This is part of a week-long “Money Smarts for Travelers” series. If you want to see more about planning the trip of a lifetime, please sign up for my newsletter to get monthly emails with exclusive updates, stories and offers. Friends don’t send friends junk mail, so I promise I won’t spam you!
Everyone and their mother knows that saying “no” to that latte in the morning and going out to eat less on the weekends will help you save money for travel later. It’s obvious that getting an extra job on the side will give you an income to put away. But it doesn’t exactly take a genius to come up with that kind of simplistic advice. I don’t know about you, but I’m not a daily latte buyer or a chronic restaurant aficionado, so many advice columns don’t really affect me or help me save money. I didn’t save $11,000 for travel by cutting out a beer here and there.
Earlier this summer, I picked up a book called I Will Teach You To Be Rich by Ramit Sethi and I highly recommend it to anyone (especially young people) trying to learn how to save and budget money in a way that will help you in the future. While his advice is tailored to the full-time young professional, his message is clear – save money on things you don’t need so you can spend on the things you love. I highly recommend this book if you’re new to personal finance. It definitely taught me an important lesson in organizing my life.
Sethi’s book got me thinking about how I can incorporate his ideas into my life on a smaller scale. Saving for retirement is obviously very important, but how can I take this idea of allocating money and implement it in other ways in my life? Thus began the inspiration for this post.
But let’s cut to the chase, shall we? The real reason why it’s so hard to save up these days is because, as college students and recent graduates, we’re never formally taught how to save money and grow our finances. There are so few helpful resources out there to help young people save up for the things they love, whether that’s travel or something else. So it’s time to stop wasting time on advice that isn’t useful, and start actually taking action to save for that big trip you’ve been dreaming of!
1. Document your expenditures.
There’s a reason why I decided to make this the first tip on the list – it’s actually extremely important. Documenting where your money is going (and coming from) is important so that you can keep track of your spending habits. If you’re a tech lover, there are a bunch of good apps that do this, like Mint. If not, a good old spreadsheet or even a pen and paper will do. Just make sure you’re documenting how much you’re spending, so you’ll be able to see when you’re spending too much.
2. Get the right credit card (and be responsible).
This probably sounds counterintuitive, right? I’m sure a lot of people have told you that getting into serious credit card debt can ruin your life, and that is 100% true. However, if used correctly, credit cards can actually help you build your credit score and, if you choose the right card, they can help you earn valuable airline miles or hotel stays just be paying for things you would have bought with a debit card. The Points Guy is a great resource for choosing a travel credit card that works for you. The trick to having a credit card is to pay it off immediately. Don’t wait because it does add up and accrue interest very quickly, and it’s too easy to spend more money on a credit card than you actually have. But, if you document your expenditures and pay off each one as soon as you can, then it’s hardly any different than using a debit card or cash.
3. Drink water. Lots of water.
You’re probably thinking, this is starting to sound like one of those lame advice articles again… But no! Bear with me! Water is free in most restaurants and bars. It’s also a very low-cost utility at home. Therefore, if you are ever thirsty, drink water. Not soda. Not beer. Not an expensive latte. Drink water from the tap or, if you’re a little wary of the public water, get a cheap water filter and drink from that. Why spend money on something you can get for free? There’s an added benefit of drinking water that isn’t as obvious. According to scientists, drinking lots of water throughout the day, and especially before meals, can help you feel fuller and eat less. This means your groceries will last you longer, you won’t spend unnecessary money on drinks and food, and you’ll be more hydrated and overall healthier. There’s always a huge glass of water within eyesight at my house.
4. Be an extreme coupon-er.
What do you think of when you hear the word “coupon”? An old lady clipping coupons from the newspaper? A chaotic mess at the checkout line? Well, in this day and age coupons come in all forms. You can find coupon codes online for almost anything you’d need to buy, and usually if you enter your email address into a store’s database, they’ll send you some kind of introductory offer coupon. Another aspect of being an extreme couponer is looking and waiting for sales before buying. For example, there was a chair I really wanted from a fairly expensive furniture store. Since I work at home a lot of the time, I thought it would be a good investment. As tempted as I was to buy it, though, I decided to wait and see if there was a sale. Sure enough, just a week later the store had a 20% off sale and I ended up spending a lot less on it than I would have if I’d bought on impulse. On that note…
5. Eliminate impulse buys.
Never buy the first thing you see. Whether you’re looking for a flat screen TV or a roll of paper towels, don’t just go directly for the first available option. Research is key. Research can be as simple as rounding the corner of the grocery store and comparing all of the paper towel brands and prices before deciding on one. It can be going online and looking at reviews of flat screen TVs. Asking friends and family what they recommend is always a great strategy. But don’t ever buy the very first thing you see, because usually you’ll end up losing money that way. Get in the habit of making informed decisions and you will be better off in the long run.
6. Craigslist is your friend.
Did you know you can find basically anything (save for food and toiletries) on Craigslist? For ridiculously cheap prices? There’s everything from couches for less than $50 to TVs for over 50% off. Sometimes you’ll get lucky and find something really valuable for FREE! Before making any big purchase – furniture, electronics, anything – check Craigslist to see if you can get it for cheaper. You probably can.
7. Share a bedroom.
Shared quarters might remind you a little bit of a painful experience with a sibling or a college roommate, but it doesn’t have to be that way. Finding a close friend or family member who is willing to share a bedroom with you can help you cut your rent and utilities in half! And if you share one bedroom in a larger house with other people, you can save even more money. If you like your privacy, mirrors and folding room dividers are an option, and designating “sides” or “areas” can help you organize your space effectively. Sure, you might be cramped for a little while, but just think of it this way – when you travel and stay at hostels, you’re usually sharing a room with 3-20 people. Sharing with one person doesn’t seem so bad now, right?
8. Open a savings account.
You’d be surprised at how many people say they want to save money for travel but don’t even have a savings account! Online high-interest savings accounts are free to open and most don’t have a minimum balance necessary to open the account. I use the Barclays Online Savings Account and love it. Having a savings account helps you put your money where it’s less accessible to you on a daily basis, and can also give you a little bit of an extra boost in savings through interest accruals. Though the interest is usually pretty small, it’s better than nothing, and at the very least in a savings account you won’t be tempted to withdraw your money and use it for things that are not travel.
9. Sell your unnecessary things.
If you’re not using something often enough to justify having it, then you should consider selling it. For example, I had an iPad that I never touched. For months it collected dust on my shelf until I finally decided to sell it. And you know what? The $250 I got from the sale went a lot farther than having a dusty iPad on the shelf. Think about the things you don’t need anymore, and put the money you get from selling them towards a trip that will change your life. Yard sales are a great way to sell household items, clothes, and simple electronics.
10. Cut the car.
I live in one of America’s most widespread cities, and yet I’ve found a way to get by without using a car. Public transportation rocks, and for those of you who think otherwise, try it out for just one week and see the difference in how much money you’re spending. Cars are expensive, not only the actual cost of the vehicle but with maintenance, gas, and parking, it can cost almost as much per month as rent. When I was choosing an apartment, I decided on one that’s right on the metro line so that I could get to and from work without having to drive.
11. Choose where you live very carefully.
If you’re going to try and live without a car, you need to be living in a place that’s fairly accessible, either by walking or public transportation. Find an apartment that’s close to work, to grocery stores, and to friends’ houses so that you can get around without having to drive. This way, you’ll be able to justify not having a car because your own two feet (or two wheels, on a bike) are sufficient.
12. Be strategic about your grocery shopping.
There are some general rules I always stand by: don’t go grocery shopping hungry and don’t go without a list. Doing either of these things will likely result in you buying more than you need. Nothing smells more like wasted money than rotting food in the fridge, so be sure to only buy the minimum amount of items you need. It’s better to stick to this strategy and go to the store multiple times a week than to buy too much and waste money not eating it.
13. Hoard free things.
If something is free, take it. I haven’t bought napkins since I moved into my apartment because napkins are always free for the taking at every fast food restaurant, bakery, and bar you could imagine. If you travel for business, take the free toiletries home with you. Reuse plastic and paper grocery bags instead of buying trash bags. You get the gist. When you take advantage of all of the free things that you can, you save a surprising amount of money. Just think, every dollar you save by not buying toiletries is a dollar you can use to buy a steaming hot plate of pad thai in Thailand! Not too bad, eh?
14. Repurpose stuff.
Almost everything you have in your home can be used to serve multiple purposes. We have glass jars used for storage and as drinking glasses. We’re using a tupperware container as a coffee table and also as a night stand. Everything we do decide to keep in our house has a purpose. And if it doesn’t, then we give it one. When you repurpose things and get creative about their uses, you can save a ton of money.
15. Borrow from friends.
I depend on my friends for a lot. I’ve borrowed blenders, cooking pans, tools, cameras, and even cars from my friends when I was in need. In turn I’ve cooked them dinners, helped edit their resumes and writing, and given endless travel tips. It all goes in full circle. If there’s something you need for a one-time use but aren’t able to buy it, ask around! Maybe one of your friends will be happy to lend you theirs in exchange for a few beers.
16. Get creative about making money.
Do you have a specific skill or interest that could potentially make money? Why not try advertising to friends, family, and even acquaintances? For me, I love portraiture and enjoy taking photos and making a little bit of money on the side. I also tutor middle and high school students in my down time. At any given time during college, I had multiple income streams from a variety of different jobs. And it helped me pursue my passions while making a little bit of money. Try engaging in something you enjoy to save money for your travels. When you do this, you’ll be open to working more because it is an activity you like to participate in. That, and life never gets boring!
17. Don’t be shy.
Is there something you need but can’t justify spending the money on it? Ask for it. Although sometimes asking for a discount or for help may not yield anything, sometimes the results are surprising. For example, I was taking a road trip and I heard a strange sound coming from my car. I stopped at a car repair shop along the highway and asked for help. The mechanic there fixed my car for free! If you need something from someone, don’t be afraid to ask. There are kind people in the world and the only expectation is that you pay it forward one day.
18. Eat before going out.
I probably sound like I’m going crazy now. Eat before going out? This is actually a strategy I use all the time. I’ll eat lunch or dinner before I’m scheduled to meet with a friend at a restaurant, then I’ll order a very light meal, like a side salad, an appetizer, or a cup of soup. That way, if there are rare occasions when I want to eat out with a friend, I won’t go hungry, I won’t look rude, but I’ll still be able to save money on expensive meals.
19. Turn everything off.
Sure, it’s easy to remember to turn off the lights or the television, but more obscure things like the air conditioning, the heat, and even surge protectors can suck up electricity while you’re out of the house. Buy a surge protector you can turn on and off, and make sure your thermostat is turned off when you leave the house.
20. Be a host.
If you don’t want to spend money going out, why not just invite your friends over? Make it a potluck and have your friends bring over different drinks and dishes. Spice it up with a board game or a poker set. Having friends over is sometimes much more fun than going out, and it it much, much cheaper too.
21. Quality over quantity.
Travel isn’t the only time you should pack lighter. In life, it’s better to have fewer things that are of high quality than to have a bunch of junk you can’t keep track of. Before buying something, ask yourself about the value that item will add to your life. Will you use it every day? Will to help you build yourself or your career? Will it matter in six months? If you answered no to any of those questions, think long and hard before you spend money. By buying high-quality items, even if they cost a little more, you’ll save money, have long-lasting belongings, and be much happier in the future.
22. Generic brands are your best friend.
Based on my experience, you can save anywhere from 10-50% by buying generic brand items instead of brand names when you do your weekly shopping. Who cares if your toilet paper is a specific brand when it’s just going down the drain anyway? Generic brands cut the extra crap that comes in the form of fancy marketing, advertising, and packaging – that’s why they’re usually much cheaper.
23. Sign up for loyalty programs.
You probably have heard about frequent flyer programs on airlines and loyalty programs for hotels, but did you know most normal stores also have these kinds of programs? I belong to frequent customer programs with CVS, Walgreens, and Kroger, and it’s incredible how much money those save me on a weekly basis. Even buying things like shoes, books, furniture and clothes is cheaper with loyalty programs. Next time you’re planning to buy anything, find out if you can save money by signing up for a loyalty program. You might get a few extra spam emails, but it’s worth it for the hundreds of dollars you’ll save.
24. Cut the extras from your life.
Subscription services are the worst. Theoretically they could go on forever without you knowing, just deducting money from your bank account until you realize it, hundreds of dollars and many months later. Do you need that cable TV? What about Netflix? Magazine subscriptions? Monthly software programs? If you don’t need it, cut it off. Don’t keep paying for subscriptions you don’t use. Even if you use the subscription, see if you can slim down the number of channels or the number of issues you’re getting. Slim down on all of the “luxuries” in your life and you’ll be able to save more.
25. Set goals for yourself.
You need to save money for travel, but without a plan you won’t get far. Plan on saving as much as you can, and in the meantime research how much it will cost to visit the places you want to see. Setting monthly, semiannual, and annual goals for yourself can help you continue challenging yourself savings-wise. Hang photos or posters of places you want to go around your house, where you can see them. Celebrate when you meet a goal (but not by buying something expensive!). Make images of beautiful places around the world your background on your computer. Do anything to stay motivated to save, make sacrifices, and live frugally so that you can travel as much as possible.
Trust me, the end results 100% are worth it.
Other helpful resources on how to save money for travel:
Realistic Advice on Saving Money for Travel – Twenty-Something Travel
How to Save 20K in Less Than 2 Years – Twenty-Something Travel
How I Saved $13,000 for Travel in Just Seven Months – Adventurous Kate
How to Save Money: 100 Great Tips to Help Get You Started – The Simple Dollar
Do you have any realistic money-saving advice that works well for you? Share your tips in the comments!