Travel Budgeting 101 is a regular series helping you with travel budgeting and saving before, during and after your travels.
In the first instalment, I talked about the importance of choosing your itinerary carefully after Rich and I got overzealous about how much ground we could cover in our upcoming trip. In this instalment, I’m sharing how to focus on saving for travel while still enjoying life.
As with any savings goal, I keep track of my upcoming expenses and the status of my savings compared to my final goal with a budget spreadsheet. The steps below are what I follow to make sure I have adequate funds for my travels while enjoying life along the way.
Determine your timeline
Figure out when you want to travel and how long this gives you to save up. When you have your timeline break it down into monthly or fortnightly budgets, or whichever works best for your situation.
Set your savings goal
Determine how much money you need for your whole trip including airfares, other transport, accommodation, tour bookings, travel insurance, spending money and any other things you may need. Be specific. If you know you need a suitcase before you go, factor these sorts of items into the overall budget now so there are no nasty surprises.
Determine how much you’ll need to save each month
Now that you have your savings goal, divide the total by the number of months you have until your departure date. From here you can break it down further if you keep a budget on shorter timeframes than a month.
List your fixed expenses
List all of your fixed expenses that are non-negotiables such as rent, electricity, gas, internet service, gym memberships and any other accounts you keep. At this stage, if you think there’s an expense you can scale back or remove from your list then give it a go.
List your variable expenses
Now it’s crunch time! If you’re not sure what your variable expenses are off the top of your head grab a recent bank statement to see where you’re spending your money each month. Think everything from groceries, eating out, weekend outings and anything else you spend money on. Sometimes I find it easier to print these out and highlight what’s relevant so I can quickly add everything up at the end.
Once you have tallied your variable expenses see what you can eliminate or reduce. You may even notice a pattern with unnecessary spending that you can stop. Afternoon snack attacks are my Achilles heel!
Have fun with your money
Now that you know how much you need to save each month, the sum of your fixed expenses and the sum of your variable expenses you can figure out what your spending money can be each month. To me, budgeting and spending can be a lot like yo-yo dieting. If you completely restrict yourself and don't get any enjoyment along the way to your goal, you are going to grow exhausted and start resenting the process.
Give yourself a reasonable amount of money each month to enjoy the things you love, without going overboard, so you can still reach your savings goal.
Earn some extra income
The internet has provided an array of online working opportunities that you can take advantage of today. From something as simple as helping a person out with a job on AirTasker to setting up a side business, the additional income and possibilities that come with marketing your skills outside your regular work can reap great rewards.
For example, over the years I’ve become good at writing resumes for people so I started offering this service to people to help them on their job search. The additional income has been great and helping people land interviews is even better.
Approaching your travel savings from all angles by knowing what to save each month, not spending frivolously and earning more will propel you towards your savings goals before you know it. This is how I worked towards getting my funds ready to move overseas. While it’s not a glamorous process, you can make it manageable for yourself without feeling restricted.
Over to you. How do you save towards your travels? I’d love to hear your tips in the comments below.