Are you ready to take a trip, but can’t imagine ever saving enough money to do so? Do you feel like there is never enough money at the end of the month to put aside? I’m here to help. I always say that if you set you priorities in line with your goals, there is not way that you won’t succeed. If you make travel a priority, you will travel.
Once you have put your mind to traveling, you will find places to cut back on unnecessary spending. Keep in your mind that material things are not what make you happy in life, experiences and people do.
My steps to saving money for a trip are pretty easy, there are only 3.
1. Open a separate bank account dedicated for travel
2. Create a monthly savings budget or savings plan for your trip
3. Transfer the determined amount of money from your regular account into your travel account
If you do these things and stick to the budget, you will be well on your way to saving up for an amazing trip!
Open a new bank account
First, start a separate bank account for your trip and don’t touch it. If you keep this money in your checking or savings account, the likely hood of you using it by accident is very high. Keeping all of your money together also makes it easier to cave into some of the things you decide to cut out. Keep the money separate, and keep it safe.
Make a savings plan
The next thing you want to do is come up with your monthly savings budget. I have this built in to my monthly budgeting spreadsheet (you can find a template for that in my resource library here). Your goal is to figure out how much you can put aside each month to save for travel. At a high level, there are 5 steps to doing this:
- Figure out how much take home pay you actually get in your account each month (after taxes and deductions)
- Round up all of your reoccurring bills – mortgage/rent, utilities, car payment, phone, subscriptions etc… Do this by looking at all of your banking/credit card statements for the past few months to make sure you don’t miss anything.
- Categorize and get an average of your monthly variable spending – groceries, fuel, restaurants, clothing, gifts, home etc… Again, use your bank statements to figure this out.
- Run the numbers. Total income – monthly bills – variable spending = Amount to transfer to your travel account.
- Every month, transfer the amount that you determined could be saved to your new travel account.
Transfer money into your new travel account
As it’s listed in step 5 above, the last step in saving for travel is to TAKE ACTION! Imagine that you determined you could put aside $500 every month toward your trip, and say you get paid twice a month. Take $250 from each paycheck and transfer it to your travel account immediately after your paycheck hits your bank account. This will ensure that you actually get the money into your account, and don’t accidentally spend in on that milkshake that you don’t really need.
Hopefully by doing this alone you are able to save up enough to take your dream trip.
What if you don’t have enough money?
Unfortunately, most of us overspend. If you found that when you ran the numbers, Total income – monthly bills – variable spending = $0 or even a negative number, then you are going to have to do a little bit more work to make your dream trip a reality.
On the bright side, by doing the work in steps 2 and 3 above, you already know where your money is going. Now you are just going to have to figure out where you can cut back.
Be tough on yourself here. You are going to have to give up a little bit in order to get what you want I’ve listed some things to think about giving up or cutting back on below. Remember that this does not have to be permanent. Once you take your trip you can add all the goodies back into your life. It’s just a short term sacrifice, that you can always go back to. Although in my experience, once you get a taste of traveling you won’t want to go without it, so you may be willing to give up some things forever.
- Gym membership
- Cable
- Eating out
- Beauty/Grooming – do you really need to get your nails done or your hair professionally done?
- Cocktails/ Drinks out with friends
- Sporting events/leisure activities (like going to the movies)
- Coffee/tea
- Buying books – rent from the library instead!
- Driving short distances – walk more or take your bike
- Groceries – If you plan your meals and shop the weekly sales, you are bound to save some money
- Subscriptions – Netflix, Hulu, Spotify, magazines, newspaper etc..
- Clothing
If cutting back on these things isn’t enough, you may want to think about way that you can bring in a little bit of extra money (freelance, part time job, babysitting etc..). Additionally, if you type in “How to Save Money” into Google you will find hundreds of ideas on different ways to creatively save money.
I hope this post gets you closer to that dream trip that you’ve always wanted to take.