When I reached my early 20s, I saw something I thought I’d never see. My bank account rolled over into five digits as I passed the $10,000 mark for the first time.
I rarely tell people this because I don’t want to come off as boastful.
I’m saying this now because a lack of money is a huge obstacle preventing people from traveling. So I want to write about what I did to save up so much money to see the world.
The Road to 10K
I’m not rich or a money genius and I’ve never had a high paying job. I just put in a lot of grit and determination to reach a huge goal.
I actually learned a lot of my money saving habits when I was in high school. At that time I was working for a little above minimum wage in a grocery store.
Being a high school student, I didn’t have many expenses. So each check presented me with a lot of disposable income.
For me, there were two choices: save up money for later in life or spend most of it on things I didn’t need.
I’m extremely thankful to my parents for teaching me to be careful with my income.
I looked to my co-workers and friends to see how they managed their paychecks. They never seemed to have enough. Many spent their paychecks long before they were even earned. Money troubles were a constant source of frustration and pain for them.
Then I saw their problem. They kept spending too much money on unnecessary things like entertainment, video games and trendy clothing.
I decided to avoid that struggle and take a different route.
I cut purchases I didn’t need and never bought anything I couldn’t afford. That way, the bulk of my paychecks would go into savings.
By the time I entered college, I had saved thousands.
At some point, I started investing my savings. My bank helped me put money into bonds. Interest rates were a lot better back then and just by reinvesting more and more through my bank it added up quickly.
Eventually I passed the $10,000 mark and found a great opportunity to travel. And I’m forever grateful that I did.
I’m also grateful that I learned my savings skills. All of my trips since then have been financed using the same savings strategies and habits.
I’ve broken down what I do into four key areas:
1. Earn more than you spend
Whatever money you have coming in has to be larger than the money going out.
This shouldn’t be a huge surprise; it’s common sense.
What this means is that you have two options:
Your first option is to earn more money.
Take a second job or pick up hours at work. Try to find a job that pays a little more.
When I was in college, I continued working in a grocery store. I was putting in 30-35 hours a week plus going to class while maintaining a big social life. I was really busy, but I found a way to make it work.
Your second option is to cut spending.
This is the area you’ll probably find the biggest savings and where you’ll want to focus the most.
Figure out how much you’re earning and spending a month. It’s surprising how few people actually take the time to do this. List out all your expenses and find things you can cut or reduce.
I saved a lot of money on rent by living with my parents. When I wasn’t, I lived with roommates so my monthly rent was low.
And don’t forget about the little purchases like Starbuck’s coffee, premium cable or clothing.
It’s hard to understand where all your money goes until you start tracking it.
2. Say no to debt
Throughout my entire life, I’ve avoided debt like the plague. The last thing I want is to add another monthly expense that will only be paid off after several years.
I realize just how hard it is to stay away from debt completely. Even though I avoid it, I still have ended up getting into some debt too.
I’m just careful about what kind of debts I get into.
Student loans are hard to avoid if you want to get an education. Mortgages are at least an investment and you can get one while still saving money elsewhere.
The type of debt I have never had is credit card debt. Credit cards have higher interest rates so a larger portion of your payments simply go into paying down interest.
The important thing is to not let any debts overwhelm you or your ability to save anything on the side.
I’d also like to add that it’s not impossible to travel when you’re in debt, but it does make saving money for it harder. You have to make sure those finances are in order before you spend money on a trip. The last thing you want to do is default on your loans.
3. You can always get by with less
It’s surprising how little you can get by with and still live a comfortable life.
If you think about it, all your needs are quite basic: food, water, a place to sleep at night and basic entertainment.
There are many things I gave up that saved me a lot of money. I stopped drinking soda and fast food and canceled my cable subscription.
I thought I would miss them, but I really didn’t and I realized that I could live fine without them.
Living with less doesn’t mean living in complete austerity though. I still go out to eat at restaurants and have beers with friends, but I’ll usually chose from the cheaper items on the menu.
What it means is being particular about how you spend it while doing those things. It isn’t about limiting how often you go out, but how much you spend per outing.
4. Focus on your priorities and where you choose to spend money
Saving money to travel comes down to a choice on where you decide to spend your money.
You can spend it on an expensive car, restaurants and a big house or you can spend it on travel.
Unless you earn a ton of money to do both, you’ll have to make sacrifices on one side or the other. If traveling is important to you, you have to put the time and effort to make saving for it a priority.
There will always be temptations to spend your money when saving for travel. When you see money piling up in your bank account, you’ll start to think of all the things you can spend it on at that moment.
You have to keep your motivation high. Make travel important. Decide early on where you want to go so you can feel as if you’ve “spent” the money on traveling already.
Fund Your Travels
It may be unglamorous to cut costs to save money, but it really works. I still use the same strategy today although my savings don’t get as high nowadays because I travel more.
The good news is that you don’t need to earn a lot of money to do it. I’ve never earned a huge income, but I’ve always managed to find ways to save.
The more money you have coming in and the less you have going out, the sooner you can get traveling. Get that all straightened out and finding the money to travel becomes a lot easier.
photo credit: radloff
I’m often interested in posts about how people save and spend their money as I think it is still a subject lots of people don’t like discussing. I think people are generally still ‘funny about money’. For me a keen ability to prioritise means that when I am saving I don’t feel like I’m constantly denying myself too much. For example I will still go to my favourite restaurant and enjoy my favourite thing on the menu, but I will limit the number of times I go there. Real friends enjoy a cheap night in at home as much as an expensive night out afterall.
I’ve noticed people don’t like discussing it either. A lot of people don’t think they can get enough to travel. When I tell them that I just cut a lot of costs and save money, they don’t think they can do it.
You’re right that it’s not about denying yourself too much. Too much cost cutting is hard and can make you feel like you’re missing out on too much. I cut a lot, but still splurge once in a while. I didn’t mention it, but in college, I splurged on a couple of trips for spring break. I wouldn’t cut that cost just to save money.
I’ve come up with dozens of other ways to cut costs and not give up a good lifestyle. I’m thinking about writing an ebook about it since there are way too many things I do to mention in one blog post. That might be my next big project.
Getting money right means that we give ourselves more choices. If you’ve some money saved you can take a career break. If you’re living off a modest amount you can chose a job that’s not just about earning enough money. There are plenty of people who are good with money but as you say there are lots who just spend it all on nothing much in particular.
Choices has a lot to do with it. I find the biggest choice is between spending money now and spending it later. I know the temptation to spend money you’ve saved up. There’s always the feeling that you can afford to spend a little more than normal. It can be tough to ignore to keep on saving.
Great points and thoughts! To fund our dreams requires being intentional about what we do with our money. Unfortunately I was not so wise during my High School and young adult years so am working extra hard to be a better steward of my money. Great post!
I think most people are bad with money when they’re younger. I learned a lot from my parents early on and I think that made a huge difference. At the very least, it made me look more closely at where my money was going.
Boy, Steve. I wish I’d figured that out when I was working at a grocery store back in high school and after college. Even with two jobs, I still wasn’t saving. Oh, hindsight. But, now after many years of dabbling in debt, we are climbing steadily out of it. I would say slowly, but we are really crushing it these days.
I love how you said it isn’t about limiting the amount you go out but what you spend on each outing. I agree! We love to be out doing things and do spend money on things like coffee and beers out, but we don’t go to the big rip off places who shall remain nameless. We find deals, and we usually drink water with meals out. It’s rather like a game. Well, off to plan a trip…! Thank you!
I think cutting costs is important, but I don’t try to let it impact the overall quality of my life. A big part of that is enjoying time out with friends. The good news is that I still cut costs while doing that.
For a while, some friends and I would meet up at a fancy bar downtown. The prices for drinks were high so I’d order one or two beers and just make them last the night. I was there to hang out with friends anyway so drinking less wasn’t a big deal to me.
Steve, your advice is simple and effective.
I would add that a person would need to think about the emotional attachment to spending habits. Or whether they are just routine.
When I lived in London, I would buy myself coffee every morning – not because I enjoyed it (or so I thought), but because it was a routine.
But when I thought about WHY I did that, I realised that I enjoyed the routine, since I cut out buying coffee for 3 weeks and it actually made me miserable! SO I decided to cut back on other things in stead – like magazine subscriptions and cinema trips – things I didn’t enjoy all that much.
Spend less than you earn – golden!
– Razwana
You make a great point. Spending can be an emotional experience. How many of us buy something just to make ourselves feel better?
I think a coffee here and there to make yourself feel better is ok. There are so many places to cut expenses that you can always find a way to save the money some place.
Good for your parents to teach you such a valuable skill early on. Debt definitely can be dream limiting.
I have been naturally frugal my whole life. I am willing to spend money on things that matter to me and not on anything else.
A lot of my friends mock me for not having cable. I did go out and buy an antennae for football season because that was the only thing I missed after a year. Recently I was cat sitting for a friend who had full cable. There were hundreds of channels and nothing worth watching. I felt like I made the right choice there.
I’m hoping to make my next big trip in 2015 … have to build up vacation time in a job I don’t have yet … so I’m saving whatever I can.
I feel the same way about cable. There are a lot of channels, but I don’t feel like watching any of them.
When I was on my way to save this money, I found out early that cable takes up a lot of the monthly budget. So I got rid of it. When I did, I still had a few shows I was keeping up with, but I figured I would just catch them in reruns some day in the future.
Sure enough, years later when I got married, my wife wanted to keep cable so we got it again. I got to catch up on those shows I missed out on. I’d like to get rid of it again, but I know she wants to keep it. So for now, it stays.
(Saving money is like losing weight. So simple but yet so hard)
Its not easy but it feel so much better knowing you got money saved up.
The thing I realized about saving money is it don’t matter how much you start with but JUST START. When you start you actually wanna find ways to save money.
I was bad about saving money back when I first started working at 18. Finally when I got around 24 yrs old after a praying,reading and mediating I finally started saving more money. Here is how I am going right now:
1) I used a 52 week plan just for extra money. It goes like week 1 add 1 dollar. week 2 add 2 dollars and so on. Basically you just go up every week or however.
2) I pay in cash more now because all that loose change add up. I am actually going go sky diving off the change I have saved over the past year and half. People underestimate the saving change. I pick up lose change every where I go lol.
Right now I have a video game fund(10-20), a new car fund(75-125),a new apt fund(100-150) and a ps4/xbox one fund(what loose 1 dollar bills I have) lol.
Now I do have some debt but I consider it good debt because I have been rebuilding credit. I have a steady credit card payment that I can payoff whenever I get ready but I keep paying it because it help my credit. I also have a student loan payment
Yeah, saving money is a lot like losing weight. They both track what you take in and what you expend. It’s all about finding a good balance so you end up on the right side of the equation.
I pay a lot with cash too. Or I guess I should say that I pay within my savings. I think long and hard about purchases that would cost more than what I have in my bank account. If I think it’s a good investment such as for education or medical expenses, I’ll go for it.
I’ve never built any specific funds for myself like you have such as ones for buying a car or entertainment, but I could see how you could find it useful. My wife and I do keep track of our expenses with an excel spreadsheet which works well for us.
I really admire your frugal habits of saving money, even at a younger age. It seems like lots of young people always complain they don’t have enough money to satisfy all their needs these days.
Saving $10,000 for travel is a great achievement. You are, actually, my hero. I wish I could do that! I seem to be leaning more towards spending money on home improvement and then I hope will be able to take a nice vacation.
Awesome, I’m your hero. My frugal habits have paid off again.
I’ve heard those complaints you’re talking about. I heard them all the time when I was growing up. I guess I’m fortunate that I could get by with less and save up.
I believe taking control of your finances means taking control of your life. So many people don’t have any idea what it is costing them to live…and they are afraid to find out. Happy traveling.
There is a lot to what you say. It does take control to keep your finances in good order. I’ve known people who spend money all over the place only to discover one day that they’re thousands of dollars in debt. They didn’t see this huge burden coming on until it was too late.
Taking some time out to look at your income and expenditures is worth it. You might be surprised where your income goes. Or like you said, maybe they don’t because they’re afraid to find out.
Lots of great tips here for doing ANYTHING you love to do in life–be it travel, create art, raise a loving family, etc. As always, it is the recognition and commitment to not let money determine the course of your life. Good for you for taking the steps you did so early on–and your four habits are spot on! Thanks for the good you are spreading around on the web! ~Kathy
There is a lot to say for commitment. When you set a big goal like saving up money for traveling, you have to be committed to reach it. I know that there were times when I considered spending the money on something frivolous, I’m glad I kept going and stayed committed.
Steve man, you kill it with the writing! Love this article, you should have posted it on our site! haha
Thanks Jacob, I’m glad you love the post.