Around the World Travel Advice: The savings plan

Dec 20, 2013

Saving for travel has become a way of life over the past two years. It seems as if everything we do is somehow related to or influenced by our plan to save every penny that passes through our fingers. This post explains it all so get a cup of coffee, bookmark this page and let’s get to it.


Your financial landscape – What do you owe, what bills do you pay, what do you make and what’s left over.

Get the lay of the land by making a list of all the bills you need to pay. Categorize the list by required bills (water, electric, rent, etc.) and non-required bills. If you are confused aas to  whether or not a bill is required then just imagine what would happen if you stopped paying it. If the result is really bad, then it’s probably required. Don’t get kicked out of your apartment…

Next determine what you take home after taxes and health insurance. What about your 401k contributions? Include what you might take home if those contributions stopped (more on this later).

Now, for the skeletons in your closet… debt. List out what you owe. Specifically list each debt and the balance remaining on your debt. 


Get out the axe, it’s time to cut costs – Cutting out the big obvious things. 

So this is where the “fun” begins, and by fun I mean the part where most people fail. The trick to cutting costs is to realistically think about what’s most important to you. If you find that you aren’t willing to make the necessary cuts/sacrifices, then stop reading this post.

The bills: If you’re still reading, good! Now, let’s get to work. First look at those bills that you can survive without like cable, monthly pay services like Pandora, NetFlix, etc. Don’t neglect your cell phone, chances are you can save some serious money if you’re willing to downgrade or even just limit your usage. I cut my minutes and text dramatically and saved about $40 per month. You can also look at pay as you go providers like AirVoice. 

Depending on how long it will take you to save, consider making a change to your living situation. If you own a house, consider renting it out and then renting a smaller, cheaper apartment or even sharing the living space to reduce your monthly expense. Jen and I took three years to save so I rented my whole house and became a landlord. For the first 2 years I broke even. I refinanced the loan a few months ago to a much lower rate and shorter period and I actually make money on the house now while paying less each month and banking more equity.

What about your car? I drove a 2005 Toyota Tacoma which I absolutely loved but the insurance was expensive, I owed about $7k on it and it was a fuel hog. I paid down the debt quickly (once expenses were cut) and then sold it. Jen and I were going to be a one-car family but my parents were able to loan me a mini-van they weren’t using for about 6 months. Huge cost savings all around and the money I got from the truck went right into my savings.

Lastly, STOP GOING OUT! Drinks out on the town cost money. In fact, it costs a lot of money if you do it every week. Don’t take this the wrong way; we aren’t saying stop having fun, just find ways to make your fun cost less. Maybe when you go out, you don’t drink. Maybe you hang out with friends at your place or theirs to save on the typically high costs of hanging at the bar.


Get out the scalpel – For more precise cost cutting strategies, you need to get creative.

In today’s world, most of us aren’t paying for all sorts of crap we don’t need but if you are, then hopefully we covered that above. To cut costs even further, you may need to get creative. Here are a few things to consider.

Groceries – Set the grocery budget a little tight and start cooking more meals on your own. Don’t go crazy with the cooking though. I mean, I appreciate a complex and artfully prepared meal but we are looking for efficient nutrition here, not a creation worthy of Facebook food-porn. Jen and I both spend $50 per week on groceries, which generally consists of eggs, veggies, fruit, and some proteins purchased in bulk (chicken, fish, beef, etc.). We cook big batches so we have extra leftovers for lunches and we RARELY eat out for any meal. In fact, our first meal out in 2013 was in September for Jen’s birthday.

Internet service – We kept our Internet service during our initial cost cutting phase but we shopped around quite a bit for the lowest cost. Jen signed up for a promotional deal to get high-speed Internet for about $40 per month. 

Work from home? – Not everyone can do this but I was able to. It saved on gas, allowed me to write off the expense of a home office on my taxes, and gave me more time for a second job (no commute time).

Consider what comes out of your paycheck – Ok this will be somewhat controversial so it’s not for everyone. I stopped saving for retirement (for now anyways) so I could put more into my savings for the trip. You might think it was a foolish or shortsighted move but I don’t. I have saved for retirement since I was 20 years old so I have a head start and have a decent amount saved. I look at it this way, I’m taking some of my retirement years now so this money has more value to me today then it will in the future. Not to mention, I’m not someone who has a retirement age in mind… I plan to stop working when I physically can’t. Maybe that will be sooner than later but I’m willing to run the risk to make this happen.

I also trimmed some benefits like medical, dental and vision. I didn’t completely drop them (you can’t now anyway) but I reduced my coverage. I was probably over insured for my age and good health so cutting back was easy.

Cut down on travel expenses – Bike, bus, walk, rideshare, etc. Anything to cut down those travel expenses and keep more money in your hands. I biked as much as possible and got acquainted with the bus system in Rochester (a very good one btw). This can become a fun little challenge at times and will probably prepare you for life on the road.


Increase your income – Part-time gigs, getting more out of your day job, and pinching every penny. 

It’s simple; you need to make more money. Go to and look for part-time jobs or gigs in your area. You could walk dogs, work at a restaurant, labor at a construction site, work at coffee shop, etc. I searched for jobs that were somewhat different form my day-job and that got me outside if possible. I ended up doing Valet work at Premier Parking. It was a flexible job where I could earn tips and work outdoors. Jen coached volleyball and worked at a Yoga Studio.

While it might sound a little depressing to spend so much time working, the time you are making money is more time you aren’t spending it. Plus it became routine pretty quickly and was extra rewarding when you saw the extra money that was going towards our savings.


Debt owns you, time to pay the piper – Getting rid of debt and avoiding more along the way.

Debt is a four-letter word. If you have debt like Jen and I did, then you need to get that off your back as quickly as possible. I recommend doing this before you dump money into your savings account because the debt costs more every-day. You could do both, save and pay down debt, but I recommend one then the other.

I mentioned earlier that I owed money on my truck so I paid that off first. After cutting costs, I had some money saved up and just added to that for 2-3 months before completely paying off the truck in one payment. I didn’t have any credit card debt but if I had, I would have gone after that first.

Jen had school loans. I suspect more people are in Jen’s boat than mine but my advice is the same, pay it off as quickly as humanly possible. If this delays your trip, so be it. Jen has done almost nothing but pay off debt during our three years of saving. She went from something like $30k to $0 in about 2 years, which is darn good for someone who was just entering the workforce with a relatively low income.


SAVE – Another four-letter word but a good one, like “meat” or “love.” 

When you do get out of debt or if you already are, open that savings account. Pay your savings before you pay anything else. You’ll hear this advice nearly everywhere you turn for savings advice but that’s because it’s the best. You need to add every spare nickel to your account. I highly recommend throwing together a spreadsheet, listing your monthly expenses vs. your income, and directly depositing the difference to your account every month. Anything you have left over at the end should also go straight to the account. I used ING, which is now Capital One, but shop around a little. I liked ING because it had this handy little saving goal thing that told me if I was on track or not. Make deposits to your account early and often. Also, try to make it somewhat inaccessible by hiding the debit card or avoid getting one altogether.


Staying on track and living within your narrowed means – This is where the hard work really starts but every day is easier than the one before it. 

Get the ball rolling and it will be easier to keep it rolling. You have to start somewhere and once you have, you need to stay on track. Set small goals all over the place so that you can feel gratified when you achieve them. Reaching milestones in your savings, paying off a debt, reducing an expense by a certain time, or just successfully making small changes are all great motivators to keep you going.

When living within more limited means, it’s easy to justify small splurges because hey, you’re working really hard and you deserve it, right? Wrong. You can have little splurges but phase them out or they’ll become more frequent than they should and will take money away from your trip. I used a little mental trick to keep myself focused on the value of these little splurges by equating every $50 with a day of travel. You see, $50 is the lower end average I plan to pay in most budget countries like Thailand, India, and others. So whenever I thought about a little splurge I asked myself if it was really worth a day on the road. This little game I played in my head kept me on track more times than I can count.


The end is near! – Tighten that belt a little more and see if you can get just a little more out of your plan.

As you progress through your saving plans you should build up a pretty good head of steam where your savings is growing quickly and you are much more comfortable with your extra work and lower cost routine. This is the easiest time to dig deep. The end is near, you’re getting excited and you suddenly feel like you have more fuel in your tank than you had in the middle stages. Some people will want to throttle back and relish the achievement a little allowing themselves to slip just a tad but I say NO! Press harder and see how far you can go. Work harder, save more, cut the littlest of things out of your budget if you can. You’ve made it this far, right?

This paid off for me. I put in extra effort in the office and about 8 months out from our departure date I took a promotion. It felt a little wrong taking a position for such a short period of time but it was a wise choice and increased my income.


Be free and spend wisely – You made it! Now don’t go spending that all in one place.

If your experience is anything like mine, then you probably just acquired some new skills and ways of living that you didn’t have previously. Use them when you travel. Eat cheap, prepare your meals, budget and think about your expenses. Remember, money is coming from your savings and you didn’t work all that time to spend it carelessly. Have fun but be mindful of your daily spend. Our plan is to have our savings account automatically send our daily allowance to our checking account every day. At the end of each week, whatever doesn’t get spent goes back into the savings account.

For tips on saving money while on the road, check back. I’ve already got a few but I’ll be sure to bring more to the table in a few short months. 


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