“I really want to travel more, I just can’t afford it.”
I’ve heard this countless times over $50-per-person brunches, in $30 cab rides, and while sipping $16 cocktails.
There’s absolutely nothing wrong with spending money in those ways. But let’s be honest: you don’t really want to travel more if you’re spending your last dollars on a trip to Nordstrom instead of a trip to Norway.
It all comes down to priorities…and being honest with ourselves.
That being said, I’m not all about the scrimping, sacrificing and suffering found in your typical budgeting advice. That’s not my style.
I’m not going to tell you to clip coupons or to stop buying your daily latte. Seriously, if not buying coffee was the answer to all our financial dreams, it would have worked by now.
I want to share a less dictatorial approach to affording travel, one that feels freeing and easy versus restrictive and striving. This priority-driven, automatic approach makes life simpler. And it helps me be intentional about spending money in ways that are truly fulfilling while still enjoying life.
Side note: I am not a financial professional of any sort. Far from it. I’m just sharing what’s worked for me. Also, this is not about budget travel, or traveling for free, or how to make money. I’m assuming you have an income that covers your basic needs with a bit left over.
Before I jump into how to save money for travel, it’s important to evaluate what you consider a “need” versus a “want.”
Ever wonder why some well-off people still feel like they’re just scraping by? People get stuck by allowing their idea of a basic need expand along with their income over time.
Even if your income increases, basic needs should still be the same. Shelter, food, insurance, medical care, clothing, education, etc.
I’m not saying you shouldn’t have manicures once a week or dinners out every night if you can afford it. The opposite actually. I’m just saying be honest with yourself about the difference between your wants and needs.
Transportation is a need. A brand-new BMW is a want. Food is a need. Ordering lunch every day at work is a want. Duh, right? It’s not rocket science, so why is it so hard to do?
Without having a clear understanding of your values and priorities, and a financial system to support them, it’s easy to get caught in the mindless spending trap.
First, check in with yourself to make sure what you consider essential lines up with your values and priorities. Since you found me, I’m assuming you value travel, experiences, and freedom but don’t want to feel like you’re sacrificing your everyday life while saving up for a trip.
Sound right? Next, we’ll cover three steps to saving for your travel dreams (with no lattes left behind).
1. Pay off credit card debt
This should come as a no-brainer. However, to be completely honest, I did not pay down my credit card debt fully before I started spending money on travel—though I was actively paying it down at the time.
Know yourself and what your financial fitness is like. I’m not the type of person to miss a payment or go on a swiping spree. In fact, I’m pretty neurotic about financial responsibility. If credit is a slippery slope for you, then yes, absolutely pay off your debt first and foremost.
Set up automatic payments to ensure you make the minimum payment each month for each one of your credit cards. Pay as much extra as you can on the card with the highest interest rate first. Continue until all of your cards are paid off.
2. Set up two automatic savings transfers
Set up one emergency fund account and one travel fund account. Once you’ve taken care of basic necessities and your debt payments, automatically transfer money to both accounts each month. Prioritize the emergency fund, because shit happens.
Now that you’ve put money toward your priorities, whatever’s left over goes into the “fun” bucket for guilt-free spending on anything else.
[clickToTweet tweet=”“Do not save what is left after spending, but spend what is left after saving.” -Warren Buffett” quote=”“Do not save what is left after spending, but spend what is left after saving.” -Warren Buffett”]
3. Sign up for credit cards with big bonuses
Since we’re talking about saving for travel here, I have to mention credit card bonuses as part of this strategy. I’m not going to go into full-blown travel hacking mode, but if you’re interested in learning more, there are a ton of amazing, well-tested tips here and here. And no, if you use credit responsibly, your credit score will not go down.
Once you’ve paid off your credit card debt (this is a prerequisite!), signing up for cards with awesome travel bonuses and perks is the easiest way to boost your purchasing power. In fact, we just used points to book two round-trip flights to Japan for FREE!
Navigating the world of credit card bonuses can be incredibly complicated, though highly rewarding—or it can be simple, and still pretty awesome.
So what’s the sanity-loving travel hacker to do?
- Sign up for a card with an amazing points bonus offer.
- Put all of your bills and purchases on your new card to reach the minimum spend for the sign-up bonus. If you need help reaching the minimum spend ask if you can purchase items for friends and family and then have them pay you back.
- Pay it off in full each month. ONLY charge what you can pay in full each month.
- Cancel the cards with a fee before the fee is due. Most cards with great bonuses will have a yearly fee, though most will waive it for the first year.
Now that you’re a travel savings machine, let’s review…
Get clear on your values. Pay off debt. Transfer money to emergency and travel savings funds. Sign up for credit cards with awesome bonuses—as long as you can do so responsibly. Rinse and repeat until you reach the money and/or points you need for your trip.
Make all of your payments and transfers automatic and you have yourself a simple, money-saving system that you don’t have to think about. Use whatever’s left over in your checking account without guilt since you know you’re saving for what matters most.
It’s simple, but no one said it’s a quick-fix
This type of non-budgeting is more sustainable and livable than constantly feeling like you’re scrimping and struggling. It may take a while to afford the kind of traveling you’re after or to rack up enough points. But over time, even if just $10 a week makes it to your travel fund, you know that you’re prioritizing what matters to you…without scrutinizing every penny spent on your daily coffee or gym classes.
What’s your biggest challenge when it comes to saving money for travel? Let me know in the comments.