How To Save Money For Travel

Want to learn how to save money for travel? Whether you’re planning a trip for a two weeks, a few months, or a year, with a little effort and some dedication, you can develop a plan to save enough money to make it happen. I spent 14 months traveling after creating and executing a savings plan and I’m so glad I did it. My adventures were amazing! It was definitely one of the best 14 months of my life. Yes, the saving part was hard, but it was worth it. There are a zillion things competing for our dollars (now more than ever), making it seem impossible to save money, but spending time to become familiar with your spending habits, evaluating key places to reduce expenses, and then implementing them, works! My guide on how to save money for travel will help you make your dream trip a reality.

Getting Started

The best way to begin is to start creating a detailed list of your expenses versus your income. If you’re already doing this, it’s even better, but it’s okay if you’re just starting. A solid month of detailed expenses will help you to start seeing patterns and opportunities, although several months is even better. Especially if you want to save for a longer trip.

There are a variety of apps available to detail out your daily expenses. Look for apps that have categories to differentiate expenses like food, utilities, insurance, clothing, household items, healthcare, streaming services, gym memberships, etc. This is nice for sorting by category. Obviously, It’s best if they are free.

My favorite free app for expenses is a little limited, as you can’t add income, but I love its simplicity and the ease of tracking my expenses. It’s called Tripcoin. The nice thing about starting with Tripcoin is that it’s also nice to use while you are traveling, so all your expenses will be in one place. If you have another you prefer, however, that is fine.

I create what are called “Trackers” in Tripcoin. I create a monthly one for fixed expenses like healthcare, utilities, internet, and insurance, these are generally about the same every month, except for a few categories like utilities, and one for variable expenses, or regular daily expenses. Between the two, you should list all your expenses.

Start with the budget or income you want for that tracker, and input every purchase as it occurs, by category. If you don’t know the budget dollar amount yet, that’s okay. You’ll still get a summary amount, it will just be a negative amount in Tripcoin. If you do add a budget, the total will be your savings for that tracker.

Fixed Expenses

Fixed expenses include your rent/mortgage, home association fees, or dues, utilities, cell phone costs, internet, any membership fees, streaming services, and health, car, and home insurance, things like that.

As these expenses (usually) occur monthly, any savings here will repeat monthly, so they can add up quick. I suggest some places on where to cut expenses below.

Do you really need a monthly gym membership? Or, can you get your exercise outside by running, walking, hiking, or riding a bike? Or look into using free apps, or social media videos for your workout. 

Do you really need multiple streaming services? These can add up quickly as many people have several. For example, if you have 4 streaming services, you could be paying $75 or more a month. Cutting down to services that show ads (not ad free), or just cutting back on the number of services can easily save you over $50 per month.

Is your cellphone service plan too expensive? Look at basic rates, prepaid plans or discount plans like Mint Mobile for cellular service, which you can get for as little as $15 a month.

Can you reduce your rent or mortgage? Look at living somewhere less expensive or rent out one of your rooms to someone else. If you plan to travel for a long time, say 6 months to a year, maybe it’s better to rent a room in someone else’s house until you go. Then you will not have that expense while traveling. This one can save you big dollars quickly, but can also be a little more challenging to implement. This one is for those with serious saving goals.

Utilities are another big bucket to examine. Can you turn down the heat or air conditioning? Especially at night and when you’re not home. Do it manually, or invest in a programmable device. You can even manage most of these from your cell phone.

Can you drive a less expensive car? If you drive a high-end vehicle, consider something more economical. Premium car brands can cost double or triple the amount monthly.

Insurance costs can really get out of control. Plus, sometimes, if you’ve been with an insurance company for a while, they raise your rates, thinking you won’t quote with competitors. This is something you should quote with several carriers annually. You will be surprised how much you can save. Don’t try to save with lower coverage though, as this could end up costing you more if there is an issue.

Talk to friends in your area to see if they get a better deal. Research who is best and quote with multiple companies. I recently did this and cut costs by over $500 a year.

As an an example, let’s say that after revising this, you find a way to reduce your cell phone bill by $35 a month, streaming service costs by $50 a month, eliminate your gym fee of $40 a month, reduce your electric costs by $25 a month, and reduce your insurance costs by $400 a year by switching carriers. This will help you to save $2,200 a year. This could be enough for a two week vacation in a less expensive city.

Need to cut even deeper? Look into the options of renting out a room in your apartment or house, or renting a room in someone else’s. You can easily save $1,000-$1,500 a month here, or $12,000-18,000 a year. Add in the savings above and this is almost $20,000 a year!

Variable Expenses

Next look at your variable, or flexible expenses. These are the costs that (usually) fluctuate, or vary, over time.

Examples of Variable Expenses 

Some variable expenses include food, clothing, entertainment, gas, car maintenance, home accessories, beauty or grooming products, alcohol, healthcare copays, etc. Each one of these is another opportunity to cut costs and increase savings.

Eating out easily costs many times more than cooking at home. And eating at home is usually healthier. Let’s say you normally eat out twice a week, that can easily cost you $500-1000 a month, while cooking at home can cost substantially less. If you add alcoholic beverages into this, there’s even greater potential for savings.

Alternatively, do you need expensive cuts of meat? Or can you eat more on chicken, eggs, or tuna? Consider more meatless menus. There are a ton of tasty vegetarian recipes out there right now. Can you skip the cocktail or glass of wine?

Make more expensive options, or eating out, a treat, rather than a routine.

Entertainment is a discretionary category and can be a big expense if you do a lot of it. Do you really need to see that expensive concert? Going to the movie theater can be really costly, especially if you add in popcorn and a soda. Some hobbies can also be expensive. Consider looking at ways to do these at a lower cost.

Focus on low cost entertainment for a while, like hiking or entertaining at home, rather than more expensive options.

Clothing, grooming, or beauty products, and home decor are other variable expenses that can add up quickly. As they may occur less regularly, they are sometimes harder to estimate.

Do you really need to buy a new outfit? Can you be creative with something already in your closet? Or buy something used off Poshmark that’s still trendy.

Are you buying expensive health supplements? Consider just eating healthier for a year to save money here.

Cut out expensive beauty products. If you talk to your dermatologist, they can give you some great, budget products that still keep your skin and hair healthy. Plus, if you’re eating healthier and drinking less, you probably look, and feel, better already.

Do your own maintenance around the house. Painting yourself is a great, low cost home improvement option. Take care of your own lawn, shovel your own snow, fix small things yourself instead of hiring a handyman. A little,effort here can add up to good savings.

Look for lower cost auto repair shops rather than taking your car to the dealership. I’ve had the dealership tell me I needed expensive repairs that my regular shop disagreed with. Plus my shop would have been less expensive if I did need those repairs. Go one step further and buy parts yourself from an auto part store that also installs them for a low cost, or free, like Pep Boys or Auto Zone.

These categories can take a lot of will power, as we’re sucked into them by marketing and wanting to keep up with trendy items our friends have. It is freeing, however, when you realize you really don’t need a lot of this stuff.

If you are determined, you can cut several hundred or more a month from variable expenses, or several thousand a year. Let’s say you cut clothing purchases by $100 a month, beauty products by $75, cut back on eating out and start fixing things at home, you can easily save $8,000 or more a year.

The closer you cut to the necessity level, the more you will save. Don’t cut too deeply, however, as you may get too frustrated and give up. You need to find the balance that you can comfortably live with.

Estimate Your New Savings

Sum up your fixed and variable expense savings to get your total savings. See the section below on How Much Money Should I Save For Travel to see if you have enough. If it’s not enough, go back and cut more.

If you still need more savings review the list again. And if you feel you can’t cut any deeper, consider other income opportunities. Sell items you don’t use anymore. Can you work towards a promotion? Take a new Job? Or take a side job or freelance work?

When you’ve finally found a number you feel comfortable with, start implementing it. Your method and intensity will vary depending on where you want to go and how long you want to travel for.

How Much Money Should I Save for Travel?

How much money you need to save for travel depends on the type of travel you want to do, what type of accommodation you want, and how fancy your meals and entertainment will be. 

If you focus on low cost, less touristy destinations, stay in Airbnbs, or hostels, use local transportation, eat out minimally, and stick to budget, or free, sightseeing options, you can estimate on the low end, around $85 to $100/day. Doing this at mid-range hotels, restaurants, and destinations will cost you closer to $150 per day. More expensive destinations can cost $200 a day or more. Think about where you want to travel and the types of hotel or restaurants you want to eat at. Research the costs and create a budget.

If you target travel costs on the lower end, around $100 a day, one month of travel will cost around $3,000 (100 x 30). Longer term travel may cost less per day, as you will be amortizing your flight expense over a longer period. If you plan to spend $200 or more a day, your savings need will be double.

Read travel blogs to find the best spots to visit and associated fees. Research how to find low cost flights to get the best deals in flights as this is usually a big ticket item.

Other Tips To Save Money For Travel

Stay Inspired

Keep a picture of your dream destination(s) on your office wall, refrigerator, bathroom mirror, phone, or even in your wallet. Something you look at often. Seeing that inspiration will help when your resolve weakens. 

Note your savings on the image or a Post-it note. Count down the months, or weeks, left to hit your goal to keep yourself motivated.

Shift your focus from a negative to a positive. Focus on your savings, rather than on what your not spending. This subtle mental shift can make a big difference.

Finally, open a special travel savings account so you can watch your savings grow!

Delay Purchases

One of the things I do is if I see something I want, I hold off a week or two from buying it. If you’re doing this with multiple items, you can space out your purchases, spending less in the long run.

It may seem silly, but it helps. And if you forget about that item, you didn’t really need it.

Cost Per Day

Look at your expenses on a cost per day basis, rather than an annual expense. This is a really important tip in helping to save money for travel. At least it really helped me.

For example, if your target spending is $36,000 a year, that’s roughly $100/day. It’s much easier to wrap your head around spending $100/day than $36,000/year, as you can visualize it in your head easier. Plus, if you’re plugging your expenses into an app, you will be able to see your daily total. If one day is $150, that’s fine, try to make the next day $50, so it averages out.

In addition, once you’re used to seeing and thinking about your expenses on a daily basis, making decisions on discretionary expenses becomes much easier. You can quickly see how something as simple as a $10 cocktail, a $17 burger, or a $50 facial moisturizer sabotages your daily savings goal.

Also, look at your savings as a daily amount. If your goal is to save $10,000, divide that by 365 days. It’s $27 a day. Knowing that your goal is to reduce expenses by $27 a day makes it much easier to hunt for places to do so and reduce temptation. Also notice that that’s the cost of the cocktail and the burger above. Two seemingly small things that add up to a $10,000 savings!

Automate Your Savings

Automate your savings by setting up an automatic transfer into your savings account after each paycheck. The faster you see it build, the more you will be motivated.

Minimize Bank Fees/Maximize Rates

Research low cost banks to reduce fees. In fact, there’s no reason you should have any bank fees! Understand your bank’s minimum account levels or use on-line banking, which usually offer no fees. Nerdwallet is a great resource of low fee banks.

Likewise, also research who has the best savings and CD rates. They may/may not be the same bank. Online banks usually have much higher savings rates than the big banks do. Bankrate.com is a great source for this.

Research Where, & How, To Purchase

When you do make purchases, research the best place to buy with an internet search. I love Google Lens. Just take a photo of the item you want and it will provide a list of the same or similar items at various costs, and tell you where you can buy it.

Look into credit cards that offer cash back or flier miles. Nerdwallet and Bankrate, have great overviews. I use my credit cards for as many purchases as I can, then pay them off monthly. By doing this, I earn money by using them, rather than paying banks interest. Credit card interest can really spiral out of control, so avoid this at all costs.

Use Raises, or Bonuses As a Savings Tool

Any time you get a raise, or a bonus, move that extra cash to your travel savings immediately. You’ve lived off that money before, so do it longer and reap the rewards.

Don’t Forget To Think Long Term

Don’t be shortsighted in your goal to save money for travel by forgetting to look at costs over the long run.

For example, renting, or leasing, is more expensive long term. Yes, it costs more up front to buy, but over time, the savings offset the initial outlay.

It’s also important to be putting aside money for retirement, preferably through a 401K. This is best started this when you’re young to take advantage of compound interest, so do not skimp here.

Most employers match your contribution into a 401K up to 4 or 6%. This is FREE money. Take full advantage of it! In fact, I strongly suggest you put in more. These dollars really add up over time.

I started investing right out of college, even though my initial salary was low, and it’s definitely paid off as I retired early and now travel about 3 months a year.

A great book on investing wisely is The Little Book of Common Sense Investing. It’s written by John C. Boyle, the founder of Vanguard, one of the largest investment companies in the world. I wish I had learned this earlier.

I can’t say enough about Vanguard. I’ve been investing with them for 30 years now and their low cost investing philosophy is one of the reasons I’ve been able to retire early and travel.

Summary

Although it can seem intimidating at first, once you follow this guide, it’s easy to put together a plan to save money for travel. Plus, once you start, if you make the changes into permanent lifestyle changes, you can focus on long term travel!

At the same time, make sure your expectations are realistic. Don’t sweat this too much. Forgive yourself when you can’t reach your goals. Re-adjust and move on. It happens!

Do you have other ideas to save money for travel? If so, add them in the comments below.

Safe Travels!

Julie