Yes, we are strong advocates of traveling the world, going out on trips, and stepping out of your comfort zones because apart from the experiences and memories you make, it’s one of the best ways to tap into personal growth. Nothing compares to meeting new people, immersing yourself in new cultures, and seeing the wonders of the world firsthand. There’s a massive difference between looking at them through photos and witnessing everything unfold right before your two eyes.
However, one critical aspect behind travel is responsible budgeting. You can’t just decide on impulse without having any money saved up because that will severely limit what you’re able to do and where you can go. Lucky for us, all this time we spend at home is the perfect chance to assess our financial position and make travel plans. So, today we’ll be learning how to integrate some practical money saving techniques that can help you build your travel fund more reliably.
Savings Accumulate. They Don’t Happen In A Lump Sum
Before we jump straight into the methods, don’t expect these techniques to magically generate a lump sum of cash in your bank account overnight. Remember that savings accumulate over time, and unless you’re among the early investors of Bitcoin or rode the Gamestop bullish run, we need to have realistic expectations on what’s achievable. These numbers are respectable at best, but give it a couple of months, and you’ll be surprised at how much you’ll have.
#1 Track Your Monthly Expenses
As a general tip for sound money management advice, we recommend tracking your monthly expenses and knowing where your cash flows. We understand that it may seem like a hassle, with taxes and insurance payments to consider, but grasping a general understanding of your financial situation every month will help you long-term. The goal is to arrive at a concrete amount of cash you can save every month, which will be the foundation of your travel fund.
- Cut Out Anything Unnecessary: Let’s face it, we’re all guilty of indulging in monthly subscriptions we don’t actually need and spending a bit too much on online shopping sprees. With the help of tracking your monthly expenses, we can shine a light on these bad habits and make more financially-sound decisions. Your goal is to cut out anything unnecessary and things you can live without, like picking up a new cookbook instead of takeout.
- Set Up A Separate Bank Account: If you want to go the extra mile, it doesn’t hurt to set up a separate bank account for your travel fund. Your money will be in safe hands, and you won’t have to worry about mixing up your other savings. Plus, it’s less tempting, which we’ve all fallen guilty for at least once or twice.
#2 Evaluate Your Long-Term Debt
Still, on the topic of recurring payments, use this opportunity to evaluate all your long-term debt and assess whether you’re getting full value from these investments. Sometimes it’s not the little bits every month that add up, but rather the big-boy payments that take a massive chunk out of your take-home pay. Most people have the misconception that all of them are worthwhile, but a bit of checking can prove otherwise.
- The Value Of Your Car: We get it. Getting a brand-new car always seemed like the objective financial independence goal we dreamed of during our early adulthood. However, once you consider all the insurance payments, maintenance costs, and the amount you still have to pay, they are among the leading reasons behind sucking people’s savings dry! So, unless the need for a car is absolute and you don’t plan on traveling around the world full-time, it’s not wrong to consider selling it.
- Reassess Your Home: Another big-boy recurring payment is the house, and while we all need a roof above our heads, these long-term liabilities are what anchor people down and prevent any form of travel. Of course, we don’t want you to sell your home on a whim just to go on a month-long trip. That’s financially dangerous. However, we must weigh the opportunity costs. You could downsize and get a more favorable mortgage or live by renting, both of which are more suited to the travel enthusiast.
#3 Credit Card Rewards And Rebates
Finally, we want to shed light on the unfair “bad” reputation of credit cards and recommend using them more often. You see, if you only keep to amounts that you can cover every month, you won’t have to suffer from outrageous interest fees. And, while you’re building an excellent credit score, you get to enjoy rewards, rebates, and even discounts on food, flights, and hotel accommodations. So, unless you’re a diehard fan of the idea of “zero absolute debt,” please consider using a credit card to your financial advantage.
Spend Your Time Wisely. Save Properly
In conclusion, there are more ways than one to save up and fully realize your travel ideas. With all the time in the world to use right now, we firmly believe that now is the best chance to use it wisely and save properly!