Just as important as traveling cheaply, you need to live cheaply at home in order to save for that big trip. The amount you save depends on your wages. It is not what you make but what you spend – halve your extras by at least 50%. You will need less if able to work on the road.
1. Work Hard. Get a part-time job or freelance for extra income.
2. Budget. Initially create a spreadsheet in Excel or other program – and start tracking every single purchase or payment for a few months to know here your money is spent. This is a huge eyeopener for many people but is the first step in consciously deciding where to change your spending habits. With that information, sit down and work out a budget, and stick to it. Difficult initially, but easier if you keep your goals in mind. The six categories are rent, food, bills, credit card and other debts, social and savings. Stay focused and motivated : put up pictures of your destinations to encourage sticking to your budget. Use the app Trail Wallet to keep track of spending.
3. Set up a separate travel account separate from your day-to-day expenses. Get the best interest rate in an account that has no fees. Once you figure out your budget and the realistic amount that you are able to save, have your bank automatically transfer that amount to your savings every month or every two weeks and do not touch it.
4. Purge. Get rid of all the things you don’t need at a garage sale, Craigslist and eBay to jump-start your savings.
5. Stop Buying. It sounds simple, but it takes a great deal of restraint especially if you are accustomed to buying the newest gadgets or clothes. Determine the difference between what you need and what you want. The next time you want to buy something, ask yourself if you really need it. Most likely the answer is no. When you do need to buy items, try to buy them used, and when something breaks try fixing it first.
6. Tell family and friends your goals so they understand why you may say no to drinks and dinner or suggest a cheaper restaurant and that you are not being anti-social.
7. Get Rid of Debt. Credit card debt should be the first paid off because of the high interest rates.
8. Cheaper Accommodation. Move in with parents, get a roommate, house sit, or get a cheaper place. Rent a spare bedroom on AirBnB (and meet people from all over the world).
9. Shop Local. Markets have the best value and freshest, best quality food. Plan your meals around your grocery store’s sales. Write a list when you go shopping and stick to it! Only take the budgeted amount to the store. A plus is you are supporting local small business. Start eating healthier, unprocessed foods. They are cheaper. When you make meals, make enough for leftovers to bring to work for lunches.
10. Buy in Bulk. Bread, meat, fruits and vegetables can be frozen. Other products don’t spoil. Some buy all their bulk items on Amazon. They have the best prices and there is no membership.
11. Cook at Home. Make extra at dinner for lunch the next day. Use a travel mug for made at home coffee.
12. Second-hand Clothes from thrift stores. Real bargains often on clothes that have never been worn.
13. Socialize at Home. Have potluck meals with all your friends. Store bought alcohol is much cheaper than in a bar.
14. Be the Designated Driver. If you do go out, you save on taxis and alcohol. Share rides with friends who can chip in.
15. Use Public Transport or Cycle/Walk to work. Save on parking, fuel, vehicle expenses and get exercise.
16. Save on Utilities. If you have cable, get rid of it. There’s nothing much to watch anyway, you won’t be subjected to guilt-inducing ads and you won’t have to pay the outrageous cable bill. One thing I cannot live without is internet and there are plenty of sites to watch movies and television shows online if you have the urge.
Obviously we are not going to cut out electricity, but here are a few ways to lower your bill. Dry your clothes outside in the summer, turn off all lights when you are not using them, do not use the heat dry cycle on your dishwasher or just wash dishes by hand, and install CFL light bulbs.
17. Gifts. Give a gift of service or a home made gift instead of buying an item.
18. Subscriptions and Memberships. Get rid of subscriptions to magazines and any memberships you can do without. Go for a run, walk, surf, or ride a bike instead of going to the gym. It’s much more fun too! The library is a great resource for renting DVDs for free, downloading Kindle titles, reading magazines, listening to audiotapes and borrowing books
19. Reward Yourself. Occasionally (once a week or monthly), buy some (second-hand) clothes, go to the movies or a concert or have a getaway at the half-way point of your savings. Your trip will be your greatest reward.