Peeps, todays blog is the first part of my low budget travel series or put in other words: The secret to travel the world with little money. This first article is about how to save enough money to travel. In a second blogpost I will talk about smart choices that you can make while you are on your trip. I will try to give you a basic idea of the possibilities you have while you are on a low budget and still make the most of your adventure!
Thinking about my own spendings and writing them all down, I realized that there are many expenses I didn’t know were there. Financial experts call these “phantom expenses” — You never know they are there because the expenses are so small. A dollar here and a dollar there adds up. Even a daily bottle of water or cup of coffee can make a substantial difference over the course of a year.
What does this have to do with travel? One of the main reasons why you think you can’t travel the world is money. “I can’t afford it,” people say, “I have too many expenses.” I am sure you have expenses you can’t cut, but if you cut your phantom expenses, reduce your set costs, and find other ways to save you can build your travel fund much more quickly.
No matter how cheap you want to be, travel requires some money. There’s no way to avoid that, so in order to save for your trips, you need to cut your expenses and learn how to safe money. Here are some simple and creative ways to cut your expenses, make money, and get on the road sooner.
1. Cut the coffee
Coffee is a daily expense that quietly drains your bank account without you ever noticing. That daily $3 coffee costs you $93 per month. At $1,116 per year, that’s more than a month in Asia. Give up the coffee, switch from cappuccino to a standard brew, start drinking tea, or brew your own cup. This is an easy, low-hanging-fruit expense that can yield big savings right away. You meet friends at Starbucks a few times a week? Replace those meetings with a pleasant stroll or an at-home kaffeeklatsch. You don’t have to give up good times—you just have to re-imagine them.
2. Stop drinking
I know it seems drastic. But alcohol is expensive. Cutting down the amount you drink is going to have a big impact on your budget. While this might not apply to everyone, those of you who are carefree might go out with your friends on the weekend. Drink before you go out to the bar or simply don’t drink at all. Cutting down the amount of alcohol you consume is considered low-hanging fruit — an easy way to save money.
3. Quit smoking
Smoking kills not only you, but also your wallet. A $10 pack per day amounts to $3,650 per year. Even half that amount would still yield enough money for close to two months in Central America. If you don’t want to stop smoking for your health, do it for your next adventure.
5. Stop snacking
A snack here and there not only adds calories to your waistline but also empties your wallet — another example of „phantom expenses“. We don’t think much of them because they cost so little, but they add up over time and eat into our savings. Eat fuller meals during lunch and dinner and avoid the snacks.
6. Buy a metal water bottle
Plastic water bottles are not only harmful to the environment, they are also harmful to your wallet. One or two water bottles a day at $1 per bottle will add up to at least $30 a month. That’s $360 a year! You can spend a week in France with that much money! Instead of plastic, buy a metal water bottle and fill it with tap water.
7. Replace your light bulbs
Seriously! Electricity costs money and since every penny counts, using energy-efficient light bulbs will cut down on your utility bills. Fluorescent light bulbs now cost as little as $2.50 USD for a pack of two, and replacing just five bulbs can cut $75 per year off your electric bill. Go green!
8. Buy second-hand
Why pay full price when you can pay half? Use websites like Amazon, wholesale websites, and clearance sales to buy at discount. Same goes for clothes. Thrift-stores make your money stretches much farther. On average, used products are generally 50% cheaper – allowing you to save money for other important expenditures.
9. Reduce the spending on entertainment
It can be easy to be peer pressured into unnecessary spending if your social group spends its time at expensive bars and other venues. Instead of dropping your friends, start suggesting or planning lower cost get-togethers. Have a movie night at your house instead of the theater. Host a casual potluck instead of catching up at an expensive restaurant. I don’t know about you, but I find movies ridiculously expensive. Cut out the movies or watch them online via Netflix ($7.99 per month) or iTunes ($1.99). Whatever you do, cutting out trips to the movies will save you a bundle.
10. Evaluate your subscription services
Cancel anything you don’t use enough to be worth the cost. In the age of high speed Internet, an easy thing for most people to eliminate is cable television. Video game subscriptions, beauty boxes, and magazines are other expenses that may seem small but add up over time.
11. Quit the gym
One great way to save money is to cancel your gym membership, or, if you don’t have one, don’t get one. Your membership at a gym can be very expensive. Typical memberships run between $30 and $70 per month. That works out to be an annual savings of between $360 and $840 if you cancel that membership.
But don´t worry, there are a billion ways for you to still get that workout in! Just use a little imagination. Take a look at your surroundings. Start off with a good walk, or run if you prefer, around the block or up and down the road. Your self-guided workout is limited, really, only by your imagination.
My recommendations for your free workout:
- Use free apps like N+TC Nike Training Club App for your home work and get into body weigh training with the Freeletics app at no cost
- Try a free yoga class and challenge yourself with „Yoga with Adriene“ on You Tube
- Find outdoor workout groups online, for example through Facebook
- And of course: run, run, run. You can do it nearly anywhere and all you need is a good pair of shoes
12. Lose the car
Cars are crazy expensive to own, between insurance, repairs, loan payments, and filling your tank with gas (current average price of gas: $3 USD per gallon). Get rid of your car if you can. Learn to love the bus, take the subway, bike, or walk. It might take longer to get to work using public transportation and this tip may not be feasible for everyone, especially those in smaller 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 throwaway car will allow you to pocket the money from your more expensive car and put it toward your travels.
13. And one for the girls
Sick of spending money on hygiene products every month? Menstrual cups are a great solution that will save you money throughout your menstrual lifetime. One menstrual cup can last for up to 10 years, so you no longer need to stock up on tampons and pads each month. A menstrual cup is a one-off investment that will see you through each month – lasting for many periods, over many years. Just think of all the things you can spend that extra cash on!
14. Learn to cook
We all need to eat, but depending on where you are based, restaurants are getting quite expensive these days. Many people overspend by eating out often, especially when it comes to lunches at work. Even if you would only spend $5 a work day on lunch, you would end up with a sum of $100 per month and $1200 per year. If you resolve to prepare a majority of your meals at home, you will be able to save quite a bit of money each month.
What I do is saving the leftovers from dinner for lunch the next day, thus saving more money. You don’t need to be a whiz in the kitchen, either. There are a million and one cooking sites that will teach you how to cook fast and healthy meals. The recipes on this blog are all created in my student low budget kitchen, thus perfect for the small purse. Again, to keep your food bill low, cook more often.
15. Save in the supermarket
Instead of sticking by a brand or making a traditional shopping list, buy items as they go on sale for the best deals. While the savings of buying sales items in bulk may be tempting, only purchase what you can safely store or consume quickly. Always pick the item with the lowest cost per unit. If you don’t want to do the math yourself, many grocery stores will even list the cost per unit next to the item.
16. Cut coupons
The Entertainment Book, grocery coupons, Groupon, and loyalty cards all reduce the price you pay at the register. Clipping coupons might make you feel like an 80-year-old grandmother, but the goal here is to save money, and coupons definitely help with that.
17. Buy produce at farmers markets
I also recommend you to check out local farmers markets. They often have great prices for high quality produce. Get to know the producers or salespeople and enjoying the great deals that can come from such a relationship. Also, agricultural products are more expensive early or late in the season. If everyone at a market has a particular product, the price will drop, but if only one vendor has an item, he or she can set the price individually. To save big cash, buy products at the peak of their season. If you show up to the market right before closing time you will most likely get great deals.
My friend Connie wrote a great article about her experiment on living with 3 € a day! Go and check it out here.
18. Find a roommate and rent out or sublet extra space
You’ll see a huge gain in your savings by lowering your housing costs. Downsize your apartment or bring in some roommates. Consider to move back in with your parents for the last months before a bigger trip. This might safe you a couple thousand bucks! If this is not an option for you, bring in a roommate. Turn that living room into a spare room if necessary. In NYC, people turn living rooms into bedrooms and studio apartments into two bedrooms by putting a folding screen in the middle of the room. It’s not the most ideal living situation, but it does save money and could potentially net your hundreds of dollars to put towards your savings.
Are you going on a long business trip or vacation? Consider short term renters while you’re away. Alternatively, if you live in a city like Austin or San Diego that has annual events that draw huge crowds, you may choose to stay with a friend and rent out your place for its duration at extremely high rates using platforms like Airbnb.
19. Get rid of cable
In the age of streaming TV, there’s no reason for you to be spending $50 per month on cable television. Get rid of it and just watch everything online for free or use Netflix!
20. Ditch your landline
I honestly know less than 10 people under 30 these days who have anything other than a mobile phone. You don’t need both a mobile phone and a landline. Ditch your phone line and avoid doubling your phone expenses.
21. Downgrade your phone
Having an iPhone costs about $83 per month. While smartphones are handy devices, getting a cheap phone without any fancy apps will cut your monthly phone bill in half. You might get bored on the train not being able to read the news, but saving an extra $500 a year will allow you to spend a few more weeks in Europe.
22. Open an online savings account and pay yourself first
While saving, you can have your money grow a little bit more by putting it in a high-yield online savings account. One of the best saving strategies is to pay yourself first. What this means is that you designate a certain amount of your paycheque as your pay and you pay that money to yourself before you pay your bills. It can be any amount that you decide. The important part is that you pay yourself first rather than last. Most people pay all of the bills first and then save anything that might be left over. For most people, that method of saving doesn’t really work because nothing is left over to save.
If you pay yourself first, then money will get saved because paying yourself is now your first priority. The nice thing about this method is if your budget is a little tight, it forces you to make adjustments elsewhere and your savings continue to grow.
Paying yourself first also makes sense. Why are you going to work everyday anyway? To earn money for someone else? No way. You go to work to earn money for you and your family. That’s why you should pay yourself first—to make sure that your first priority is taken care of: you. It is not likely that anyone else is going to take care of you because they assume that you are taking care of yourself.
Automate your savings so they’re just like another bill that you must pay every month. After you pay your bills and Pay Yourself First, you can spend the remaining amount of money on whatever you want, guilt-free. This could be as simple as putting $50 per month into your savings account to build your cash cushion. After 12 month you will be surprised to find 1200$ worth of savings ready to be used for your next adventure.
23. Save impulsively
Tempted by an unnecessary purchase? Talk yourself down, then enter the amount of money you might have spent into a free app called ImpulseSave. That money will be transferred into your savings.
24. Found money = fund money
Any unexpected cash (rebate checks, the quarter you
found in a parking lot, etc.) goes into savings.
25. Dollar bill challenge
When you get home from work or running errands, put all the $1 bills from your wallet in a jar.
26. Get a new credit card
A travel credit card can give you free money, free rooms, or free flights. After accruing miles and rewards points with your card on everyday purchases, you can redeem them for free travel on your trip. You’ll even earn huge sign-up bonuses when you get a new card. When used properly, these cards generate free money. Start early. As soon as you decide to travel the world, get a travel-related credit card and begin earning points on your daily purchases.
27. Have a spending plan
The very best method to saving money is to create a Spending Plan or a Budget. With a budget you figure out what your income is and what your expenses are.
So the first thing you should do is to get out a sheet of paper and write down all your set expenses: rent/mortgage, car payments, cable bill, cell phone, insurance, school payments, and the like. Tally them up. Then write down all your discretionary spending. This is what you spend on food, movie nights, drinks, shopping, that daily coffee to go, cigarettes, sports tickets, your daily midday snack, and other similar things.
The secret to this method (if you want to call it that) is to identify what you are spending money on so that you can begin to plan your spending. Once you begin to plan your spending, you will gain control over it and you will be able to plan to spend money on your savings. In other words, you will plan to put money into your savings account. Many people don’t like to plan their spending because it involves a little bit of work (once a year). No one is saying that success will come easily, but this little bit of work will pay off big time in many areas of your finances. We dare you to try it – what have you got to lose?
28. Sell stuff you no longer need
Look around your apartment and notice all the stuff you don’t need anymore: TVs, couches, tables, stereo equipment. Instead of keeping it in storage (which costs money), just get rid of everything. Sell it and use the money to travel. Sites like Craigslist, Amazon and Ebay are excellent places to sell your unneeded consumer goods. Go through old belongings and consider selling things you no longer want or use. Sell big ticket items like furniture instead of throwing them away when you replace them. Sell smaller, easily-shipped goods through online shops or auction sites. Try to sell large, bulky or very inexpensive items locally. Remember that your time in valuable, and it may not be worth the effort of posting a listing and mailing something that sells for a dollar. If you can, pretend any additional income doesn’t exist. Instead of factoring it into your monthly budget, put all of your extra income into savings.
29. Start a side business
Use your free time to start a simple side business, like babysitting and dog walking. If you enjoy making potentially marketable products, try selling your work on a popular craft site. Popular items typically sold include clothing, stuffed animals, beauty products, art prints, and jewelry. Until your savings reaches a comfortable level, avoid starting businesses with large startup costs. Stick to projects that use materials that are inexpensive or you already have available. You are also likely to start spending less. If your Saturday nights become devoted to babysitting, you’ll save money by not going to the movies or running up an expensive bar tab. Sharing economy has made it really easy to earn extra money on the side. You can rent your spare room out on Airbnb, drive with Lyft, cook dinner on EatWith, or lead personalized tours through Vayable. No matter what skill or unused asset you have, there is a moneymaking service for you. Use these websites to boost your trip savings and travel cheaper.
30. And most importantly: Reward yourself
Cutting your daily expenses, being more frugal, and downgrading to a simpler way of living will allow you to save money for your trip around the world without having to find big extra sources of income. But don’t cut out things like entertainment, hobbies, and other indulgences entirely. A happier you will be more productive and make more money in the longterm. Some people have a “swear jar,” putting in a quarter every time they let a choice word fly. But why not a “Yay you!” jar instead? If you decided not to buy an ice-cream cone at the mall, put the cost of the cone the jar. Wait till „Yay you!“ Sunday and give yourself a little treat with the money collected over the week.