I’m gonna be brutally honest: it’s like some bloggers who publish guides on how to save money for travel aren’t even trying. They tell you to cancel your landline as if that’s even a thing these days. They say, “stop ordering $5 coffees every day!” as if that’s something everyone does on the regular and that’s the only thing holding you back from travel. “5 x 365 is almost $2,000, enough to travel for four months in Vietnam!” They parrot some ridiculously blown-up figure at you, assuming it’s a necessary expense that every “real person” faces, when in reality, only a small percentage of people spend that amount on coffee to begin with. And, let’s be real — those people aren’t the kind of people who really need to scrimp and save money to travel to begin with.
Well, guess what? I saved up enough money to quit my job to travel the world for the next four years or so, and I didn’t give up coffee or my social life to do it. I wasn’t an investment banker. No rich relative died and left me a fortune (though I’m candid that I’ve been afforded plenty of opportunity and privilege). Nope. I was just a public school teacher. What did I do? I tracked my income and spendings, prioritized my spendings, identified non-negotiables and things I could do without, developed alternate income streams, and was a little bit creative when it came to planning things with my friends.
And the fact I’m most proud of? I did this all while living, traveling as much as I could, and working full-time as a teacher living in one of the most expensive cities in the world: NYC. Not including my untapped retirement fund, I was able to save money for travel — approximately $50,000 over the course of five somewhat frugal years — while still affording to travel to 17 countries in that time alone! Here’s how:
The Basics & Travel Hacking 101
1. Get rid of all “bad debt.” First and foremost – even before developing savings, work towards getting rid of all bad debt, like high-interest student loans and all credit card debt. If you have a credit card with high interest, look into doing a free or low-cost balance transfer to a 0% APR credit card as soon as possible and work your butt off at paying it off within the time limit. You don’t necessarily have to pay off your student loans before you go travel – just work to chip away any high-interest private loans and make sure you factor in the cost of low-interest student loans into your monthly budget.
2. Reframe the way you think about money. Think about the kind of travel you want. Really think about it and make it concrete. Research the average cost of accommodation, food, activities, etc. in the country you’re dreaming of visiting. Or look at the average cost of one day backpacking that country. The way I think about it is this: every $25 is another day of freedom on the road. Would you rather buy some new clothes at H&M for $100, or would you rather have another 4 days of backpacking in Southeast Asia? Easy for me to say!
3. Set savings goals. It’s really hard to save money for traveling unless you know exactly what you want. As a benchmark, $1,000 per month of backpacking in Southeast Asia, Eastern Europe, Central America, or certain parts of South America is sufficient with — ideally — another $1,000-2,000 as a safety buffer. So, as an example, about $8,000 for a six-month trip. Subtract your rent and utilities from your paycheck and see what’s left. Set goals for your food budget and your everything else budget, and then see what your potential travel savings could be. For example, in my last year as a teacher in NYC, I took home $3,200 per month. I paid $1,100 for rent. That gave me $2,100 to work with, and I was usually able to save about $1,500 per month, which gave me $600 per month to spend on food and extras — way more than sufficient!
4. Start a travel savings account. Personally, I like Barclays because they give you a 1% interest rate, which is better than most banks. When I was earning a regular paycheck, I kept $1,000 in my checking account at all times and transferred everything above that over to my travel savings account every payday. I don’t recommend setting up automatic payments, as you could be hit with hefty overdraft fees if you mistime things. Do it yourself and feel a sense of pride every time you put money in. Rockstar!
5. Quit cash as much as possible. A lot of people advocate withdrawing a certain amount of cash per week and sticking to that and only that. I totally disagree with this method for two reasons: 1) you lose the ability to earn points with a credit card, which can add up to free vacations and 2) it’s way harder to track your spending. Cash just disappears in my wallet. At least when I use a card, I can track where all my money goes and make adjustments as needed.
6. Use Mint to set a budget and stick to it. Mint is a free service connects to your bank accounts and credit cards and automatically tracks your spending. I found that you do have to “train” Mint a little at first – it doesn’t always get your spending categories quite right at first. However, once you get used to it, it’s an amazing tool to see where your money goes!
7. Make credit cards work for you by opening rewards cards. One mega important caveat: only open rewards credit cards if you have the self-control to not go into debt. Any “savings” will be offset by the massive interest credit card companies charge — not what you’re aiming for! If you’re a responsible spender, some of my favorite cards are the Chase Sapphire Reserve, Chase Sapphire Preferred, Southwest, American Airlines, United, and Alaska Airlines. Delta is usually pretty crap. Check out my favorite points and miles blog, Travel is Free, if you really want to get sucked into the amazing world of frequent flyer miles and travel hacking. I haven’t paid more than $400 roundtrip for a plane ticket in 3 years — and I’ve visited over 20 countries in that time, as far-flung as Singapore, Sweden, and Serbia.
Note: this is definitely something Americans have an advantage on. For advice specific to UK/European citizens, check out the bottom where the lovely Dani from Live in 10 Countries offers more helpful advice.
8. Do online shopping using portals to maximize points. Before you do any shopping — online or otherwise — check out Cash Back Monitor. They do a great job tracking shopping portals for excellent points deals. You can get up to 15x or even 18x the amount of points sometimes! As an example, at the time of writing this, Sephora gives 15x points through the United portal. So your $50 purchase could give you 750 points towards travel (in the British Airways points program, 4500 points is enough for a ticket within 650 miles!) Just don’t go crazy buying things you wouldn’t! Note: You don’t have to have the credit card of the portal to shop there – just create an account. For example, you can shop through the United portal to gain United miles despite not having a United or points-earning credit card. This should work regardless of your country of residence but of course, shipping is something to consider here.
9. Or use cash back portals like eBates. If you’re not into travel hacking and credit card points, opt for cold hard cash back instead! eBates usually has the best offers, but again, trusty Cash Back Monitor will tell you what the best deal is.
10. Eliminate ATM and banking fees by switching to Schwab. You don’t need to be an investor to have an account with Schwab. Their debit card has no monthly fee, no minimum funding, no foreign conversion fees, and no ATM fees whether you’re at home or abroad. Note: I don’t think non-Americans can take advantage of Schwab, but other countries often have similar no-fee cards. Do some research!