Do you dream of taking an extended break from work to travel, but wonder how you could ever afford it? If so, you’re not alone. Of the many reasons people decide not to travel, the financial barrier is right up at the top of the list.
However, by applying some simple principles and actions, you can achieve your travel dream without altering your lifestyle as much as you think. In this article I outline a manageable strategy for saving money to travel based on what we have learned from our own experience of saving for a travel career break.
Our mission is to provide everyone with the tools and knowledge they need to take a career gap, because we think it’s a great way of actually enhancing your career and becoming a better employee.
“A year from now you will wish you had started today.” – Karen Lamb
Establish your savings target
Before you can formulate an effective savings plan, you need to have an idea of how much you will need to save overall for your travel career break.
You may not have a firm idea yet of how long you want your trip to be, or where you want to go. That’s perfectly okay. I would suggest reading our six-step guide to making your travel career break a reality.
A travel career break doesn’t have to be a specific length of time. We took a year out, but some people take just a couple of months, and others multiple years. Think about what you want to get out of your travel career break, and what will fit best with your circumstances.
To give you an idea of how much it costs to travel the world, take a look at our breakdown of what we spent on our travel career break. Keep in mind that everybody has a different travel style, though, and you may be able to get by on much less. This TED talk by Tomislav Perko discusses ways you can travel with almost no money at all.
We found Budget Your Trip to be an excellent tool for planning our round-the-world travel budget. It provides estimates for what you can expect to spend in destinations all over the world, with different costings for budget, mid-range and luxury travel.
Once you have established an overall figure, you can make better-informed decisions about how and where you will make savings.
Set incremental goals
Once you have an overall figure in mind and an idea of when you want to take your travel career break, it may be tempting to just divide the figure by the number of months you’ll be saving for, and set that as your monthly target.
“It’s more likely than not that your spending power (and thus saving power) will grow over time.”
In our experience, it’s much better to set incremental savings goals that start smaller and build up over time. The chances are that it will take you a while to adapt to the saving lifestyle. It will be tough at first, but you will get better at it. Taking an incremental approach allows you to ease yourself in, and then ramp things up as you discover the savings tactics that work best for you.
Here’s a working example. Let’s say you’ve decided you want to save $9,000 over three years. This divides neatly into $250 per month. However, a better strategy might be to begin by saving $100 a month, and work up to $400 a month towards the end.
It’s more likely than not that your spending power (and thus saving power) will grow over time. You may get a promotion or a pay rise at work; you may find other ways to increase your income. As this happens, you can gradually raise the savings bar in accordance with your means.
Create a monthly budget sheet
Before getting into the nitty gritty of savings techniques, it’s important to have a mechanism for planning and monitoring your spending.
A monthly budget sheet will enable you to see the big picture in one place. (It’s most likely that your costs will be managed monthly, but if another time period works better for your planning, then go with that.)
Create a spreadsheet that details your monthly income and outgoings. Keep your essential living costs together in one column – things like rent, bills, food, transport, and your monthly savings goal. The remainder is your disposable income. We’ll get onto that next.
Plan your monthly disposable income
It’s not realistic to expect to get by with no disposable income at all. While it’s tempting to save as much as is humanly possible, you’ll probably end up burning out if you try. Allow yourself some flexibility with your saving.
If you make a plan each month for how you will use your disposable funds, it will make it easier to be disciplined with your spending. Use your monthly budget sheet to understand and plan your monthly disposable income.
At the start of each month, write down everything that’s coming up. Birthdays, social events, clothes you might need, anything that’s going to cost. Estimate an amount for each. It’s a good idea to allow a buffer of 10% or so to allow some wiggle room.
If this isn’t adding up – if you’ve set your saving sights too high – then you can revisit your goals and make realistic adjustments. As I’ve discussed, it’s fine to start small, in fact it’s optimal. The steps outlined below will help you find ways to go further with saving.
Open a savings account
Before you press ahead with saving, you should open a savings account (if you don’t have one already). Not only will this help you to manage your money and track progress, it will also provide an additional source of saving. For example, over the five years it took us to save for our trip, the interest on our savings account built up enough to cover our travel insurance.
Don’t rush out and open the first savings account you find; take plenty of time to compare what’s available. Speak with your current bank – it’s possible they may be able to offer a favourable savings rate for existing customers.
As I’ve discussed, it’s useful to have an idea of your overall savings target before you begin this process, as it may help to guide your decision. Potential savings account providers may ask questions about how much you are planning to save. If you’re armed with this knowledge then you can make a clearer assessment of the saving product that will work best for you.
Review your bank statements
Now it’s time to get into the details and figure out how you are going to make savings. It’s best to begin by looking at your current spending habits.
Take a look at your recent bank statements. I mean, really look at them. Go through your expenditure line by line, and look for things that you can easily cut out in future. Did you really need that last drink? That late night takeaway? That monthly subscription? That particular brand of food?
Think about what’s important to you, and start by cutting out the things that are least important.
We have found, from our experience of saving for so long, that material things are the least important to us. When we’re saving, we lean towards spending the little disposable income we have on experiences rather than things – we feel it makes our lives much more enjoyable and fulfilling.
Here’s another TED talk, this time by Luis Vargas, that argues you can have a much more enriching lifestyle by focusing your money on experiences.
“Incredible change happens in your life when you decide to take control of what you do have power over instead of craving control over what you don’t.” – Steve Maraboli
Sell stuff that you don’t need
The next step – and this can be brutal at first – is to take a look at the things you already have, and think about how much you really need.
Be ruthless. If you have anything that you just don’t use or you think you could live without, then consider selling it. Stick it on Ebay or take it to a jumble sale. You can put the proceeds towards your career break travel funds. As a rule of thumb, if you’re not sure whether you need something, then get rid. You’ll soon forget you even had it.
We didn’t fully realise how much unnecessary stuff we had until we got back from our travels. We had a big clearout before we went, selling some things and giving others away to charity, but we still put a lot into storage.
Living from a backpack for a year made us realise that we still had far more than we needed. One of the first things we did when we got back was to throw a load of clothes and kitchen stuff away. We’ve been living in our new place for a couple of months now and we still haven’t taken everything out of storage.
Create weekly meal plans and shopping lists
One of the spending areas with the biggest potential for saving is food. In the UK it is estimated that the average household loses £470 per year in avoidable food waste.
You can be savvy with your food spending by planning meals in advance. We find it easiest to put together a meal plan each week, from which we create a shopping list. We get most of what we need in budget supermarkets.
By planning our food in this way, we’ve been able to save a significant amount of extra money and avoid being wasteful.
Consider moving into a cheaper property
This suggestion is entirely dependent on your current circumstances. It might be that you’re already living in a cheap property, or maybe you own your house and it just wouldn’t be feasible or sensible to sell/move.
When we started saving for our travel career break, we were living in rented accommodation. When we both got new jobs, we had to move. This gave us an opportunity to reassess what we really needed from our home.
We made a decision to live in a lower-cost area in order to save more. We knew it would be a temporary situation, and that we would be able to upgrade after our career break if that’s what we wanted. For the three years we lived there, Lisa had to commute for three hours per day to get to work and back. These are the kind of compromises you will have to make, so be sure that you know why you’re doing it and when it will come to an end.
Once again, though, travel has changed our perspective on this. We’re now happy living in a smaller place in a slightly less desirable area if it means we can travel more in the future.
Look for discount deals
Let’s talk about disposable income again, and how you can get the most out of it. Even if you have very limited funds available each month, you can make your cash go further by seeking discount deals on experiences and activities.
There are several websites and services that offer voucher deals. Our go-to is Groupon. As a rule, we treat ourselves to a meal out together once a month, and we can do this while saving by finding Groupon deals for local restaurants.
There’s a lot more than dining deals available too. Whether it’s cinema, gifts, home products, gadgets or whatever, you’ll probably find a discount on Groupon.
Use a Revolut card
Before we set off on our trip, we each invested in a Revolut card to manage our money abroad. Revolut is a digital bank that saves you money when abroad as it doesn’t charge for withdrawals up to a certain amount each month.
It’s also got some great in-built features that helps to manage your money, such as quick top-up, segmented budgeting and instant spending notifications.
Since returning from our travel career break, we’ve found that Revolut is also a great tool for saving. Its ‘save your spare change’ feature rounds up every payment you make to a whole number, and the spare change is stashed away into a savings vault. It’s surprising how quickly this can build up!
With these straightforward tactics you have everything you need to start saving for your career break travel adventure. What are you waiting for?
If you enjoyed the TED talks I highlighted in this article, take a look at our compilation of TED talks to inspire your travel career break.
Let us know in the comments below if you have any great savings tactics, no matter how small.
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