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We saved £30,000 for our first RTW trip and it was hard. Like titanium alloy hard. Titanium alloy edged with diamonds hard. We swore that we’d never be that frugal again – what possible reason could anyone have for putting themselves through such an ordeal TWICE?
Six months after the end of our last amazing trip we were at it again.
There’s a travel bug going around and we got a bad case of it. We wanted more – we wanted to do it forever and we wanted to start immediately. So we reduced our living expenses right down and managed to live off just 25% of our combined salaries, sending the other seventy-five percent straight to our savings accounts.
This time, we managed to save over £23,000 in just 9 months and it really wasn’t that bad. Having had a taste of what’s out there, owning an iPod Touch suddenly doesn’t seem as important as getting to the party capital of Brazil.
We aren’t rich by any stretch. We both earned below average salaries for the UK, but we chose to prioritise travel over buying ‘stuff’ and spending money on big nights out. Many people say they want to travel but they can’t afford it. We think everyone can if they want it enough. It may take some people longer than others, and you’ll have to make sacrifices, but the trick is simple – start saving now!
10 Steps to Saving for Travel
1) Record your spending – Start a spreadsheet and write down EVERYTHING you spend. Do this for at least a month (although I recommend it as a permanent habit). You can then see what you are spending a lot on and what you can cut out.
2) Create a monthly budget – Allocate money to each essential area – mortgage/rent, insurance, utilities, food and transport etc. This is the minimum you can live off. Then allocate a ‘fun budget’ for each month for anything inessential (gym membership, meals out, socialising, buying clothes, gifts etc). It’s up to you how much this is, but keep it to the minimum. Ours was £50 between us, but you might not be able to go that low initially. Add up your essential and fun budget, and subtract this from your income. This is how much you have left to save.
Salary – (Essential Expenses + Fun Budget) = Savings. (if this comes out as a minus number, you’re in trouble…)
3) Set up a bank transfer – Once you’ve worked out your monthly savings, set up an automatic bank transfer from your current/checking account to your savings account for the day after pay day. This is an essential step – if the money isn’t in your account you can’t spend it. Your savings account must be untouchable.
4) Increase the interest on your savings – Research the best savings accounts to maximise the interest you earn on your savings. In the UK Money Saving Expert is a fantastic resource for finding the best accounts. In the US try Get Rich Slowly. We earned over £1000 in interest on our first trip. We used tax free ISAs along with high interest regular savings accounts, and when these reached the limit, then the highest paying normal savings account.
5) Stop buying things – It’s very simple, just stop. No more clothes, CDs, DVDs, whatever it is you’re currently spending your money on. If you want to go travelling, you don’t need any more stuff. Get creative – dig out clothes from the back of your wardrobe that you haven’t worn in years; join a library; borrow DVDs from friends; mend things rather than re-buying. It actually becomes really liberating as you start to realise how little you need.
6) Socialise cheaply – You don’t have to give up your social life, but look at ways to have fun for less. Invite friends around for dinner rather than eating out; go for walks; visit free museums; attend art gallery openings (free wine and nibbles!); go to the pub but only have one drink; look for free local band nights and festivals; keep an eye out for discount vouchers at restaurants and cinemas – the options are endless. Drinking less alcohol will really help reduce your spending. Use your fun budget wisely and prioritise what’s important to you.
7) Reduce expenses – Keep going back to your budget. Is there any area you can reduce further? Switch utility and broadband providers to a cheaper deal; cancel gym membership and go for a run; eat less processed food and downshift your brands to reduce your food budget; cancel cable TV, magazine subscriptions and anything else inessential. As time goes on and spending less becomes a habit you should be able to reduce your fun budget too. Read Money Saving Expert’s Money Makeover for lots more tips to reduce your expenses.
8 ) Sell your stuff – Boost your savings by selling your possessions. We all own things we don’t need, and you don’t want to waste money on storage while you’re travelling. Read our three part series on How to Sell All Your Stuff for our tips and favourite selling methods.
9) Work together – Couples need to work together towards joint saving goals and support each other to reach them. I’ve always been a good saver but Simon certainly wasn’t. If he had money he’d spend it. But he made a commitment to saving for travel and let me take control of his finances. Joint accounts make this a lot easier. Baker from Man vs Debt is a passionate believer in the benefits of couples combining finances.
10) Keep motivated – There are times when saving is hard. When you are struggling with your austere lifestyle, focus on planning your trip. Read blogs and library books about the places you want to go, plan exciting activities, look at photos on Google Images, and remember that it’ll be worth it!
Saving may seem difficult at first but over time your mindset changes. You start to not want to buy things anymore, and spending money becomes a rare occurrence only for things that are worth it. It feels liberating to live simply because you are no longer so dependent on your salary – your stuff doesn’t own you.
Travel is one of the most rewarding things you can do, and once you are on the road all the hard months saving will be worth it.
I love your no-nonsense, direct approach to this topic! It’s amazing how much money a person can save by refraining from dining out, and that money can take you very far in countries in which you get a good exchange rate. When you’re out there in the world living it up, all the hard yards become worthwhile.
Your blogs are fantastic, I have wanted to travel for so long but have used the “I can’t afford it” excuse for too many years. Now however after reading your blogs (among others) I have been completely dissuaded of my previous statement.
In fact I realise my lethargic approach to achieving my dreams is completely unrealistic, this kind of thing is not going to fall into my lap, more over it is not going to be given to me either. I have come to the conclusion the next 6-10 months are going to be the hardest of my life but come 2015 I will look back on it and laugh.
I am literally only at the first stage of planning my trip and am on the budget stage, I am amazed at the amount I spend on crappola (scuse’ my French!!)….. just think how much I could have saved over the years if I had found this blog sooner!!!!!
Good luck Lauren! Saving is definitely hard work but it’ll be totally worth it in the end.
This is absolutely brilliant, my girlfriend and I are currently trying to plan for a trip but keep coming up short on the monetary side. Great advice, about time to start that spreadsheet and sit down and make our budget. Hopefully well be able to make it out soon
Interesting comment about increasing the interest rate on your savings. So many people feel they have no options but to walk into the local bank and accept the infinitesimal interest rates they are offering.
It’s possible to take advantage of the world’s higher interest rates, sometimes without even leaving your home. Banks in developing countries will sometimes open a savings account for you right over the internet. Places like Mongolia pay as high as 15% interest, and the minimum deposit is often next to nothing. And some multinational banks allow you to open an account in your home country, then move most of the money to one of their overseas banks that may pay higher interest.
Countries like Australia and New Zealand don’t like foreigners keeping accounts with them as much, but if you’ll be traveling there, you can open an account, fund it, and then activate it when you get there. These countries have the highest interest rates in the developed world now.
Do some searching and you can find opportunities like this to help make your travel savings a bit easier.
That was definitely inspiring! I’ve saved for my 3-month backpack trip to SEA and it wasn’t really that hard. You just gotta stick to the plan!! Thanks for the great blog!
So true what you have written. We live off one income, have bills and sad to say some debts we are paying off and we still need to save as well for visitng family overseas. To be honest I don’t want to forgo seeing my family so that’s my priority. It is hard sometimes, and we have kids as well. But it’s amazing how much stuff we are given from older relatives children, toys, books, clothes. Of course we do buy them some things, but like you said, once you start cutting back and only purchasing what’s necessary it gets easier. My kids still do gym club and visit farms and theme parks and go on school trips, but we’re not bothered about designer clothes or brands. Plus no one has ever noticed. We take advantage of points schemes with certain shops and have had plenty of free days out and travel. It takes a bit of time, but it can be done. Also we eat simply but healthily. I buy lots of fruit and veg each week, but buy whats in season and on offer. We eat lots of fish and just a little meat, it really makes a difference.
That’s a great approach Carrie – the important thing is to prioritise what is really important to you and only spend money on that, rather than spend it mindlessly. Sounds like you guys are doing great.
Thanks for these tips. I think that it’s better to save money and then go on your trip than try to work and travel at the same time (as other digital nomads). Better safe than sorry and better postpone your trip rather than travel without having an emergency fund.
ha! just found you guys! i thought i hear about you before. Im from Bolivia, thanks so much for showing the beauty of the country instead of what everybody talks about. … drugs.
Will be reading more about your trips and have fun!
Bolivia was our favourite country in South America – such a beautiful place. Thanks for reading!
Saving becomes really simple when you break it down like this. These are great tips and a good wake-up call for anyone who wants to save for even a short-term trip! Thanks for sharing!
Glad you found it useful.
This site made my day! Just got back from a short trip in India and I’m suffering from the usual “post travel depression.” I want to quit my 9-5 job and get back on the road fast. However, after coming across this blog, I figure i need to save more efficiently to save enough to be on the road for 1 full year. FOCUS! Erin and Simon,you guys are such inspirations! I think I will visit this site every single day and daydream till I’m back on the road. Cross fingers, “South America”
Ah, thanks so much. What a lovely comment! I’m so glad you’ve found the site inspiring. You are right, all you need is focus and you’ll be on the road in no time. You know how great travel can be so it won’t be difficult to make the sacrifices necessary to save – it’ll be worth it in the end. Good luck!
I def need to record my spending this time around… I spent time trying to save money, but didn’t spend enough taking notes on my budget etc. Sometimes I would have lots of money left over and sometimes I would run out of money way to fast.
It does help to keep good records, that way you always know where you are up to.
Number 10 is so on the mark. Planning and keeping you’re head down, definitely the way to go. Cracking post!
It definitely helped to keep me going. Glad you enjoyed the post.
hey Simon y Erin; entre en su pagina y me parece espectacular.- me gusta su vida pero creo que es para gente sin compromisos familiares (lease hijos).- Pero igual, es de sueño lo que hacen.- espero que tengan una feliza estadia en Salta y Simon; inspirate en el jacuzzi de tu depto.- Les dejo una idea: mi tecnica para ahorrar mas; (por lo menos en este pais) es trabajar mas y generar mas negocios e ingresos;.- ivan
Gracias Ivan. Nos encanta su departamento y el jacuzzi es muy inspirador! Hay mucha gente que viaja con hijos tambien- es posible!
I can vouch for 6) Socialise cheaply. I gave up drinking 5 months ago, and I have managed to save so much more. Cant wait ’til I’m travelling and get to have a drink again though. That Cerveza is going to be so damn tasty.
Yeah, we both stopped drinking for a long while but I couldn’t resist the lure of the cervezas when I got out here…
I just stumbled on your website and love it!
Last year I got serious about saving for a RTW trip with my son. I sold my house and almost everything else and we moved into a small, cheap apartment. Even though our RTW won’t happen for a few years (he is only 7 and I want to wait until he is at least 12 or older), I am hoping to be able to fund some shorter trips between now and then.
The tip about living off $5 a day for food is a great idea that I think I’m going to start.
Honestly, the best money saving trick I’ve been using is being a vegetarian and trying to simplify my meals as much as possible. You’d be amazed at how much you save when your not buying meat for every meal and keeping your meals simple.
Thanks very much Jessica – glad you like the site. Congratulations on making such a commitment to saving for your trip. We always love hearing about people travelling with kids, as it’s usually such a bit excuse for people not to travel.
Definitely agree that veggie food saves money. A big bag of lentils or chickpeas can go a long way at such a low cost.
As a mother, I am totally AGAINST the whole idea of moving back with your parents to save money. My son has just moved back home and you can bet he pays his fair share of all expenses :)
I actually budget by starting with #3 – work out how much I want to transfer out my pay each week then work my budget around that.
Haha! My parents would probably agree with you as my younger brother has just moved home again.
Really, this is good advice for people who want to save for *anything* that’s meaningful to them, but saving up to travel is particularly compelling, isn’t it?
#5 seems so simple and obvious, and yet may be the hardest to achieve. We are such consumers of things. Stuff. Possessions.
And yet, I think of how, when traveling, I rarely miss any of it.
This was quite an inspiring post. I’ve no plans for an extended trip, but I’m certainly motivated to save up for *a* trip, nonetheless!
.-= A Well-Versed Mom´s last blog ..First Date =-.
It´s very true – this advice could be applied to anything. In the past we´ve also saved up to buy a house, furniture and redecorate it all, but saving for travel was definitely most rewarding! We haven´t missed anything that we´ve left behind – travel makes you realise what you actually need. Good luck with your saving- even just for a short trip.
Guys, well done! Love your website, love this post, love how your reply to all your comments, love you vibe and am super impressed and inspired by your HUGE savings!
Well done on all accounts!
See you around the world:)
.-= Nate´s last blog ..Re-igniting my blog with trepidation =-.
Thanks Nate for such a lovely comment! It´s always nice to hear from such supportive readers. Hope to meet up with you some place in the world!
really interesting.. this post made me think to consider again my dream to travel..
.-= Xpat´s last blog ..How We Were Kicked Out Of The Park? =-.
Just discovered your blog – great post!
I agree 100% with all of your points above, it really isn’t difficult if you make a conscious decision that Travel is the #1 priority.
Once you’ve been travelling once I think it becomes easier. The temptation to splurge on gadgets etc.. becomes a lot less once you know that the money can be used for something better on the road.
I’d love an iphone for example, but I know I’d get more pleasure if I spent the money on a month in Buenos Aires and so resistance to buying ‘stuff’ becomes easier
.-= Ben Moulam´s last blog ..A Treehouse in Nelson =-.
Hi Ben, thanks for commenting. You’re right that once you’ve been travelling you know what you are missing out on by buying stuff. Simon would also love an iphone but it just isn’t a priority.
.-= Erin´s last blog ..How to Budget for Long Term Travel =-.
OMG can’t wait to go. just seen the pictures and found some posts. i really envy you for the life you have. envy in a good way tho. i’m glad i stumbled into your blog.
Glad you enjoyed the India photos and posts. We love it there. I also write about the Kerala region at Kerala India Travel
maybe it will be a good idea if you can share the experience you had in India in a post on your blog. i would be curious to read about it. or if u did it already, my bad, i will search on your blog after submitting the comment hehe.
not buying gadgets for a while will be almost the same thing for me as quitting smoking. but i will do it. i know i can. i have to. i plan to go for 2 months in India with some friends, only walking or maybe local buses. this will be the trip of my life hehe.
thanks for the tips.
You can do it! The good thing is that India is really cheap so a little will go a long way. Walking the country sounds ambitious – I look forward to hearing about that! Let us know if you need any India advice. We spent 3 months there and it’s our favourite country.
I agree that anyone can save for travel. Most people don’t think they have enough money but if they wrote down everything they spent they would be shocked at the money they could save.
Also, it’s so hard for our culture, but not buying stuff really adds up and in the end it’s just stuff
It’s so true Ayngelina. We found that once we stopped buying stuff we didn’t really want anything anymore (well, apart from a Macbook…).
My own tip, for what it’s worth is: Once your essential bills and rent etc. are paid, try living on £5 a day to cover food and drink, in other words, just what you’d need to keep you alive if you were hiking/biking/camping etc. I’ve found this remarkably easy. Makes me believe if I can do it in a western country then I should definitely be able to do it in South America or Asia etc. After a while only going out of the door with £5 in your wallet becomes an addictive challenge.
I definitely agree with setting yourself a challenge like that. No spend days (or weekends or weeks!) are also a good way of changing your spending mindset.
Paul mate I really REALLY like this idea! And I’m going to start it tomorrow :)nice one.
Paul, since it’s been 4 years I hope you’ve realized that south america IS western, and unless you’re hiking or something, 5 gbp a day won’t do much. Buenos Aires is expensive, and I don’t know about other cities in South America but I’ve found it cheaper to eat and buy stuff in NYC.
Good post. If I could add a number 11, it would be this: move back home with your parents. Paying rent is the biggest waste of money imaginable!
Good idea – as a couple (and house owners) we didn’t do this, but it would save a lot of money.
since you have been already RTW once, i am really keen to see how you guys will budgeted your travel expenses. it’s something we failed on, our budget it was nothing more than a guess but it didn’t went too bad except in the USA
We have got a post coming soon about how we budgeted for our first RTW trip. This time it is much harder as we have no idea where we are going or what we will be doing or for how long! We are already spending way more than we would like. Contingency is key.
Wow, Erin, even on your RTW trip, you are mega-organized enough to put together a how-to guide!
This is so useful for poor (as in bad) savers like myself. You should write a book!
I actually cheated and wrote this post before we left and scheduled it in! Glad you found it useful. You never know, a book (at least an ebook) may be on the cards at some point.
Love your new site! It looks worth all the hard work you put in!
GREAT STUFF, man, this is just about what I’m doing at the time beeing – but I haven’t crossed the 50%-border yet. Good tips here!
.-= Samuel´s last blog ..Walking_About: Wisdom to take with you on any adventure :: 10 Amazing Life Lessons You Can Learn From Albert Einstein =-.
Thanks Samuel. Anywhere close to 50% is still great and it definitely gets easier as time goes on.
Reading how you saved is really inspiring… the three of us are about to leave for our RTW trip at the end of May and we’ve been trying all sorts of things to keep expenses down now, so we don’t have to worry about money once we are on the road. I mean, don’t get me wrong, we’ll still be on a budget, but I don’t want to have to put anything on credit cards and come back to a huge bill. It’s been a life style change for us, because we used to go, go,go, spend, spend, spend and now we are trying to save so much. Anyway, thanks again for the words of encouragement and helpful tips!
.-= Jade´s last blog ..Goin’ Show Webisode- #1 Los Angeles =-.
Hi Jade, glad you found the post useful. It sounds like you are doing well yourselves though. It is a major lifestyle change but so worth it in the end!
Great stuff – I wish I had done more earlier. I’ve saved well the last six months but didn’t kick into gear early enough.
About to hit the “sell your stuff” phase so I’m looking forward to reading that post.
Thanks for sharing! See you on the road.
It does gets easier to save the nearer you get to departure. Selling stuff can really help boost your savings. Good luck with it.
Oh my God! This blog post was amazing. It makes so much sense when you start to break things down like this. Just one question… how much do you set aside for the fun stuff when you’re actually travelling?
.-= Waq´s last blog ..Films I’ve seen recently that everyone should watch… =-.
Thanks for the appreciation Waq. I really think saving is possible for everyone once they change their mindset. On the road we are a lot more flexible with our budget and don’t tend to limit the fun stuff too much. It really depends on the country but we do come up with a budget (blog post coming soon!) and try to stick to it. In Brazil recently we completely blew the budget though!
.-= Erin´s last blog ..How We Saved 75% of Our Income to Travel =-.