartphones are handy devices, getting a cheap phone without any luxury apps will cut your monthly phone bill in half (or even more). You might get bored on the train and not be able to read the news, but by saving an extra $600-800 a year, you can spend a few more weeks in Europe, buy more refined meals or learn how to scuba dive in Fiji.
Get a new credit card
After earning miles and reward points with your card on everyday purchases, you can redeem them for free travel. Travel credit cards are an important weapon in the arsenal of the low-budget traveler. You’ll even get huge sign-up bonuses when you receive a new card.
As soon as you decide to travel around the world, get a travel credit card and start earning points on your daily purchases. Here are a few credit cards that are worth checking out:
Chase Sapphire Reserve – The best card on the market, offering 3x points on dining and travel, lounge access and over $300 in travel credit.
Chase Sapphire Preferred – A more affordable version of the Reserve with 2x restaurant and travel points and no foreign transaction fees.
Capital One Venture – An easy-to-use card with $100 credit for entry to more than 10 partner airlines worldwide to which you can transfer points.
Subscribe to Travel Newsletters
No one likes to clutter their inbox, but by subscribing to airline and travel agency mailing lists, you can be informed of any last-minute sales or special offers. Without the American Airlines mailing list, I would have missed a round-trip ticket to Japan for $700 (normally $1,500).
Also, consider subscribing to a website like Scott’s Cheap Flights. They search for offers and send them directly to your inbox – for free! They also offer a premium service with more (and better) offers, but at the very least, sign up for their free newsletter. Chances are you’ll find great offers!
Replace your light bulbs
Electricity costs money, and since every penny counts, using energy-efficient light bulbs will reduce your electricity bills. Fluorescent light bulbs are inexpensive and replacing just five bulbs can reduce your electricity bill by $75 a year. Also, thanks to energy efficiency initiatives in some states, many utilities will give you a rebate if you buy fluorescent light bulbs! Find out about the rebates offered by your local power company, no matter where you live in the world.
By going green, you can save energy!
Buy used light bulbs
Why pay full price when you can pay half? Use websites like Amazon (discount books and electronics), wholesale sites and clearance sales to buy at a discount. Towns and cities, large and small, usually have a thrift store where you can buy clothes and other items – most of them also have regular sales. Most of them also offer regular sales,
you don’t want to buy everything used, but you can certainly buy most things used!
Cut the coupons
Entertainment books, grocery coupons, coupons and loyalty cards all reduce the price you pay at the checkout. Cutting out the coupons may make you feel like an 80-year-old grandmother, but the goal here is to be thrifty and save money, and coupons certainly help.
Many grocery stores also offer electronic coupons based on your buying habits. Sign up for the loyalty program at your local grocery store and you’ll be able to reduce your weekly grocery bill with discounts sent by email or added directly to your loyalty card. Here are a few discount and coupon sites worth checking out:
Sell your products
Before starting a long trip, I looked in my apartment and saw many things I didn’t need anymore: TVs, sofas, tables, channels, etc. I was very happy to see that I had a lot of things I didn’t need anymore.
stereo. Instead of storing them (which costs money), I decided to get rid of everything. I sold everything and used the money to travel. After all, I won’t need my couch anymore to eat pasta in Rome!
Sites like Craigslist, Amazon and Gumtree are great places to sell your useless consumer goods.
If you have a ton of stuff to sell, consider having a yard sale. It’s the fastest way to empty your house and earn a few dollars at the same time.
Skip the movies
I don’t know about you, but I find films ridiculously expensive. A ticket can cost up to $20, and even more for popcorn and soda. Cut the movies or rent them online via Netflix or iTunes. No matter what you do, by cutting out the movies, you’ll save a bundle.
If you want to go to a movie once in a while, go to the cheap movie night (most theaters have one) and sign up for their loyalty program to win free movies.
Stop drinking alcohol
Alcohol is expensive. Reducing the amount of alcohol you consume will have a significant impact on your budget. This may not apply to everyone, but those of you who are carefree can go out with your friends at the weekend. Drink before you go to the bar or just don’t drink at all. Reducing the amount of alcohol you drink is considered an easy way to save money.
Smoking not only kills you, but also your wallet. A pack of 10 USD per day is equivalent to 3,650 USD per year. Even half of this amount would earn enough money for almost two months in Central America. If you don’t want to quit smoking for your health, do it for your trip.
A snack here and there not only adds calories to your waistline but also empties your wallet – another example of phantom spending. We don’t think about them much because they cost so little, but they build up over time and add to our savings. Eat fuller meals at lunch and dinner and avoid snacks.
If you want to snack, bring snacks from home and plan ahead. That way, you can buy cheaper (and healthier) snacks and avoid buying chips, chocolate bars and other expensive items.
Buy a reusable water bottle
Single-use water bottles are not only harmful to the environment, but also to your wallet. One or two bottles of water per day at $1 per bottle will bring you at least $30 per month. That’s 360 USD per year! You can spend a week in France with that much money!
Instead of using plastic, buy a reusable water bottle and fill it with tap water. You’ll want one for your trip anyway, so buy one now and get into the habit of using it. I like the lifestraw because it also has a water filter.
But the most important thing you can do is to keep track of your expenses, because everyone’s situation is different. For me, the biggest “Wow! I can’t believe I’m spending money on this” were Lyft and the scooters. Hundreds of dollars a month were being wasted even though I realized it.
Keep track of your spending so you can continue to reduce discretionary spending. And keep this list in mind so you can always remember what you need to cut to save for your travel!