Saturday, February 21, 2015

How to Save Money for Travel—and Fast

In the past, I’ve written about how I travel for cheap or for free, but I’ve never written about how I actually save money for travel.

Here’s a full (but not entirely shocking) disclosure; as a freelance journalist, I don’t exactly make a lot of money. And yet I always seem to have enough money to travel. So how do I do it?

I know a lot of digital nomads advocate for selling your stuff and giving up a home base in order to explore the globe. But I kind of like my bed and my dog and my apartment, so I’ve figured out that there’s another way.

While I'm far from a financial guru, here are my six foolproof steps for saving enough money to make travel—or any other financial goal, really—a reality:

Don’t buy anything. 

Although I’ve experimented with a number of frugal living and budgeting philosophies over the years (who can forget my coupon-clipping craze?), I’ve since realized that I’m a bit of a Moustachian—I prescribe to the idea that the easiest way to save money is by reducing unnecessary consumption.

It’s pretty straight-forward—if I don’t need something, I just don’t buy it. (Yup, this is some pretty revolutionary financial advice here. But stick with me.)

If I can borrow it, I borrow it. (Want to cycle across Tasmania? You’d be surprised by how quickly you can source panniers, a tent, a cycling rain jacket and countless other supplies on loan.) If I do need it (as was the case when it came to chamois for my recent cycling adventure—they’re not exactly the type of thing you want to borrow), I opt for high-quality goods that are ethically produced and will last for a long time. And if I want to make a frivolous purchase? Well then, I better love it and plan on owning it until it dies or I die.

Don’t go shopping. 

The easiest way to not buy anything is to not go shopping. It’s that simple.

Added bonus: Have you ever got into a mind-numbingly boring conversation with someone where they bragged in excessive detail about their latest shopping haul? That’s why you should probably develop a more interesting hobby anyway.

Don’t spend money on services that you don’t really need. 

Example: Why take a taxi for $20 when you can take transit for $3? And why take transit for $3 when you can walk? (I just saved you $20. Amazing, right?)

Stick to a strict weekly cash allowance. 

Since I’m currently saving for a hard financial travel goal, I’ve reverted to the method I used throughout university that helped me stretch my small paycheques to the furthest reach. In fact, using this method, I managed to avoid taking out student loans until I was entering my sixth year of post-secondary, which is pretty incredible.

I give myself a weekly allowance. Every Friday, based on the following week’s schedule and projected expenses, I take out between $80 and $120 cash. This spending money has to last me for the entire week and must cover all of the week’s costs, including groceries, entertainment and transit. (It does not include big-ticket necessary purchases, like trips to the dentist or work equipment.)

The cash allowance is a great system because it allows you to determine what you really need, versus what you want. And just like being a kid again, I pretend that it’s the only money that I have until I get my allowance again on Friday.

I’ll admit that sometimes there’s nothing better than a cold drink on a hot day, or an afternoon pick-me-up special treat. But if you’ve only got $12 left in your wallet and it’s only Tuesday, you might rethink the $5 latte. (Would you spend all your allowance on candy when you’re saving for a Nintendo? The principle is exactly the same.)

Learn to love beans and rice. 

Last year, my roommate Mike and I participated in Live Below the Line. Living off of rice and beans for five days wasn’t exactly a pleasant experience, but Mike and I discovered something—we were very, very good at living on a budget of $1.75/day. In fact, we estimated that our food expenses were closer to $1.25/day.

“Just imagine,” theorized Mike, “if we had each spent $20 instead of $8.75. We’d actually eat really well.”

That’s why this week we each chipped in $30 to buy groceries. For $60, we’ve made enough bread, chilli, lentils, curry, cake and soup to last for the next two weeks (and possibly longer). We’ve also purchased dairy and produce to round out our diet. That means that my food expenses for this coming week are just $15.

In addition to cutting down on expenses, sharing groceries with your roommates is also a great way to reduce food waste. To get started, check out Live Below the Line's cookbook.

Splurge on the stuff that matters. 

While all of these steps are a great way to save money quickly, there is a social cost. That's why it's important to note that there's a difference between being frugal and being cheap.

By all means, spend money when it matters. Celebrate friends’ milestones. Visit the dentist. Pop a card to your great aunt in the mail. Figure out what is important to you and make room in your budget for those costs.

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