Text page

Finance and money

Finance and money forum

How do you go about saving for your trip.

Posted by svendj on 17/9/2010 at 16:13

Was just wondering how people here are planning to save money for a trip?

Do you have a plan figured out that you will be leaving within 6 months or so and need to save X amount of money before that time or do you just keep working, save some money and once you've got enough just go.
For this last one: when do you now you have enough to go for a trip, cause you might be thinking that you could get off for 6 months but also that if you keep working a little bit more you can go for a year... what would you choose here?

#1 svendj has been a member since 30/4/2010. Location: Belgium. Posts: 196

Posted by Nokka on 17/9/2010 at 20:36

This is what I would do (and indeed did when planning our own trip) :

1. Work out your per day budget. Each of us will have a different budget and requirements, but you need to be brutally honest with what you may want to spend money on. Accommodation, meals, drinks, travel costs (can add up), trips, toiletries etc.
2. How many days do you want to go for.
3. Multiply the 2 figures. So, you want to travel for 90 days and estimate £30 day, then you need £2700. If there are 2 of you, that's £5400.
4. Add in estimated cots of international flight.
5. Add an amount as 'emergency money' for if something happens you didn't expect.
6. Remember you need travel insurance.

Let's assume that all adds up to £7000, or £3500 each. Then work out when you want to go. The problem here is many people don't plan early enough and have too short a timescale, but we'll assume you wish to set off in 15 months time. Well, to save £3500 in 15 months is £233 per month.

Next set up a separate account with a bank. My bank allows me to call little sub accounts by a name, and ours was called Travel. Original, huh ? Set up a standing order from your main current account to your 'Travel' account for £233 per month and in 15 months you've got enough money.

Easy isn't it ? Well, no, it isn't. But you will have a goal and you have a plan, so you can reach it if you want. Work overtime, take a second job, cut back on other things. If you want it, you can get there.

When travelling keep a log of what you're spending each day. This will enable you to see whether you are on target with your spending. Remember some places are more expensive than others.

Do try to not get into debt if you travel. If you are lucky enough to have a well-paid job when you return, then you would probably still be just about OK. If not, you will have a double whammy of post travel blues PLUS you'll be skint. And in debt.

Also, remember you may have significant ongoing costs while you are away, which may continue to need paying. For young people these may not be major, but could still be a student loan, rent, other loans and credit cards, mobile phone costs etc. For grown up gappers it can extend to mortgages, insurances, tax, utility bills, rent, Council Tax. Unless you are very lucky these will also need to be paid while away.

To travel for a period isn't cheap. The main thing is to recognise that you want to go and put your plans into action as soon as possible.

We saved for nearly 4 years to reach our goal, but didn't save as much each month as the example above. We knew that that was when you wanted to go, plus we still wanted to be able to have fun and take holidays etc meantime. When the time came and we were ready to go, people would look at us aghast. 'But how can you afford to do that ?' they wailed. '4 months with no work, we couldn't possibly do that'. This, usually, from people with the latest model car parked in the drive - bought for more than our travels cost us. A question of priorities, I suppose. I have a car; its just I don't reckon I'll have that many memories from upgrading to a new one.

#2 Nokka has been a member since 6/4/2009. Location: United Kingdom. Posts: 259

Posted by savorygal on 17/9/2010 at 22:48

I started saving about 2 years prior to departure ( I leave jan 2011 for 14 mos). I am older so have a mortgage & taxes that will need to be paid while I am away I figured out my budget & just like Nokka suggests, I multiplied by the number of days I am planning on being gone & then added some extra for emergencies. I also purchased ( & paid for) my plane ticket well in advance so it didn't come out of the the big budget. ( it also made the plan concrete)

I do not use a credit card unless I know I can pay it off in the same month ( interest to CC companies is insane)

I rented my house, & charged a bit extra for repairs etc. and I rented for the last 2 months that i will still be home & working ( my friends & family have offered to put me up) which will add to the fund.

I also had a cage built in my basement for all my belongings so I don't have to pay for storage.

In addition:
I turned off my cable TV & internet
I cancelled all magazines, & other monthly expenses that were not essential
I cook all my meals & bring lunch to work
No lattes or other coffee snack things
movies are strictly matinee
Eating out is social & I still do it , but no big dining experiences
books now come from the library
I have not purchased new clothes or shoes in nearly 18 mos
I had a huge yard sale & sold everything that wasn't dear to me ( made $2000)

I find that people will spend money on what they value.If this is something you want, it can be acheived.

Good luck!

#3 savorygal has been a member since 16/7/2010. Posts: 176

Posted by busylizzy on 18/9/2010 at 04:13

Fantastic advice from the above posters! Here are a few more things - more like 'hidden' costs. It may not all apply, but hopefully will be useful to others as well.

Storage of stuff
Hopefully you have family members that will make way in their garage or basement for your stuff. But if not, and you can't build a cage in your own basement (love that!) then you need to pay for monthly storage somewhere. Assuming that is the case:
- Allow for storage costs for a few weeks/months after you planned to return. It may take you awhile to sort out a new place to live.
- Allow for costs of a furniture removal truck if you think you will need one. This is to move stuff INTO the unit before you go as well as OUT of the unit when you get back. (This cost me a small fortune!) Depends on how much stuff you have, and whether or not you can manage with a couple of burly men-friends with a trailer.
- If you need a storage unit, and you live in a big city, look at storage options in smaller towns out of your city (like an hour away). It could be considerably cheaper, and not too much more expensive to get your stuff there.
- Don't forget insurance for your stuff. Companies in NZ charge exorbitant rates if your stuff is stored in a storage facility. (And you you need to let them know where your stuff is otherwise they could refuse payout if something goes wrong).
- A tip: if you have stuff in storage, consider what you will need when you first come back. Important papers, clothing suitable for job interviews, winter clothing, a bed, whatever. Make sure this stuff is NOT shoved into the back of the storage unit. Keep it up the front where you can get to it.

Potential costs when you return:
- You may be in a position where you need to contribute board, rent or food costs if you plan to bunk down with friends/family when you return.
- Buying a car and insurance for it, or if you left your car behind, the costs for re-registering it and changing insurance policy back from 'third party' to 'full insurance'. (Might just be a NZ thing?)

Other travel-related costs
- A backpack (You can probably get a good quality second hand one on eBay or similar).
- All the other guff that everyone buys before they go, whether they need it or not (new trekking shoes or teva sandals, mosquito net, sleeping bag liner, microfibre towel, travel books, daypack, new camera, new netbook, iPod, external hard drive, etc, etc, etc)
- Travel-related healthcare: vaccinations, etc - including all the ones that you get paranoid about but probably didn't need!
- I know Nokka mentioned travel insurance, but I'll repeat it here: Travel Insurance!
- Potential cost saving: use airline reward points to pay for you airfare if you can. (I got a free trip from NZ - Singapore which saved me a small fortune).

Possible income-earning and cost-saving opportunities while you are away (or before you go):
- rent your house out. (But be sure it is properly managed by someone! You may need to pay for this)
- teaching English (do some courses, volunteer work, etc before you leave home to get some experience)
-set up some online business if you have the skills.
- maybe your current employer has some opportunity somewhere in Asia for you that would allow yo u to travel for a few months, earn for a few months, then continue on with your travels.
- sell your stuff (but remember, you may need to buy replacement stuff when you come back)
- if you have enough time and enough disposable income, bang as much extra money into your mortgage before you go. This can potentially help to reduce your mortgage payments while you are away. (This is relatively easy to do in NZ, not sure about the US).

Other preparation:
- If you don't have a guaranteed job for when you come back, I would suggest getting your resume up -to-date BEFORE you go. That way it's ready to be sent out as soon as you step back on home turf.

In my case, I rented out my house while I was away. I didn't rely on the income from that to support my travel costs, and instead used to to pay for ongoing house /storage/insurance costs, and to provide my living costs for when I got back. And it was available as emergency funds if I needed it.

I updated my resume and emailed it to myself before I left. Once I decided I was ready to return home soon, I sat at a beachside restaurant in Koh Pha Nang and sent it out to 2 previous employers and to 2 recruitment agencies. It got the ball rolling early so that I had an interview within 5 days of getting home and had a job offer the following week. (I then told them I didn't want to start for 3 weeks as 'I needed a holiday'. I didn't get much sympathy, but I got the extra time to enjoy a NZ summer and to catch up with a few friends before I got stuck in an office again!)

Hope this helps you (or someone else!)

#4 busylizzy has been a member since 31/12/2007. Location: New Zealand. Posts: 2,152

Posted by svendj on 20/9/2010 at 17:51

some pretty good posts here, did the same thing as Nokka did the first time I went, just calculated how much I needed and saved up for it (not 4 years like you did, but about 8 months for a 7,5 month trip).

Jobs while travelling can indeed help you out a little bit but they will not provide you for your entire trip. Renting out your house sounds like a fare deal to have some extra cash when you come back (though you need the have your own house, which I haven't yet :) ).

I was asking this cause I'm back to normal office life but still saving a lot of money for whenever I think of going again, though I find it hard now to even quit my job again. I know it's a lot of fun, but it's also a hassle of finding another one when you come back (especially when you have a good paying job now).

Thinking of following Nokka's plan a little bit here, just save my money for within a few years (I still have my regular holiday plan for next year to Asia probably but will do the backpacking thing a little bit later again).
Resume up to date is a fair trick to help you out when you come back home, and indeed sending it out before you even return home can be a good solution as well!

good posts!

#5 svendj has been a member since 30/4/2010. Location: Belgium. Posts: 196

Posted by busylizzy on 21/9/2010 at 03:08

I'm in the same boat as you by the sounds of it. I'm back at work, saving for the next trip. Yes, leaving the job is a tough decision. I am planning on another trip next year. I am still trying to work out whether to go for 2 months (taking unpaid leave from work, something my employer is usually OK with) or pack it all in and go for another extended trip. It's the uncertainty of finding a job (or the time required to do so) when you come back that is the problem!

Meanwhile, while saving it up, I am also making hard decisions about spending. There are some bits and pieces that I want for the house or for me, but have decided to defer that spending where possible. It would be NICE to have a new lounge suite that hasn't been scratched up by the cat.... but I can live with it for another year for the sake of getting another trip.

So.... your original question - how do I save? But deferring all unnecessary expenses!

#6 busylizzy has been a member since 31/12/2007. Location: New Zealand. Posts: 2,152

Posted by exacto on 21/9/2010 at 09:19

in my situation, it is getting the time off, rather than coming up with the money, that's a problem. i still consider myself pretty lucky, since i get out on the road for about two months every two years (plus a bunch of shorter trips too). but as i've aged, i've accumlated responsibilities like spouse and kids and mortgage payment that prevent us from completely chucking it all and hitting the road. i mean, we could quit the job and do all the cool stuff people suggest above - in fact i already did that once - but we've still got two kids....

anyway, i mention this only because i think the best time to take seriously extended trips is either before you've got all these complications in life, or after the kids have left home for good. holding my breath here....:-)

we are able to put aside money for all of our travel exactly because of the things that Nokka and others mentioned above - setting priorities. we have a modest home and drive beater cars and just basically live below our means, so that the extra money is available for travel when we can forge the time.

great discussion here and i hope we can keep this one going. regards.

#7 exacto has been a member since 12/2/2006. Location: United States. Posts: 2,833

Posted by DLuek on 21/9/2010 at 11:30 TF writer

Interesting question, and some good info in the posts above...

As for me, I tend to work real hard for a while (a year or two), save enough $ to travel for a long time (say a full year), then travel for about half that time so that I can count on having about half the money I saved leftover for when I do decide to go home.  About five years back I made the mistake of traveling for several months while paying rent for an apartment back home at the same time... Never again.  Financially that was like taking two trips at the same time.  I stretched myself pretty thin, which caused some stress after returning home.  

In more recent times, I've always planned a departure date that coincides with the end of a lease, moved out of my apartment and put my few pieces of furniture in storage at a friend's home (or just gave them away), and left with virtually nothing tying me down back home.  As of yet - I'm 30 years old - I don't have kids or own a home or business, or have a "career" that ties me down, so fortunately I've managed to retain the freedom to travel at will... As a bartender it's been pretty easy to find decent paying and flexible jobs when I need them.  I returned from the last big trip a little over a year ago, have been saving hard since then and could easily travel now, but I've decided to hold out, finally finish up my B.A. degree, and save hard for a bit longer so that next time I'll be able to quit my jobs for good and head out into the world indefinitely.  I'll probably travel for a solid year, then settle in to a job teaching English somewhere (perhaps Vietnam), or else come home and take it from there.  I've set an expected departure date of August 1, 2011, but (like all things in this world), it's flexible and subject to change.  

#8 DLuek has been a member since 19/6/2008. Location: Thailand. Posts: 1,346

Posted by DLuek on 21/9/2010 at 11:53 TF writer

One more note on this... I never really appreciated the value of saving money until the first time I travelled to Thailand and Cambodia several years ago.  Before that, I tended to work pay-check to pay-check, spending money rather frivolously on unnecessary things, not worrying about saving.  But after seeing first-hand how far the US dollar could go in SE Asia, as well as the degree of poverty over there, my whole attitude changed.  From then on I viewed money from the perspective of SE Asia... A single night's work at home became four or five days of travel expenses, or a significant difference in the lives of impoverished people over there.  I started saving, giving to charity rather than spending on silly things, overall became something of a minimalist, and stopped taking my "average" jobs for granted.  

#9 DLuek has been a member since 19/6/2008. Location: Thailand. Posts: 1,346

Posted by svendj on 21/9/2010 at 16:11

nice one exacto: having kids and a mortgage can hold you back from a long term travel (I don't mean this in the bad way as having kids can be an awesome experience on itself, not that I have any). I find it nice that you are able to keep a good amount of money aside for a holiday with the family even if that means living a little bit below standards.
I think a lot of people on the site here are able to live below average as most of us have been travelling before and met other cultures where you can see that you don't need a lot to be happy and survive (survive might be a hard word here, but you do need your needs of having food an a place to live).

lizzy, a nice lounge suite can wait for sure. Even if you think about buying one, go to shop, check out the price of a nice one, divide that in half and try find one for that price and use the other half of the money for savings :).

Dluek, indeed a good night work in western countries can give you about 4 days of travel expenses. Though I still think a little bit less, let's say 1/2. I still bear in mind that I have my own expenses as well (food etc) while saving up for a trip.
A job as an English teacher can help you a lot to just stay somewhere in Asia for a long time. Especially if you are a native and teaching in Korea or Japan. As I'm not a native, I'll still be able to do this but will earn less then natives. I could go for my TEFL of course, that's another way to go for.

Working as a bartender back home is indeed a good paying job and also can help you to fund some beers and food while travelling. I worked for a few pubs in Vietnam to get some discounts on my bill.

and lizzy, indeed unpaid leave from work is always a good thing if you can manage that, at least you're sure you've got you're job when you get back. I'm just going to take my 1 month paid holiday next year in April and then come back and keep saving more.
coming back to the regular life of working in a well developed country is nice but still gives me the creeps if I see how people can live with barely nothing in eastern countries.

#10 svendj has been a member since 30/4/2010. Location: Belgium. Posts: 196

Please login to add your reply

You need to be a Travelfish member to be able to add a post to the forum. After logging in you'll be returned to this page automatically to add your post. Not a member? Join up here.