You need money to travel- there are no two ways about it. Fortunately, you don't need to be rich to be able to travel, and you don't need a great job. You just need to understand your financial situation and be able to work around it, Understanding how to save money is what separates many people from their dreams of life on the road. These 6 tips, combined with the right priorities, can get anyone saving money immediately. Keep in mind, though, that travel is something of a privilege. That being said, preparation is the most direct correlate to success. With the right preparation can get you travelling without breaking the bank in no time.
The first thing you should do is make a monthly budget. You will need to assess how much you have coming in every month versus how much you spend. Keep track of your expenses in a spreadsheet or in a journal- no purchase is too small, so record them all! Compare these monthly expenses to your monthly income to establish your financial foundation. This is ground zero.
Open A Tax Free Savings Account
A Tax Free Savings Account is a savings account where you are not taxed on any of the interest you earn. I repeat, you are NOT taxed. Miraculous, I know. These came to be in post-recession Canada as a means to get folks saving. Unfortunately they have a cap on the yearly contribution- $5500- but tax-free money is my favourite kind of money. They are great for storing your savings leading up to a trip, or just keeping as an all-around savings account. I strongly encourage you to look into them. Tangerine and PC Financial usually offer some of the best rates.
The Cost of Being Social
I don't drink, I don't smoke, and I don't drink coffee. Those three things alone will cost you a fortune over time. My suggestion to those of you who partake in such pasttimes? Just do them less. You need not become a saintly recluse, but if you want to save money to travel you will have to find ways to spend less money on these habits. Aside from doing them all less, you can do them all differently. Drink at home with friends instead of going out to a bar, roll your own cigarettes, and get a travel mug to bring your own coffee. Some cafes even give you a discount if it's your own mug, so ask!
The Cost of Being Lazy
I love going out to eat because it's just a heck of a lot easier than cooking. I worked in a restaurant as a cook for a few years, and unfortunately that partially spoiled my desire to cook at home. That being said, cooking at home is WAY cheaper. There are lot's of cooking websites and recipe hubs online that are free and easy to follow, regardless of your diet. Plus, learning to cook will save you money while backpacking if you can find hostels with kitchens. It's a worthwhile investment and a HUGE money saver.
Most travel bloggers will tell you that it's a great idea to get travel credit cards. You can earn a lot of points with them, thereby earning lots of free travel rewards. Which is true AND awesome. However, you should be cautious. Credit cards are a slippery slope that can be detrimental to your budgeting plan when misused. I suggest two ways of navigating this:
- Only use the cards when you have the money to pay them off immediately. That way, you get the points and avoid the insane interest rates credit cards have. Plus, it's way better for your credit rating if you pay your bills on time.
- If you don't have that sort of discipline, which not all of us have, then I suggest you only use your credit card after the previous purchase has been paid off. Use it for a purchase, and then don't use it again until that purchase is paid for. That gives you some incentive to actually pay it off.
Many travel credit cards have income requirements, and many of the best cards are actually just for Americans. Nomadic Matt has a good article on travel credit cards for the US. For Canadians, many large newspapers publish yearly reviews of travel cards which are always worth keeping an eye on. Stay tuned for my article on Foreign Exchange fees for Canadian credit cards- riveting, I know!
You don't need a cellphone AND a landline. You don't need cable AND the internet. Do you actually need all that data for your smart phone? While it is nice to have a super-ultra-mega-new phone or a sleek and sexy new computer, chances are you can't realistically afford those AND your trip- so prioritize.
Check our our article on Priorities for more tips on getting financially prepared for your next trip, and stay tuned for more advice down the road! For general backpacking advice and travel tips, check out the Advice section.