Travel is one of my biggest priorities in life. I love the freedom it brings and the ways in which it challenges me personally to grow as a human being. I love trekking through mountainous landscapes, eating food packed with spices, and bus trips that stretch on for hours through nature and sprawling cities. However, it’s no secret that travel is expensive and a big financial commitment. I save money for travel by allocating about 50% of my pay-check towards my savings.
A lot of people who I speak to are envious of how I travel often, but are unwilling to make financial sacrifices in their own lives. They’ll talk about how much they wish they could travel, but will spend their money on clothes they don’t need, loans for expensive cars, alcohol and drugs, and socialising with friends. I decided a long time ago that travel needed to be my main priority, so this is how I save money for travel.
1. Acorns investment app.
I save $100 every month with the Acorns app and it is the most valuable app that I have on my phone. You link it to your bank account and it rounds up your purchases to the nearest dollar and then invests that. For example, if you spend $5.50 on your card, then Acorns will take an extra 50c and invest that. When you sign up for the app you choose an investment profile that decides how conservative you want your investments to be.
The returns from Acorns are pretty small unless you have a lot of money to begin with, but it works better as a forced savings method. I don’t even notice the extra few dollars that are leaving my bank account, but they add up to around $50 of savings a month. I also set up a direct debit of $50 a month into the account, which is very nominal, but means I am continually adding to the account. You could easily increase this amount to make more savings.
Acorns also allows you to withdraw the money back into your account at any time. I recently withdrew $900 from my Acorns back into my high interest savings account, and the app allows you to do this whenever you want, without penalty. In this way, you can easily save money for travel and then transfer it out to your bank account.
2. I use a high interest savings account.
My ex and I had a high interest savings account and I’ve finally gotten around to opening a new one for myself. I use ME Bank, which has a total of 2.95% interest per annum, provided that you do one Paywave purchase per week on your linked debit card. This purchase can be as small as you like, so you only need to spend a few dollars a week to activate the high interest rate. The account also has no upkeep fees or penalties for withdrawing from your savings.
I still use my CitiBank debit card while travelling because it has no international ATM fees, but ME Bank is a great choice for ongoing savings. Using a high interest savings account is a good way to save money for travel without even thinking about it.
3. I live at home with my parents.
I realise that this isn’t a possible or desirable option for a lot of people, but it is a way to save rapidly because you don’t have to pay rent or bills. Even if you are planning a big trip and move back home for just a few months, it is an effective way to save a lot of money quickly. This option is of course dependent on your relationship with your parents and their financial situation, but it’s something consider when thinking about how to save money for travel.
4. I pick up extra shifts at work.
I have the benefit of working at a company that has penalty rates for shifts on Sundays and public holidays. I try to work as many of these shifts as I can, even when they are on inconvenient days like Boxing Day or New Year’s Day. I also regularly cover shifts for other workers and sometimes work six days in a week. I am also lucky to be employed part-time and so I receive annual leave when I am travelling for shorter periods of time.
Not every business pays penalty rates, but you can often make extra money just by picking up extra shifts or getting a second job on the side
5. I buy the majority of my clothes second-hand.
I’ve written previously about how I choose to prioritise travel over materialism. You can easily waste a lot of money on shopping, particularly if you shop online and use Afterpay. It feels abstract because the money isn’t in your hand and you can delay the time until it leaves your account. However, it does add up and eats away at your savings.
I buy 95% of my clothes and shoes from op shops and donate excess items from my wardrobe. This has the added benefit of being more environmentally friendly, as well as helping you save money for travel.
6. I don’t go out drinking very often.
One of the biggest sacrifices that you will need to make is reducing the amount of money you spend on drinking and socialising. If you are serious about saving money for travel, then you need to cut back on your social spending. I have tried to cut back on my drinking for mental health reasons, but it also definitely helps me reduce my spending. A night out in my city can cost upwards of $100 if you factor in a taxi, drinks, and entry costs for nightclubs. If you are going out every weekend, this quickly adds up and takes away from your potential travel savings.
It’s difficult to give up socialising because it gives you instant gratification and pleasure. However, I have found that saving this money for potential nights out overseas is much more fun because it isn’t so familiar. It’s a better time to go out drinking all night in Tokyo than it is to visit the same club that you’ve seen over and over.
Travel is an amazing experience that you should prioritise in your life. A lot of people in my life believe the fallacy that they can’t afford to travel, but often they are not prioritising it and making sacrifices in other parts of their life. You can make the choice to make travel your top priority.
What methods do you use to save money for travel?