We have reached the final part in our travel budgeting series! In Part 1, we talk about saving for your trip including budgeting by region. In Part 2, we consider any pre-trip expenses that may incur before your adventure. In Part 3, we are going to walk through some tips on reducing spending now in order to get you on the road sooner. We will also discuss ways to decrease the amount of expenses that add up while you’re away.
Some of these changes can be tough habits to break. We highly suggest documenting your spending through Mint.com. First of all, it will help you pinpoint where your money is going. Second, it is great motivation when you start to see your travel fund grow.
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Goodbye Netflix & Other Subscriptions
Try reducing expenses at home that you don’t use frequently. For example, are you taking advantage of the premium channels you’re currently paying for or have you been spending all your time glued to Netflix? It’s likely you don’t need both.
Also, it’s probably time to say goodbye to those beloved monthly subscriptions. Birchbox and Stitchfix may be highly addictive, but if you’re serious about your savings goals, it’s an easy way to cut monthly costs.
Morning Starbucks and Eating Out
This is obviously easier said than done, but this is a great way to cut costs and ease yourself into the frugal traveler lifestyle. Small changes like brewing your own coffee can save you boatloads over a single month. Decreasing our dining-out expenses was certainly hard for us because it was such an ingrained part of our social interactions. We mainly tried decreasing the number of beers we drank and shared meals. This allowed us to save money while still getting out of the house to visit with friends.
Another great alternative is to practice cooking some of your favorite recipes at home. This will save you money and can become a great a bargaining tool when contacting Airbnb and Couchsurfing hosts.
Sell Your Stuff on Craigslist
You aren’t going to be able to bring all your precious belongings with you. Start selling unnecessary furniture or home décor items on Craigslist. Selling your possessions can seem nerve-racking at first, but you will discover a lot of things you have simply forgotten about. Remember that summer you tried learning the drums? Polish those beats up and give some other kid a chance at rock stardom. Plus, each item you sell is another item you don’t have to store!
Don’t Default While Away
When saving for a trip, many people focus on saving for flights, accommodations, and activities. What about the inevitable bills that you may be incurring while you’re off scuba diving in Australia? Many forget that there may be some bills adding up while you’re away so it is essential to include these expenses in your overall savings goal.
Hopefully you can minimize these payments, but whatever you cannot eliminate should be added to your overall budget.
Mortgage / Rent
Reducing your mortgage or rent payment can help you save both while preparing for your trip and while you’re off riding camels in Morocco. We were both fortunate enough to have the ability to move in with our parents in order to expedite saving for our trip. The timing happened to be right with our leases and we realize that not everyone has the opportunity or patience to fly back to the nest. If you don’t have this luxury, consider renting out your second bedroom on AirBNB or getting a roommate.
We live in a city where a car is essential. If you live in a city with public transportation and don’t have a car, you can skip to the next point. Otherwise, start taking note because car expenses add up quick!
We did the math (and you should to) on selling our car and the potential of purchasing another one when we got home. This depends on a number of factors including length of trip, monthly car payment, number of payments left on car loan and the cost of buying a new car after your travels. We were only going abroad for 4 ½ months and were far enough into our loan that it wasn’t worth selling our car. We calculated the number of car payments we would need to pay while we were gone and added this to our overall savings goal.
It is likely that your car will be sitting idle while you’re away. In most cases, if you still have a loan on your car, you are required to have some insurance. However, you can significantly decrease the coverage while you’re away to minimize your insurance payments. We recommend calling your insurance provider to discuss options and costs. In some cases, you can cut your monthly payments in half.
You have a number of options here. You can:
- Cancel your service,
- Suspend it for a while
- Switch to an international plan, or
- Unlock your phone and purchase a SIM card abroad.
If you have the ability to get an unlocked phone, that’s the best option. If you’re from the US, it’s likely unlocking your phone is next to impossible given the contracts we are bound to. We suggest talking to your service provider and discussing the options. If you are like either of us, this will take an entire Saturday and will require some heavy drinking afterwards. We opted for decreasing our data plans and taking advantage of Wi-Fi on the road wherever possible. This has worked tremendously well for us as we have spent very little time on the phone while abroad. Nowadays you can find Wi-Fi just about anywhere and there are free services to chat with friends/family back home.
You will never read in our posts about deferring payment. We believe in decreasing debt, not deferring it.
Currently paying off student loans? Simply take your minimum monthly payment and multiply it by the number of months you intend to be away. Include this amount in your savings goal. If you have been paying ahead, it’s possible you will not need to make payments for a few months. Alternatively, you may be able to pay less than your scheduled monthly payment.
Download this spreadsheet and plug in your monthly payments. Include this as a separate tab in the excel workbook started in Part 1: Trip Expenses and Part 2: Pre-Trip Expenses. This shall give you a comprehensive estimated budget for your trip. Plan ahead and you can really turn your dreams into a reality!
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We want to hear from you! How do you budget for a big travel adventure? Are there any helpful tools that you use when budgeting for travel? If you have any questions or suggestions, let us know in the comments below.