They say “money doesn’t buy happiness” but try traveling without it and for us travel makes us HAPPY! The more money we have, the more we can travel and the happier we are!
Because travel makes us happy, we’ve prioritized most of our energy, focus and finances towards travel.
I also love a good cup of coffee and hanging out in funky cafes. My 25-year-old self would laugh at me now if he knew I prefer a comfy couch in a cafe sipping on lattes with friends than getting rotten drunk in pub – well, most of the time, I do still enjoy a few beers, and sometimes a few too many, but I just can’t do hangovers anymore!
There are a lot of articles written about how to save money for travel, heck, even I’ve written a few in the past and possibly will again. Most of them focus on cutting back on the small things, or things that bring us joy, and an outlet from the chaos of life.
They suggest things like:
- cutting coupons
- putting all your loose change in a jar
- use a fan instead of A/C
- canceling cable TV
- Use energy efficient light bulbs
- canceling your gym membership
- and giving up your daily coffee!!
All those things can and do add up, and some can even be great for the environment and your health, and I do follow that advice for the most part, but I’m tired of scrimping and saving on every little thing and cutting out the enjoyment in life.
We’ve done this in the past too but have slowly learned that sometimes small actions tend to give you small results, and not much joy!
If you want to make travel a priority in your life – and no I’m not talking about quitting your job and traveling the world – I’m talking about more weekend getaways and taking your family on that dream two week vacation each and every year, then it might be time to focus on making bigger changes to create more disposable income than simply cutting out your daily coffee!
One of my favorite authorities on money is Ramit Sethi, founder of I Will Teach You To Be Rich. He speaks about,
“Living a rich life is not about using coupons and cutting out your daily coffee or green juice. This can be a good thing to do when you’re saving for anything, BUT, it’s not going to make a big difference.”
Sure, a $4 coffee per day is $120 per month to fuel your caffeine habit and $1,440 per year you could put towards travel.
$1,400 is nice, and can get a solo traveler an international flight or an all-inclusive domestic trip at home, but it doesn’t go far four a family of four. I’d rather focus on ways to create an extra $20k, $30K, even $50k per year in disposable income.
Can you find other ways to free up a lot more cash than your daily coffee over the long term? I think you can.
I don’t want to cut out all the little things in my life that bring me joy – like my daily coffee!
I enjoy my daily takeaway coffee and sitting at the beach, or working online out of a cafe. I don’t want to give that up. We put a lot of focus and priorities on other areas of our life and this is my little treat. And in Australia, our coffee is so good it’s hard to resist.
You’ve got to enjoy the journey, not just the destination, right?
We’re not 25-year-old backpackers anymore on a round-the-world trip and my days of roughing it are over. I don’t want to eat baked beans out of a can or crash in a 4-bed dorm of a hostel.
Those days were fun, but we have evolved as a family in how we live and travel and we desire a few more comforts than that – and treats.
If you’re a backpacker, or going through a mid-life crisis and planning a never-ending sabbatical or taking a career break for a round-the-world trip, this post is probably not of interest to you. Your focus might be a little different than the typical family, couple, or solo traveler who works a 9-5 and has limited time and money for weekend getaways and just wants to take their annual 2-week dream vacation.
However, if you’re a family (or a couple or solo) living in the burbs and want to create more travel in your life on a consistent basis, this post is for you!
We know from all the emails we get from our readers that “lack of money” is one of the biggest things holding you back from having more travel in your life.
Maybe now is the time to start thinking about your finances and channeling what money comes into your life in the right direction.
Quick disclaimer – I’m not a financial planner and you should always seek professional advice when making big financial decisions. And I’m not a health expert on the pros and cons of coffee. But who is, one-week coffee cures cancer the next week it causes it.
Today I’m not going to be talking about turning off the heat and shivering through winter to save some dollars. I know, saving money for travel can be easier said than done and everyone has different financial challenges and backgrounds and you can only do the best you can with what you have, but I want to share some ideas or choices you can potentially make so you stop working just to pay the bills.
To create some serious money for travel, I believe you have to…
Focus on the BIG wins!
Changes that will potentially free up much more disposable income than simply cutting coupons or your daily coffee. Some of these strategies are exactly what we are doing behind the scenes in our life.
These bigger problem areas can make a BIG impact on your life and finances not only for this year, but for many years to come.
So, what long-term changes can you implement that will allow you to have that dream trip year after year after year? Let’s find a way to create consistent travel in your life, shall we?
Maybe pick one big problem area each month and work on that.
1. Affordable living
Many of us are over consumers, especially when it comes to real estate, and even more so when it comes to having kids. Do you really need that big of a house, in the most expensive neighborhood?
Can you move into a cheaper home, in a less expensive area of town, that will make a sizeable difference to your financial position?
Not only can a cheaper home lower your monthly mortgage payment, but your property taxes, insurances, and everything else that comes with it. The smaller the home, the less our bills each month, and the less stuff we feel inclined to buy to fill it – call it the ripple effect.
I’m not saying move house for the sake of moving, the numbers have to make sense for the long-term. Do the math!
If you are renting, can you move to a less expensive apartment or neighborhood? Do you need three bedrooms or could you consider living in a two-bed apartment or bringing in a flat mate and splitting the costs?
2. Refinance your mortgage
If you don’t want to move out of your existing residence and neighborhood, can you refinance your mortgage so that it’s more manageable?
Be careful, you don’t want to create a situation where you end up paying more for your home in the long-term for short-term gain. But is there a way you can restructure your loan that allows you more breathing room to have a life? Again, do the math and talk to an expert!
3. Relocate to one of the cheapest places to live
I understand not everyone desires, or has the option, of moving their life to a new city or state, but the way things are going more people are becoming location-independent or starting new careers and having that option.
Maybe your employer allows you to work remotely, or the company you work for has other locations you can transfer to?
When we lived in Raleigh, North Carolina, we met many people who had downsized their life and relocated from more expensive cities such as New York or Chicago. Now, Raleigh is not NYC of course, but you can have an excellent quality of life in a great city for a lot less financially!
Is there a similar comparison that might be an option for you?
Would you like to have more disposable income to play with, rather than working just to keep your head above water?
4. Consider moving abroad
This will seem extreme for most of you, but again, this is becoming more common as people become entrepreneurial via web-related businesses or their company being located off shore.
If you’re not tied down geographically, and you can qualify for a visa that allows you to live in another country, is this something you would consider if it meant having a better quality of life?
There are expats in almost every country, and if your services or products allow you to earn a strong currency like the US dollar, British pound or the Euro whilst living in a country with a weaker currency you could come out way in front!
Not to mention all the unique travel opportunities this brings by basing yourself in a new region of the world.
Read More: 5 things to consider when living abroad
Our podcasts share how we’ve lived in 5 countries and made travel a priority
- Episode 1: Solo Travel and Working Abroad before we met
- Episode 2: Our 5 year honeymoon living and traveling the world
- Episode 3: The Dark times and Birth of the girls and travel blog
- Episode 4: Embracing Family Travel and our 18 month Australian road trip
- Episode 5: Getting a green card and traveling the US (our dream realized)
4. Pay off those pesky credits cards in full each month
I know, this is never a popular topic, but honestly it seems like the one thing that causes most people financial hardship are credit cards!
Not everyone has a mortgage, not everyone owns a car, and not everyone has kids, but most people have a credit card. And after personally accumulating $30,000 in credit card debt I’m familiar with the dark hole you can dig yourself into.
Credit cards aren’t all bad – if you have self-discipline and know how to manage your money – some even help you accumulate points towards travel and when booking tours or accommodation with a credit card you have a level of consumer protection.
BUT, if you don’t use credit cards wisely then accumulating those benefits will be offset by paying too much interest on your balance each month!
For example, there’s been times in our life when we didn’t pay off the balance in full each month and our interest fee was well over $400 – which is a lot more than a coffee per day. So that became our focus!
We automated our accounts so that we paid off the balance in full every month avoiding high-interest payments. This is the best way to take away the worry and angst. Set it and forget it.
If you have to use a credit card to pay for necessities, you MUST commit to paying off the balance in full each month otherwise you will start drowning in debt.
We want to reduce our liability footprint as much as we can. We now only have a business credit card. We don’t want the luxury of ignoring our budget and purchasing ability because we have the security of a personal credit card.
5. Pay off your credit card debt
A few years ago we found ourselves using credit to pay off other credit – a recipe for disaster – but eventually we woke up to ourselves and paid off $30,000 in credit card debt.
If you’ve found yourself in a similar situation, consider these questions:
- Which credit card has the highest interest rates?
- Which credit card has the smallest debt?
Optimally, the one with the smallest debt will have the highest interest rate. It’s important to tackle the highest interest rate cards first as they’re the ones you’ll be getting charged the most money for the debt on it. The less you give to the bank the better.
But, if you have a huge debt on that card it might not be the best for your mindset to pay that one off first. You might feel so overwhelmed by it that victory seems far away, so you give up. In this case, it’s probably best to go with paying off the card with the smallest debt first.
That way you get some wins quicker and build the momentum and confidence to pay off the higher amounts.
Read more – 5 tips to get out of debt so you can travel more
6. Trim your insurance premiums
I hate paying insurance premiums as much as anyone, unfortunately, they are a necessary evil.
But maybe it’s time to re-examine your health, auto, life, and any other insurance policies you have to see if you can bundle for a better deal on your premium and benefits.
We currently don’t own a vehicle so we have that one off the table, but many people, especially families, own more than one vehicle. Can you switch insurance companies so you save?
I have life insurance and disability insurance via my superannuation policy but I know those premiums can rise over time and I’m researching options. Do you have the best available for your circumstances?
By shopping around and evaluating your benefits and coverage amounts you may be able to save a significant amount on your premiums each year.
7. Reduce car expenses
Besides being a depreciating asset, having an automobile is like having a hole in a bucket. They constantly leak money through fuel, insurance, repayments, and repairs!
And most people buy a more expensive car than necessary. As long as your car is safe, fuel efficient, reliable, and practical that’s the main thing.
We’ve been traveling consistently since 2002, well before we started travel blogging and many people often asked how we afforded it. One reason was instead of buying a brand new $40,000 car we bought a $10,000 car. Having a fancy new car wasn’t a priority, travel was!
Do you really need a $400-$500 car repayment each month? The lower the purchase price, the lower your loan payments are. The less fancy, the less your insurance premium.
Buy a car you can actually afford, not for looks. Having champagne taste on a beer budget when it comes to vehicles will leave you with a constant hangover!
Simply buying second hand instead of new can save you a lot more than giving up your daily coffee.
8. Live without a car
We’ve been living without a car for 10 months now. We live in a location where we can walk to all the necessities of life: school, shops, banks, the beach, parks, cafes etc. Living without a car has been liberating, not to mention the health benefits of all the short walks we do.
If we need to go further we jump on public transport. On the odd occasion we need a car for a few days, we hire one.
Do you live in a major city where you can walk to most things or use cheap public transport? This could save you a bundle.
9. Manage your credit score
Probably the least sexy topic of all but one that can impact your life in a big way – especially for you guys living in the States.
I’m not going to say I’m an expert on the topic of credit scores, but we did live in the US for four years and I know how much the credit rating system impacts your life. Because of our weak credit history, we had to put down an extra $800 just to get a cell phone plan. And our rental bonds were huge!
A poor credit score in the US can cost you tens of thousands over the years in increased interest rates on loans and insurance costs which I’m sure would set you back much more than your coffee habit. Instead of giving up your $4 daily latte focus on a much bigger win and seek expert help and fix your credit!
I know fixing your credit is a pain in the ass, but not as much as “just scraping by” each month!
Read more – My blogger friend Michelle has a helpful post on improving your credit score.
10. Luxury vs. Needs
You don’t need as much as you think to have a great life. Your life will feel less cluttered, which will free up even more energy in order to attract more money to you.
Would you prefer your life to be full of memories or full of stuff?
Ditch the $500 Coach handbag, the expensive shiny car, and the fancy restaurants you walk out of still hungry.
Often we choose to spend more on these luxury items because we want to raise the perceived value of ourselves in other people’s eyes. You’ll be far more attractive and inspiring to others if you have a life of enriching memories instead of a new outfit every day.
“Most people spend money they don’t have, to buy things they don’t need, to impress people they don’t even like”
Start living on a needs basis, not a want. I’ve been wearing the same Billabong jacket for 10 years, lol.
Read More: 19 life hacks for luxury living
11. Educate yourself
I don’t think it’s ever too early to learn about managing and investing money.
They should be teaching us this stuff in high school instead of algebra and Pythagoras’s theorem – which I’ve used once in my life in my former construction job when pitching a roof.
But there’s nothing stopping you from self-education. We’re always looking for ways to learn about managing money and taking control over our lives.
Recently we’ve been learning about the best bank accounts to funnel our money through for business and personal use, which credit cards are best for our needs, ways to put money away for our kids that will grow by the power of compounding interest, the best way to structure our superannuation accounts, and how to invest in the stock market.
We listen to podcasts and subscribe to online blogs like the Barefoot investor.
Books we’ve enjoyed recently include Tony Robbin’s Master the Game, Ramit Sethi’s I will teach you to be rich, and Esther & Jerry Hicks Money, and the Law of Attraction.
We’ve been on a journey for the past couple of years repairing our relationship with money.
Caz even created her course the 30 Day Money Cleanse to guide people like you to reach their own conclusions of what money means and to better understand its role in your life.
12. Automate your savings
You’ve heard this a million times before but pay yourself first! Don’t just read about it, act on it. After paying down bad debt, savings should be your priority.
Set up an automatic transfer that deducts 10% (or higher) of your wage each week and have it transferred into your travel savings account (a high-interest account online).
If all your money is easily accessible and sitting in your everyday spending account the temptation is always there to spend it.
It’s a lot easier to keep track of your savings if you have them separate from your spending money. If you don’t touch or see it you won’t miss it – trust me.
Say you earn $800 per week and you put away 10%, that’s $320 per month. Now we’re getting somewhere.
13. Set savings goals
Just like you would for buying a house or a car, decide how much you need for travel then set goals and time frames to accomplish them.
Start short term. Set a particular date for accomplishing shorter-term goals, and make sure the goal is attainable within that time period. Figure out how much you need to save per week or per pay check.
- First save for your airfare.
- Then accommodation.
- Then spending money.
14. Make travel a priority
If you want more travel in your life you have to make it a priority. It’s that simple!
Fix those bigger issues draining your finances and no more wasting money on things that do not bring value into your life – get clear on what it is you want.
If you find you have a wardrobe full of designer clothes never worn, or a garage full of unused toys, then you’re not clear on your purpose. We don’t have a lot of stuff, but we sure have a lot of memories.
We totally get how difficult it is to save money for travel and pay down debt, especially if you have children and are living paycheck-to-paycheck, or you have student loans.
We’ve suffered through losing our home and massive credit card debt. We’ve sacrificed a lot in the way of possessions in exchange of something that never fades, or breaks, or becomes outdated.
And remember, nothing changes if nothing changes!
What changes can you make that will reduce your outgoings by more than $120 a month (a coffee per day) so you can save money for travel?
