How to Save Money for Travelling the WorldEmma - 13 November 2016
We're about to embark on six months backpacking in SE Asia. I am so excited!
That's six months of trains, tuktuks and boats. Beaches, jungles and mountains. Noodles, seafood, and dumplings.
On the other hand, it's also six months of no income, hotel bills, eating out three times a day*, and a shedload of train, bus and plane tickets. We're budget travellers at heart, but even with our wily ways, this isn't going to be a cheap trip.
It was tough saving up thousands of pounds for the trip, but we actually ended up saving more than we expect to need! Realising that lots of other people are probably in the same boat we were a year ago, we put together a cheat sheet of how to save money for travelling the world, filled with the methods that helped us.
*More if I get my vote...
How much money do I need for six months travelling in SE Asia?
The worst part is that we can't put a finger on a specific number we need to save! When we try to clutch at straws and guess, the numbers are all over the place. Do I need £10,000 just for me, or is £6,000 enough for both of us?
My final estimate hovers around £10,000 between us, so long as we stick to our budget and itinerary. I have not included flights in that figure, which I would place a guess at being £1,000 each (getting to Asia, a handful of essential flights out there, and the flight home). If you want to include that, it is £12,000, or £6,000 each.
That works out at £1,000 a month each. Or £250 a week. Or £35 a day.
We need to give ourselves considerable buffer since this is all guesswork, but now we have a number to aim for. So the question is, how to save money for travelling fast?
How to Save Money for Travelling
The lion’s share of our saving for travelling has come from our 9-5 jobs.
Many people choose to work while they’re abroad, in order to supplement their travel fund. The bonus of this is that you get to live and work in the holiday destination, so it may seem like the best of both worlds. For our part, we decided not to do this. The salaries we get paid in the UK are far more than we would get in Asia, so we would prefer to work a month longer in the UK, rather than work three months of our six-month trip.
Other friends who have saved money for travelling have done so by working overtime. They can vouch for the fact that time goes by much easier when you know what the money will be going towards! Sadly neither of our companies offer paid overtime, but we reckon pulling a few extra shifts would bump up your savings in no time
My top tip for getting extra from your salary is to not take all your annual leave. We left in November, and I had only taken 5 days of my annual holiday allowance. This meant that I had just under 20 days of untaken holiday to be reimbursed pro-rata. If you think about that, it’s an entire month’s salary!
If you want to save money for travelling the world quickly, you’ll need to take drastic action! We’ve been supplementing our salaries by using eBay to sell a few unwanted bits and pieces lying around the house. M was astonished that he could sell £1000 worth of stuff, and not even notice it was gone. This works especially well if you’ll have to move all your stuff into storage when you’re away.
If you’re going away for a long period of time, sell any belongings that will depreciate in value, and buy an equivalent when you’re back home. For example, sitting in your driveway for six months won’t do your car any good, and you could use the money!
If you’re lucky enough to own your house
- Rent out a spare room, if you can. Even if it’s just through AirBnB once in a while
- While you’re away, rent it out. If you’re paying off a mortgage then you can pay it through rental income. If you already own the house, I know people who are funding full time travel entirely through their home’s rental income
- Watch out for council tax if you’re leaving the home vacant – many councils still expect you to pay it, and some even charge you double if the home is left empty
If you’re renting
- You’re in a much simpler situation than if you owned a property
- Do everything you can to ensure landlord fees, deposits, etc don’t take a chunk of your money right when you’re leaving
If you’re staying with your parents
- You’re in the dream situation savings-wise!
- Try doing some work around the house to minimise any rent they might be charging you
The key thing to realise when working out how to save money for travelling (or for anything!) is that because of the money taken off through tax, reducing expenditure will have a much bigger impact on your ability to save than simply earning more. If you earn another £100 you will be taking home £35 to £80 of it depending on your rate of tax. If you save £100, you will gain £100. So spending less is better than earning more! Here’s a few tips on budgeting that might help you save money for travelling!
First off, if you have ANY debt we'd advise paying that off before putting money into savings. It will only get worse. Everyone has different tolerances for debt, but make sure it's as low as possible. For example, if you have considerable credit card debt, consolidate all of your cards to the one with the best rate.
Next, take a look through the direct debits that come out of your bank account. You can usually see a list of these on your online banking. Question whether or not you need all those regular costs, as this steady, unnoticed trickle of money is what clobbers you! This might be magazine subscriptions, or unnecessarily expensive phone contracts, or gym membership, or Netflix subscriptions. You may decide each of them are worthwhile, and that’s fine. What’s important is to examine them and be realistic about how much they are costing you.
Make a concerted effort never to let an annual service renew into the following year without contesting the renewal price. It drives me mad that companies do this, but it’s things like breakdown cover, or home broadband, or insurance payments. They automatically renew at a much higher price than the previous year, as lots of people just let it slide. Call them up, and you could save hundreds of pounds.
Ensure that when you leave the country, you will not be in contract for anything. This might be a 24-month phone contract you have to buy your way out of, or flat rental you have a few months left on. Avoiding this takes foreplaning, but is worth it to avoid being bitten just before leaving.
Cut out unnecessary treats. This is a difficult one, as this is where saving actually starts to hit your quality of life, but it will be worth it. We all have little extravagances that began as treats, but turned into habits! A common example is having a takeaway every week. Work out how much you’re actually spending on takeaways. Or perhaps your little luxury is nights out. Or perhaps you belong to a particularly upmarket gym. Or love to eat meals out. We all need a treat once in a while, but it should be a treat, not a habit!
Try cutting out one thing a month. Perhaps this month you could go vegetarian? Or you could have a month where you don’t drink alcohol.
If you just use the running machine at the gym, consider scrapping the £60 a month membership and jogging outside instead
Perhaps use a budgeting app to put your spending into perspective. This is a good habit to get into when you’re travelling anyway
No other holidays! If you're a travel fiend like me, you'll find this one difficult too. Holidays are expensive, so either go camping down the road, or do nothing. It pains me to say it, but it really helps…
Look into your living costs. M and I moved in together, and this could halve your accommodation costs. Equally, turn off lights, and don’t whack up the heating, to keep your bills as low as possible.
Shop in cheaper supermarkets. We found it works well to do a weekly shop rather than going to the shops every evening, as we spend a lot less AND it saves us time.
Buying Stuff For Your Trip
Don't feel like you have to go out and buy all the best kit to go travelling with. My Decathlon backpack was about £20, and has served me well for years.
While you may want a £1000 DSLR, you could travel for a whole month extra with that money!
Don’t buy things here that you can buy for a quarter of the price when in Asia. I realised when I started buying travel accessories online that they were all being delivered from South East Asia anyway!
Consider carefully before buying your flights. Don’t buy them too early, as plans might change. They tend to be cheapest around six weeks before departure. Only buy a return trip if you are 100% certain that you will want to be leaving from that city on that day. If not, buy a single as airfare refunds are terrible!
Your mum says it, all travel blogs say it, and now we’re saying it… YES you need travel insurance, and NO do not skimp on it. We decided on World Nomads, as they seem to be in a class of their own.
Managing Money for Travelling
Have an exclusive savings account and ensure you never take money out!
You can get some good regular savers which offer good interest, or you can just use an ISA (UK specific, I’m afraid!)
M always transferred a chunk of money straight from his paycheck into his savings, whereas I always transferred what was left of my paycheck at the end of the month (just in case an unhappy surprise pushed me into my overdraft accidentally). You need to work out which method works best for you.
Be absolute and have a spending limit for the month. if you’re spending a lot that month, no you can’t go out for after work drinks. Invite friends round for board games rather than going out for cocktails. Be serious about your saving.
So that's our summary of how to save money for travelling the world! Using these methods I’ve genuinely been able to save money for travel faster than I thought possible. Budgeting can be tough, but I'm 100% convinced that every penny saved will be worth it.
Have you gone on a similar trip? How much did you end up spending? Do you have any saving tips? Let us know in the comments!