First, let me acknowledge that Jonathan and I are very privileged, and we don’t discount how much our family backgrounds, education and career opportunities helped us be able to afford this trip. That being said, once we decided to start saving for this trip, it was a lot easier (and faster!) than we thought to reach our goal.
When we first started telling people about our trip, I was prematurely defensive. I was sure that everyone would make comments like, “Wow, must be nice to go on vacation for a whole year,” or “Gee, I wish I could afford that.” Surprisingly, we got very few of these comments. Most people were genuinely excited for us, whether they were interested in taking a trip themselves or not. However, many people were openly curious about how we could afford something like this, and understandably so.
In fact, the few people who did make “must-be-nice” comments (interestingly enough) were people who came from similar backgrounds as we do, and most of them even made more money than we did. All that to say: This post is meant for people in similar situations as we were. If you have extenuating circumstances that preclude you from saving thousands of dollars, I don’t want to sound flippant about how easy it is to save money to travel. But for the majority of people reading this post, I really believe it when I say: If you want to do this, you can.
Jonathan and I started saving for our trip in summer 2016, and we actually met our goal within the year. This was surprising even to us; looking back, here are a few of the key factors we think helped us save money so quickly.
1. Create a separate savings account—and don’t touch it!
If you want to save up a good chunk of money for long-term travel, setting up a dedicated savings account would be our first recommendation. Make sure your savings account isn’t charging you any fees (there may be a minimum balance and/or monthly deposit requirement to avoid fees; check with your bank), and once you put money in this account, don’t touch it. Seriously. Just let that number grow. Looking back now, Jonathan and I wish we had set up a high-yield savings account much earlier, so I’d recommend starting there to get the most out of your money. This Nerd Wallet post was really helpful when we were deciding where to open our account.
2. We didn’t have student loans.
I know this is something you can’t control now if you already have student loans, but I feel like it should be acknowledged. Both Jonathan and I were very fortunate to finish our undergraduate educations without any debt, and I also received my master’s degree without taking out loans (thanks to the tip above! we changed our “school” savings account into a “travel” account after I graduated). Many people I know who have student loans basically pay a second rent each month, which is a good chunk of change we could put directly into our savings account instead. If you are paying student loans, maybe when you finish, you could continue paying the same amount each month but into a travel fund.
3. We didn’t upgrade our lifestyle when we made more money.
In the two years prior to our leaving on this trip, we both changed jobs and received pay raises, which was fortunate timing. However, even after we changed jobs, we didn’t move to a more expensive apartment (though it definitely would have helped with our commutes), we didn’t buy new cars, we didn’t upgrade our smartphones, we didn’t even start buying more things or eating out more. We maintained our spending and put all our extra income into the savings account. (This is also why I suggest to continue “paying” your student loan amount to yourself after you’re debt-free.)
4. We increased our income.
So often, when reading posts about how to save money for travel, the lists focus on how to decrease your expenses. We’re not going to tell you to make coffee at home or cancel your cable subscription, because if you’re really serious about saving money, you probably already do these things. But there are two ways to save money: decrease your expenses and/or increase your income. As I mentioned above, Jonathan and I were fortunate to get pay raises while we were saving, but Jonathan was already working a lot of overtime at his job. My full-time job (public librarian) didn’t allow overtime, but I was able to work as an hourly librarian for two other public libraries on my days off. If your job doesn’t allow for overtime or per diem work, consider picking up a part-time job. Yes, you’ll be working a lot, but the long weeks will be worth it when you’re enjoying your morning coffee in Colombia. I also did some freelance writing, and we sold a lot of stuff (clothes, furniture, electronics, etc.) on Poshmark, Craigslist and Facebook Marketplace.
5. Transfer the money you don’t spend.
Let’s say you’re serious about long-term travel, and you start forgoing purchases in order to save money for your big trip. This part is important: When you pass up treating yourself to a lavender latte or buying that new pair of shoes, physically transfer the money you didn’t spend into your dedicated savings account. Otherwise, you might have passed up a purchase today, but what’s going to stop you from spending on something else you don’t need tomorrow? Go ahead and put that money (even if it’s $4!) into your travel account so you know you won’t touch it. (Make sure you check your bank transfer limits first so you don’t get hit with any unnecessary fees.)
6. Don’t buy things you won’t take with you.
Once Jonathan and I knew we wanted to take this trip, we pretty much stopped buying anything (besides consumables) that we weren’t planning to take with us. Because we only brought one backpack each, this means we pretty much stopped buying anything we weren’t going to eat, drink or otherwise use up before we left. And because it took us so long to actually leave (more on that later), we were spending relatively little for a long time.
How much money do I need to save?
Well, that’s all great, you might think—but how much moolah am I expected to put into this special travel account? As we mentioned before, there’s no one-size-fits-all budget for a RTW trip. I’m going to include a section of our FAQ post here, with a little more detail added:
It totally depends on what areas you want to visit, how long you want to travel, and what type of lifestyle you want to maintain on the road. I would recommend coming up with a number that includes three things:
– A monthly budget x how many months you want to travel
– A set amount of “extra” money for expensive flights, splurge activities or emergencies
– A “nest egg” to make sure you have money to live off when you get home (especially if you don’t have a job lined up)
We did a lot of research about other RTW couples (and the cost of lodging and food in different areas of the world) to determine our monthly budget. You can travel (comfortably) long-term for as little as $2,000 per month, depending on where you’re visiting, but obviously you could spend a lot more. [Update: We traveled very comfortably and did plenty of expensive activities for an average of $2,300/person per month. Check out our comprehensive end-of-trip expense report here.]
We especially liked Round the World Couple‘s budgeting posts. They shared detailed posts including what one month in South America cost and exactly how much six months of travel cost them. You might find their website helpful as well! We plan to share similar budgeting posts in the future, once we know how far our funds will actually take us. [Update: We now have an entire page dedicated to Money & Budgeting! Check it out.]
Any questions? Ask away!
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