How to Save Money to Travel
Last Updated on September 11, 2024
Want to go on an epic round-the-world trip? You don’t need to be earning a 6-digit salary to do that. Here are all my tips on how to save money to travel.
Before I became a travel blogger, saving up was the only way that allowed me to travel.
When I quit my job to travel and blog full-time, I was not rich. I was working as a compliance officer in Singapore and earning around US$2300 a month. But I wanted to travel so badly and I was determined to make it happen…
By transforming my lifestyle and living frugally, I managed to save $12,000 in a year, which allowed me to take a five-month trip to South and Central America.
It required lots of hard work and determination, but it was also extremely rewarding. That year, I learned how to live below my means and earn extra cash on the side. The experience also taught me that I didn’t need much to live on. Since then, I’ve been living frugally and keeping my expenses to a minimum in order to travel more.
Table of Contents
How to Save Money for a Trip
Here are some easy ways to save money for a trip. It doesn’t matter if you’re going for a one-year trip or a two-week holiday. The steps are the same. Just follow through them and I’m sure you’ll be on your way to saving success!
1. Set Your Goal and Budget
First, decide on how much money you’ll need for the trip. This of course depends on where you want to travel and for how long.
I recommend doing a quick research on the general cost of travel in your destination. Find out the approximate cost of accommodation, transport, food, and activities. Don’t forget to consider major expenses such as airfare, gear, and tours. It’s always better to set a higher budget, rather than lowballing it, just to make sure you have enough money to last you through the trip.
For my Latin America trip, I had a vague plan to travel overland from Argentina to Peru, Bolivia, Ecuador and then Guatemala, Mexico and Belize. I budgeted around $2000 a month and we planned to travel for around 4 to 6 months depending on how we felt.
I ended up spending around $1000/month, but extra expenses such as transport and tours (for hard-to-access places like Salar de Uyuni and Macchu Picchu) quickly added up. Having a generous budget like that meant I didn’t need to stress much about money and I could splurge once in a while on nicer accommodation.
Based on my monthly salary of $2300, I decided to save at least $1000 a month. I gave myself one year to save up as Alberto had to finish his Masters degree and we wouldn’t have been able to take off before that. Looking back, I’m glad I had so much time to save up. That meant I didn’t need to be too hard on myself — I managed to save $1000/month and still eat out and party twice a month.
2. Set Up a High-Interest Savings Fund
Once I had a goal in mind, I set up a high-interest savings account for help your travel fund grow. Every month, I would set aside $1000 and transfer that into my high-interest account, which would earn money on its own.
The standard interest rate for normal savings accounts is around 0.1-0.3%, which is very low. But if you get a high-interest savings account, the interest rate can be as high as 0.85-1.3%. Some also offer a bonus rate when at least $20 is deposited each month and several transactions are made each month. Check out Mozo to compare the market for the best interest rates.
I wouldn’t allow myself to touch the savings, unless it was for my travel gear, hotel booking or airfare. After saving $1000 each month, I would have $1300 left to spend, which was really quite a lot considering I had no major bills to pay. I didn’t have a car, nor an apartment to pay for. I wasn’t too hard on myself, I still managed to travel, eat out and go to the bars from time to time.
3. Track Your Expenses
Next, write down ALL of your expenses. A good principle when it comes to money is to always know where you stand. Having a clear grasp on how much money you have, how much you’re bringing in, and how much it costs to keep you alive — allows you to save better.
What are your essential monthly bills? How much do you spend on rent, utilities, insurance, credit card interest, internet and phone service? How about food and transport? Don’t forget to include expenses on eating out, entertainment, dates, and shopping as well.
There are plenty of free spending tracking travel apps out there. Check out Spending Tracker and AndroMoney.
If you actually have more expenses than earnings, then you’re in trouble. Balance transfer credit cards could be an option to get your budget back on track. Some cards — like the MBNA Platinum Plus Mastercard — even offer 0% interest for the first 12 months. Your first goal should be to clear those credit card debts before you can start saving!
4. Trim Away Unnecessary Expenses
Here comes the most important part: It’s time to see what expenses you can trim away. Divide all your expenses into ‘needs’ and ‘wants’ and see what you can eliminate. You’ll need to cut down on extravagant buyings and make some sacrifices here, but trust me, it’ll be worth it.
When I was saving up for my Latin America trip, I changed my lifestyle and it really paid off. I stopped shopping completely and only allowed myself to buy travel-related things or gear for the trip. It felt great and liberating to know that I wasn’t wasting money on useless and unnecessary things.
If you have a car, sell it and use the public transport. If you go to the gym, stop paying for it and do home workouts instead. Ditch cable TV and watch online videos instead. Basically, look at what you’re spending and try to trim it down to the minimum.
5. Change Your Lifestyle
I limited myself to only one nice dinner a week. Instead of eating out everyday (which was common in Singapore), I would pack sandwiches to work and get the cheap $2 chicken rice for dinner.
I cut down on partying with friends. Socialising can be expensive. Instead of going out to party, we had our own parties at home and it was honestly even more fun than hanging out in clubs or bars.
On weekends, Alberto and I chose to do free activities. We went to the beach and explored the green areas of Singapore, instead of going to the cinema or fancy restaurants.
I was also living with my parents in Singapore then, so I didn’t pay any rent and that meant a big saving. I know this is an extreme measure for some of you (in Singapore, it’s common to live with parents even as adults). For those of you don’t want to consider the option of moving home, I recommend looking for a roommate to share your apartment with, or moving to a smaller place in a cheaper neighborhood.
There was one thing I didn’t stop: traveling. I still continued to travel that year, but limited myself to short weekend trips or road trips to nearby places. It’s important to evaluate what your priority is and what makes you happy. If you love eating out for instance, then don’t eliminate that completely — just limit it to once or twice a week.
6. Earn Extra Money
If you have an average income like I did, consider taking on part time work or freelance gigs to supplement your income. This isn’t for everyone though; you’ll need to have the time and commitment to work two jobs at a time. But it’ll definitely help you reach your saving goal faster.
I started this travel blog about a year before my Latin America trip, with the goal of journaling my travels and also get a foot into the world of travel writing. I then spent all my free time researching online and learning how to pitch magazines and travel websites.
In three months, I landed my first writing gig for Matador Network. Soon I was receiving writing gigs from magazines in Singapore and regular assignments from travel websites like Bootsnall. At the same time, I started making some money from selling advertising on my blog. Before my trip, I was making around $200-550 a month from my blog and freelance writing.
So how did I find the time to write? Everyday after work, I would dash home, have a quick dinner and start working on my laptop. I usually worked from 8 to 11pm. It was exhausting but I felt so excited about this new opportunity and potential career path that I didn’t let anything else get in my way.
Besides blogging, there are many other ways to make extra money. Assess what skills or interests you have and try to make use of that. Here are some ideas of how you can save money to travel:
- Sell handmade items on Etsy
- Offer design and web development services on Fiverr
- Freelance writing
- Work as a virtual assistant
- Babysit
- Walk dogs
- Teaching English online
7. Save Money While Traveling
If you can earn money online or remotely, that would be an excellent way to save money while traveling. You won’t need to save as much prior to the trip. and you will have more financial stability.
This was what I did on our South America trip. I had started blogging and freelance writing prior to that, so I continued with it while I was traveling, making some extra cash as I went along. That meant I could travel longer and also not worry about money issues.
There are many things you can do online, such as working as a virtual assistant, graphic designer, or social media marketer. If you already have these skills, why not put them to good use while you’re on the road?
8. Stick to Your Plan
Saving money to travel isn’t easy. It requires a lot of determination and motivation. There are peer pressures and temptations out there that might make it difficult for you to stick to your budget.
For some of you, it might be even more difficult with personal obstacles like family problems, illness or student loans. Sometimes there are also unforeseen circumstances that may result in major expenses — don’t dwell on it, just follow through and continue saving.
Stay focused and make sacrifices. Keep reminding yourself of your final goal and why you’re doing this in the first place. Think about your dream and that you are working towards it. At the end of it, all these sacrifices will be well worth it.
If I can do it, so can you.
Do you have any questions on how to save money to travel? Let me know in the comments field below!
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