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