Confession time here, I used to suffer from a severe case of guilty conscience. It was so bad in fact, that I have literally contacted old high school friends many, many years after high school to apologize for something I did or said to them when we were young. Alex and I both have spent time living in low income countries in Africa and my awareness of frivolous spending has always been heightened ever since that experience. However, during that experience I also discovered an absolute LOVE of travel but I have struggled with justifying the cost for many years up until several years ago. This came about after reading an article about a couple who justified their travels by having their investments produce interest income and they would use that amount to spend on travel. While I read this, I was still in grad school, and a long way from having such investments, but it led me down a different path to justifying our travels…if we could cut the cost of our expenses, money we would have spent anyways, we could justify our travels. It was a light bulb moment that has fueled me to this day as Alex and I manage to fit in a lot of travel throughout the year and still manage to spend less than the average American. When we talk about our travels some people tell us that they wish they could travel more but they can’t afford it, yet far too often I see them making frequent coffee runs, eat lunch out, and buying new cars as opposed to used. Prioritizing your spending is absolutely essential.
I want to start off by saying that I know everyone’s situation is different, and some people are truly just trying to fulfill their basic needs. However, most middle-income households spend way more than they need on non-essentials, and their money could be put to better use in the life experiences that travel affords if travel is something they desire. Alex and I are both fortunate to have good jobs and to have had an upbringing that encouraged education. However, we have been very good with our money and worked hard for many years to not inflate our lifestyle much over the years. We managed to pay off all of our student loans from graduate school within a little over a year for me, and about a month for Alex (since we were paying his off while he was in school and working full-time). When we became debt-free we didn’t increase our spending, and the extra money that we were using to pay off debt, we used for investing. I say this not to brag, but to demonstrate that there are ways to live frugally and to save for travel if you prioritize it.
The goal of this article is to demonstrate that if travel is a priority for you, you can adopt some of these techniques that can really add up to savings for travel without needing to increase your income or spending.
1. Reduce your fixed costs
Fixed costs are expenses that occur every month without much variability. These are things such as housing, car payments; cable, cell phone bills, insurance etc.
Below are a few examples of what we have done to reduce our fixed costs:
Housing:
I know some of you may be in mortgages or in leases that aren’t easy to get out of but if you are in a position to reduce housing cost it can add up to huge savings! Housing is one of the biggest techniques we have used to reduce our costs. As mentioned above, we followed a frugal approach to life and one of those ways was keeping our rent low. This was not always easy especially in the high cost of living areas we mostly lived such as Seattle. Also, this required us to adopt an aspiring minimalist life-style to be able to fit into smaller spaces, therefore reducing our spending. The idea of needing more space just to be able to keep our “stuff” is simply ridiculous. To illustrate how powerful lowering housing cost can be, take this example:
In one of the many places we’ve lived years ago in New Hampshire, the average rent was around $1,300/month. In pursuit of a good deal, we checked Craigslist several times each day, until we found a less expensive place for $900/month and then jumped on it right away. That equates to a $400 savings per month.
$1300-$900=$400
$400×12 (months)= $4800 a year!!!!
That savings alone was more than enough in 2016 to cover a climbing trip to Colorado, a weekend trip to Montreal, and our entire ~4-week trip to Nepal! Just because you “can afford” higher rent does not mean you should. And if you want guilt free (or just more) travel like us, this is one way we justified it.
Vehicles:
Avoid expensive new cars! Alright this was more true years ago but generally it is still a better value to buy used cars. My grandpa was in the used car sales business so this was instilled in me at a young age. A new car looses so much value as soon as you drive it off the lot. Alex and I have mostly purchased our cars on Craigslist. Saving money on this can really add up. For many years I drove a 1998 Toyota Corolla. It wasn’t the prettiest car, but I didn’t care. People at work would playfully tease me about my car, but I wore it as a badge of pride knowing how much I saved (I know, I’m weird). We purchased the car in 2010 from a man on Craigslist for $3,500 in Seattle, WA (before our East Coast move). I then drove it until the very end of 2016 where I needed to sell it quickly to move back to Seattle. I sold it on Craigslist the day before my flight to move back to Seattle, so I sold it for a cheap $900. The car ran great and had no major problems, but I needed to see it quick. Let’s do a comparison of how much I spent vs. someone who purchased a new car. The point of this is just to provide a rough estimate of the type of savings.
A new Toyota Corolla sold for $18,500. Lets assume someone bought this but did the smart thing of going to a local credit union and got a low-interest loan of 3%. Assuming they had a down payment for the same cost as our Corolla, and paid off the car with a standard 5-year loan, they would have spent a total of about $19,672 for the car with interest. Assuming they had the car for the same length of time as we did (6 years), the car would have depreciated in value by 65% in the first 5 years alone and another 5% in year 6. So based on my research a new car depreciates by about 70% after 6 years. So that car would be valued at $5,550. So if they sell the car on Craigslist instead of trading it in, the total cost of the car would be $14,172. This is compared to our $2,600 over the course of 6 years for our old Corolla, and again we definitely could have received a better selling value for that car if I hadn’t been rushed to sell the car the day before a cross-country move. So not even including the opportunity cost of investing the difference over the course of the 6 years, that savings alone is $11,571.
11,571!!!! That is a lot of travel! That alone is more than the cost of our three separate big trips we did during that time COMBINED: ~3 week trip to Peru, 2.5 week trip to Ecuador/Galápagos’, and ~4 week trip to Nepal.
2. Reduce restaurant and snack/coffee runs
I know this one is not very fun but it can really add up! If you have ever used mint.com you may be surprised to learn how much you spend in this category. Research from 2015 years ago found that the average American household spends $3,008 on dining and restaurants per year, but I am assuming this has likely gone up over the years. But using that number that’s roughly $250/month. Let’s demonstrate how reducing spending in this category can add up to travel savings. If that number could be cut in third to roughly $125/month.
$125×12(months)=$1,500
$3000-$1,500=$1,500
$1,500!!! This was more than our 8 day vacation to Mexico when we were first married. And these numbers are outdated and I am sure will show more of a difference now.
3. Reduce unnecessary grocery costs
Most people spend way more than they think on groceries. This one was hard for Alex and I to manage consistently. We love to eat loads of fresh, organic produce and will not compromise our health for cheap, unhealthy food. However, we have found in the past that there is a lot that can be eliminated in this category, if you keep track of your spending. An example when we did this is outlined below.
When I was in my last year of graduate school I knew I was going to be doing a practicum (kind of like an internship) and wanted to do one overseas the summer before my fall graduation. Being the travel enthusiast that I am, I wanted Alex to meet me afterwards so we could travel before I began a post-graduate school career with limited time off. However, we had a hard time justifying the cost of a major trip when we had so much student debt from my education. So we devised a plan to reduce our food costs and use the savings so we could travel guilt-free. We were absolutely shocked to discover how much we were spending on groceries and dinning out. So we pretty much eliminated eating out and hacked a large chunk off our groceries for the 7 months or so before our trip (Alex also did a temporary sublet with roommates during my two months abroad to cut housing costs but we will not count that in this equation). When we hacked our grocery food bill and were able to eliminate an embarrassing $450 extra per month that we didn’t need by tracking our spending and making sure to not exceed our monthly goal. This meant weekly check-ins to see where we were at and to know how much we could spend on groceries that week. Here’s what that looked like in savings over the course of those 7 months.
$450×7 (months)=$3,150
My practicum was in Nicaragua but we ended up deciding to meet up in Peru for a three-week trip afterwards. That $3,150 savings was enough to cover the cost of our combined total spent for flights to/from the country, two round trip flights within the country, all the many buses and a few taxis we took, all our hostels, and even entrance tickets to Machu Picchu (<-not cheap by the way).
Some other grocery money saving tips: buying bulk foods, and taking the time to prepare food ahead of time. Prepping food has huge time-saving and health benefits as well because you can always have healthy food readily available. Common items we prepped ahead of time included making up a large batch of hummus in our blender, cutting up loads of veggies, making bulk quinoa/brown rice, steal cut oats, and beans.
4. Travel Credit Cards
I am going to preface this by saying that if you tend to be irresponsible with credit cards or plan to carry any debt burden then DO NOT DO THIS. However, if you are like us and pay off the entire balance of your credit cards in full each month, then this can be a way to save huge amounts of money! There are plenty of blogs that dive into this much more than I will in this post. Alex and I wish we had started this sooner! In about a year of doing this we accumulated a balance of roughly over $5000 worth of flights with no increase in spending. We just put all our usual expenses on travel credit cards and PAID THEM OFF IN FULL EACH MONTH. Honestly this has saved us an insane amount of money over the years.
5. Keep cost low when traveling
Most Americans think that travel has to be extremely expensive. They often stay in expensive hotels, all-inclusive resorts or cruises, and take guided excursions. I am always amazed at how few Americans I see on my travels, but honestly with maybe 2 weeks of vacation days per year I can see the appeal to choose a more catered to option. Alex and I do a lot more traveling than most of our fellow Americans, but we do it independently and on a budget. Also while working traditional full time jobs we did a lot of hacks listed in this article to maximize vacation days.
Hostels and locally run guest houses are not scary and they are a great way to save money! We never book dorm rooms in hostels, you can book private rooms for only a little more money typically. Also, public transportation in our experience is usually straightforward and if you stay in a hostel, which is accustomed to catering for budget travelers, they are especially good at directing you to inexpensive transportation. You can also focus your travel on more budget friendly locations. For example, Western Europe will be a lot more expensive than Eastern Europe or Southeast Asia for that matter. We were able to stay in private hostel rooms in Vietnam for $6/night and that included breakfast!
7. Maximize your paid time off
If you have an employer, learn to maximize the time off you have. Alex and I learned to master the art of using our paid time off strategically. While working many years in traditional full-time work, we did many epic “warrior weekends,” and a couple of larger travel trips per year. We did this by first making it clear to our employers that travel is a priority for us, so they are not shocked when we decide to go off for Two to three weeks (in fact I told one of my previous employers about Nepal a whole year before our trip), and we also maximized holidays. This is truly essential. So many of our trips we did this. We timed our Balkans/Europe trip with Labor day weekend in September, our Nepal trip to occur during American Thanksgiving, Colorado was during 4th of July weekend, and Ecuador was over Christmas and New Years. This enabled us to use less of our precious earned days. Also, if you are full–time, salaried, and work for a flexible employer, consider asking to work 4 tens on each end of a trip, which is what I did with my previous employer. This can really save earned days and it doesn’t hurt to ask; you never know if they might agree!
Obviously everyone’s situation is different, but I hope after reading over some of these points you get some ideas on how to modify your life to one that enables you to travel more without necessarily increasing your income and spending!
Happy Travels!
-Liz