Start Saving Money For Travel Today

Saving money for long or short term travel can be difficult, especially if you’re like most people whose paycheck completely evaporates by the end of the month. Or worse, you’re in the red.

If you’re in this situation, you’re thinking the only way to find money for travel is to win the lotto, turn to a life of crime or sell a kidney on the black market. While those are interesting options (we’ll call them plan C , D and E), let’s start with some practical steps to managing your budget.

Money Management 101

Welcome to my Money Management 101 class. The first question any financial adviser asks their clients is, do you know where your money goes?

Most people will probably say yes.

Sadly the truth is, most of us don’t know where our cash goes because we don’t keep track of our daily spending. Sure, we know what our major monthly bills are, but do you know how much you spend on smaller impulse purchases?

You should.

Over the course of a year it adds up to big numbers. So the first step to saving is to follow the money and figure out where it’s going.

  • Start An Excel Tracking Sheet:

    “Ignorance isn’t bliss”

    For the next month track every single daily purchase you make. Enter this information into an Excel sheet (along with your standard monthly bills). By the end of the first month you’ll have a clear picture of where your cash is going. Analyze the numbers, and answer these questions. How much are you spending on subscriptions and memberships? Eating out? Clothes? Electronics?  You might be shocked. The good news is, with this information you’ll be armed with what you need to turn things around.


Basics Of Saving

This is the hard part. In front of you, in the excel sheet, is a clear list off  what you’re spending your money on. You need to take your red pen and start slashing unnecessary expenses. This is where you decide what’s more important, travel or your daily splurges? Here are some tips to help you reduce your monthly expenses:

  • Create A Budget:

    “Money is not the most important thing in the world. Love is. Fortunately, I love money”

    This is the attitude that you need to take when creating your budget. Your love of money needs to exceed the need to spend. Take your excel sheet and do the following:

    • Categorize Expenditures: Group your expenses to make it easy for you to see where your problem areas are.
    • Set Spending Limits: You need to set limits on what you’re allowed to spend per expenditure group. Push yourself to identify what’s your basic needs are per month, then set that as your spending limit.
    • Use Cash Only: Work on an envelope system, keep one envelope per category. In each envelope have the your budgeted cash for the month and keep your cards at home. It’s a proven fact that when people spend with cash they’ll stop and think before making purchases and are less likely to make impulse purchases. Plus having this envelope system in place will be a daily reminder of your spending limits.
  • Reduce Expenditures:

    “Beware of little expenses. A small leak will sink a great ship”

    All expenses on your sheet need to be assessed. No matter how big or small the expense. Overtime all savings add up.

    • “Need” vs “Want”: Look at each expenditure decide what is a “Need” vs “Want”. Get rid of the “Want”s or reduce them significantly. Look especially hard at recurring membership fees, as much as possible reduce or get rid of them. For example:
      • Replace your cable with Netflix or another streaming services which are much cheaper.
      • Most people don’t use their gym membership, if you’re one of them cancel it.
    • Cheaper Alternatives: After eliminating the “Want”s from your budget. See if you can reduce the cost of the “Need”s
      • Are there discount stores you could be shopping at rather than name brand stores?
      • Get used to shopping when there are discounts or sales.
      • Learn to love couponing. This can significantly reduce your grocery bills and online sites like could be a great resource to save on other day-to-day purchases.
  • Embrace living simply:

    “The simple things in life are free”

    It’s true, living simply is cheaper and will leave you feeling happier. You’ll be more relaxed when you’re not chasing the same things everyone else is. You don’t need the latest gadgets, name brand clothes and you don’t need to go out every night. Keeping it simple will declutter your life significantly.

  • Enjoy The Free Things In Life:

    “Smile, it’s free therapy”

    During my travels I’ve found most cities had free activities to enjoy. Do some research and find out what’s available in your town and learn to enjoy them. Go to the parks, beaches, museums or public fairs and festivals. You’ll save money and get to know your city a little better.

  • Keep A Separate Travel Account:

    “Out of sight, out of mind”

    With the excess cash that you’re now saving, have an automatic transfer move the money into a travel account. Keeping it outside of your checking account will reduce the temptation to spend it. You’ll be amazed over a short time how much money you’ll save.


Generate Extra Cash

One you’ve gotten your spending under control you should also work on improving your cash flow. Below are some suggestions on how you can supplement your income:

  • More Hours Or A Side Job:

    “Idle hands are the devil’s workshop”

    The quickest way to save more money is to work more hours at your job (if you are hourly employee) or to get a side job. Look at your skillset and see if there’s anything you can leverage for freelance work. Alternatively you can look at getting a part time job at a retail establishment.

  • Sell Items:

    “Clear your stuff. Clear your mind.”

    Take stock of your belongings. Do you need everything that you have? Are they just sitting in storage or in the back of your closet? Anything that you’re not using or no longer need should be sold.

  • Invest:

    “Economics is all about consumption. People either spend money now or they use financial instruments – like bonds, stocks and savings accounts – so they can spend more later”

    Now that you’re saving money, you need to make it work for you. One great way is to invest in low cost index funds. While there’s a risk of market volatility, if you invest small amounts over a period of time, this will hopefully even out market risks. But the with your saved money generating income, you’ll should reach your money goals sooner.

Start your year on the right foot and start saving. The sooner your adopt this  mindset, the sooner you’ll be able to travel.