Tuesday, 21 September 2010

Money, money money, must be funny, in a rich man's world

YES! If you are rich, taking off travelling for a year, or why not for the rest of your life, is a lot easier. Just make up your mind and go!

But do you have to be rich to travel for an extended time?

Well, let us be honest, this kind of travel is for a privileged small part of the world's population. A rich part. However, a part that most Europeans are lucky enough to belong to. And if you are reading this blog post – hence having internet access and time, energy and opportunity to read blogs, heck, even to be able to read – then you most definitely belong to this group.


So, am I saying that anyone can save up enough money for several months of travel? Actually, I am!



Some will of course have a lot easier time than others, and perhaps a full year is long and difficult to save for – but I do believe it’s possible to save up enough money for this kind of trip in a couple of years.


When it comes down to it, it's really a matter of priorities. Now, I won't deny that I have been very privileged with a good job and salary, an apartment that does not cost too much (for Geneva standards), and no big debts (well except for my student loan, but that one is so massive that there's no way to pay it off until I'm about 55). However, I was still in the habit of having used up most of my salary by the end of each month and wondering how I would ever afford saving enough money to follow my dream. But then I started putting money aside in the beginning of each month and suddenly I was not missing the amounts I was saving and more often than not I could even add a bit more to my savings account at the end of the month.


Where did this additional money come from? I did not win the lottery. Nor did I get a big raise. What I did was following these few steps. They worked well enough for me to save more than needed for my dream in approximately 18 months. Who knows, they might work for you as well, even if your dream is not to travel, but for example to save up for a big wedding or buying an apartment.


1) If you do not already have one – start by setting up a savings account. It will be essential for keeping your current spendings separated from the money your saving.

2) Calculate the total of your monthly fixed costs (rent, phone, insurance, TV, food...). Then calculate how much is left of your salary after having paid these fixed costs. How much of this amount can you imagine doing without? Create a monthly transfer of this amount from your salary account to your savings account and schedule it for 2 days or so after you receive your salary. The devise is that money you never see, is money you never miss.

3) No matter where you live, one of your absolute biggest costs is probably your housing arrangement. As the easiest way of saving a lot of money quickly is to cut in the biggest costs, you might want to reconsider the way you live. Could you perhaps rent out a room? Do a flat share? Move to something smaller? I did my biggest savings here by chance as we decided that me and Nuno would move in together. Not everyone can make this kind of change, of course, but if you do manage to cut the costs of living make sure to directly include the saved money in the monthly transfer mentioned above! Do not let yourself get used to having more money.

4) Can you negotiate a raise? Not always the easiest, but if you manage, it's that much more money directly to your saving account.

5) Change your habits and avoid shops! I at least am the kind of partly shopaholic who can avoid buying things for months if I don't enter any shop, but who will almost always give in to temptation if actually entering a shop. This was not the easiest habit to break as one of the favourite lunch occupations for of a colleague and mine used to be to just check out shops. She would most of the time come out empty handed or with perhaps one new item. While I hardly ever came out empty handed and often with several items. So, break of habit. We started going for nicer lunch restaurants instead. A bit more money spent on food, and a bit extra weight gained, but in the long run a lot cheaper than a sandwich and 2 dresses ;)

6) Is it worth a day of travel? Before buying a new item, choosing the more expensive dish in a fancy restaurant, cutting your hair, going for a weekend break – think if it is worth a day or couple of days of travel? I used approx. 50$ as the equivalent of one day and probably saved at least a couple of hundred dollars this way.

7) Is it possible to get the service for free or cheaper, or reduce the number? I minimised the number of times I went to the hairdresser in the last year. Ok, so my hair has not looked perfect at all times, but for once I haven't felt that this was too important an issue. I was also lucky to be offered two free hair-colouring sessions, including hair-cuts, as my hairdresser since more than 12 years offered me to come to colour training sessions. And as I trust her, I knew that the result would be nice as it indeed was.

8) Cut down on food costs. I tried to limit myself to a food budget of 30$ per day. And failed miserably most of the time! But putting a limit still helped me reduce the money spent on food during this time as I paid more attention to what I was spending. I still often went for the dish I preferred but thought about it twice.

9) Make friends who are also saving! Going out for dinner with friends who are also saving for something will make it easier for all of you to perhaps chose a cheaper restaurant, cheaper common past-times, or just meet up at someone's place for some wine and talk.

10) Cut down on personal travel. Is a weekend break in Europe worth 1-2 weeks on a paradisiacal beach in Latin America or Asia? If yes, go! If no, perhaps you can find a cheaper destination or spend that weekend finding additional ways of making your dream come true.

11) Don't buy books! They are heavy to pack, almost impossible to sell, and most probably you have several unread already in your bookcases! If not, join the nearest library and lend from there. Or set up a book exchange evening with friends! (I failed completely on this point and ended up not only giving about 6-7 papers bags of books away, but spend a bus load of money purchasing them in the first place. But then books have always been a passion of mine).

12) Make your Christmas and birthday wish lists full of good and useful travel gear! Less stuff to pack when you're leaving that you won't be able to bring with you anyway. More useful things that you would have to spend your hard saved money on otherwise. Plus you will actually be able to bring small memories of your close ones on your trip. The backpack from so and so (thanks mum!!), the trekking shoes from so and so (thanks Nuno!), the lightweight rain jacket from so and so (thanks dad and Robert!) and so forth. Or even smaller things. It is nice to bring things to remind you of your friends and family, but as you will have very little space these things need to be essential.


Hope this have helped! Further tips from other travellers or people who have managed to save to something big/special are most welcome!

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