The hardest part about a RTW trip is figuring out the money.
It’s a huge mountain to climb, but it’s not impossible. The following are 20 tips on how to save money for your upcoming around the world trip.
First things first, though: you need to figure out how much you actually need to save. How much will it cost you to go around the world?
Just remember, whatever your around-the-world travel budget is, it’s best to have a plan in place!
Start a dedicated travel fund
Create a new account with your bank called “I’m Outta Here” and feed it monthly, weekly, or daily. Make it easy to transfer money over from another account and every time you go online to check your balance, transfer some money, even if it’s just $5. Make it fun. Make it a habit. Make it natural. Make it painless. Revel in its growth!
Create a savings plan. A good savings plan will have 5 steps:
- Assessment – Compare your trip plan to the reality of your financial situation. Is it feasible, or are you dreaming too big? Make hard decisions. Be honest. Once you’ve got a general idea of your trip’s overall cost, compile a spreadsheet that lists your income vs. your expenses to see how everything stacks up.
- Setting goals – Your savings plan should comprise several goals, some short-term and some long-term. List your goals in specific numbers and don’t be shy to shoot high. But, not so high it kills your enthusiasm for your big trip (people have traveled around the world on nothing!).
- Creating a plan – This savings plan details how you’ll accomplish your goals. This could done by removing unnecessary expenses (see below!), setting a strict spending budget, or adding additional income to meet your goals.
- Implementation – Put your plan in motion and maintain it.
- Monitoring and reassessment – As time passes, your plan will evolve as your spending habits change. Take a look at your progress every month and scrutinize the budget for possible adjustments.
Commit to your dream
The first of our tips for saving money (for travel) is to remember why you’re doing this and to remind yourself every day. Put a picture on your wall, or a map with pins and strings to mark your dream around the world trip route, for constant revalidation. Saving money is a slog, but anyone can do it if they set their mind to it.
- Reduce your expenditures.
- Simplify your life.
- Sell some stuff.
- Earn some extra income.
- Get into habits of frugality (save without shame!).
Assess your expenditures
Make a spreadsheet and list out every one of your daily/monthly expenditures. Organize them into two columns: “Needs” and “Wants“. Slowly eliminate all the “wants” from the things you regularly purchase.
Spend less on lunch
It may be as simple as not getting a $2.50 drink (tap water is highly underrated as a beverage!) but make a point of spending less than $8 on your lunch. Those savings will add up. Say you go out to eat five times a week. Just trimming your lunch cost from $12 to $8 saves you $832 a year! For even more savings, pack a lunch if you’re able.
Eat out less often
Restaurants put more holes in a saving plan than a woodpecker on amphetamines. Plus, learning how to cook for yourself is ridiculously gratifying. The Food Network and Recipes.com have a near limitless repository of delicious recipes to start you off. Even in the United States, you can comfortably eat on $40 to 50 a week cooking for yourself. Simple unprocessed foods like rice, beans, chicken, pasta, potatoes, and vegetables are healthy and cheap.
Reduce or eliminate your car usage
In the United States, it’s almost impossible to live without a car unless you live in the largest cities or really enjoy long-distance biking. Our distances are just too far apart, and we don’t have extensive public transportation! The easiest way to reduce your car usage is to sell it, but that’s only feasible if you’re about to leave on a long-term trip, or happen to live in New York City. Uber and Lyft are great options for daily car sharing if you need to go long distances. But even if you can’t totally live without a car, bike and walk more and shop as close to home as you can. Every little bit helps!
Kill the cable TV dead
You’ll be surprised how fast your savings add up when you ditch cable TV. Several friends of mine pay up to $150 a month for their cable. That’s insane, it adds up to $1,800 a year. Even a more reasonable rate of $99 (the average monthly cost of cable TV in the United States, as of 2016) still ends up being $1,188. That could fund an entire trip to lots of places in the world! Besides, there are plenty of free and cheap ways to get your entertainment. Netflix is $10 a month. Books are cheaper than movies.
Reduce your utility bills
Put a sweatshirt on and keep the heat on low. Open the windows to catch a breeze instead of using the air conditioner. Turn off the lights when you leave a room. Shorten your showers. Some areas of the country have more moderate temperatures than others, but even a few bucks a month pile up in your travel savings account. The average utility bill in the US ranges from $90 to $140 a month. If you can trim 15% off by being more efficient, doing fewer loads of laundry, and conserving energy, you could add around $225 to your savings, annually.
Quit smoking
This one’s a no-brainer. Not only can stopping smoking save you $2000 in a year, it can save your life! Can’t do it on your own? Get someone you know to help you keep accountable.
Cancel your gym membership
Instead of that hefty gym membership, exercise in the great outdoors, run in the fresh air. Swallow your pride and utilize those strange public fitness things in the park. The world is a cardio machine. Watch the calories burned outside turn into greenbacks in your bank account!
Skip the spa
Luxury feels so good, but spas are a serious expense. Massages, peels, and mani-pedis will cost you your hard-earned cash, and they certainly won’t help you get on the road any sooner. Skip out on the short-term luxury of self-pampering and save more the life-changing luxury of long-term travel.
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Get fewer haircuts
If you get a haircut or cut and colored once every two months as opposed to once every month, you’ll save 50% and probably still look just fine. Considering the cost of hair care, over the course of a year this could really add up. Of course, stick to a simple style that a friend can trim for you for free, and you’ve got 100% savings.
Cut back on fancy coffee drinks
Eliminating coffee from your life just might be impossible, and coffeeshops are an essential place for many people to socialize, study, and work at, but that doesn’t mean you have to spend a fortune on caffeine! Think drip coffee instead of that ultra mocha grande with extra espresso shots. Paying $2 instead of $5 every day could save you $1,095 a year!
Check out this cool coffee cost calculator and see what that caffeine is costing you!
Buy second-hand clothing
New clothes are expensive and passé! Thrift stores and vintage/second-hand clothing shops are the new cool. You can usually save the greater part of 75% over their new counterparts and still look cute. When you need to dress well for business or formal occasions, scope out the bargain/reduced racks or shop online rather than in the full-price sections at expensive brick & mortar stores.
Stay in at night
Going out to bars and clubs will force your account balance to go down faster than a Swiss cheese boat…with only a headache to show for it in the morning. Keep your travel goals in mind and invite your friends over for drinks. That $8 bottle of wine would’ve cost $25 at the bar!
Do Free Things
- Get University educated – The website Open Culture has assembled a giant master list of free online courses on everything from Art History to Quantum Mechanics from great schools like Stanford, UC Berkely, and even Oxford!
- Get non-university educated at Khan Academy or Tedtalks.
- Check out the online repository of videos of academic courses at Ivy League schools like Yale, Harvard and Stanford at Academic Earth. The only thing it doesn’t have is Skull & Bones.
- Learn to code – hello Codecademy!
- Volunteer for a local charity.
- Play sports: you know, cycling, tennis, basketball, soccer, etc. Find recreational teams in your area.
Bonus tip for saving money: keep your distance from financially irresponsible people!
Watching your friends go out every night to buy expensive electronics, pricey cocktails, and new boots will destroy all your hard-won motivation. So just don’t. But don’t let your dogged determination to save for vacation make you into your friend group’s party pooper: you can save for travel, and still let loose every once in a while.
But don’t let your dogged determination to save for vacation make you into a party pooper, either: you can save for travel, and still let loose every once in a while.