03 Sep Tips for Saving Money to Travel
If you’d have said to me five years ago that Andrew and I would be able to save nearly £30,000 in around two years, I’d have never believed you. Even just three years ago we were both penniless ex-students with overdrafts and mountains of student loans; we haven’t exactly been living on bread and water, forgoing holidays or staying in every night either. So how have we managed to save money for travelling?
Setting a target – how much does it cost to travel the world?
When we first started planning our trip, we had no idea how much it would cost to travel the world, so we plucked an initial target of about £50,000 out of the air. Over time we’ve reduced this significantly – partly because we’re eager to get going and partly because we’ve since read about people who are out there now, travelling the world on a budget. People like Wandering Earl, who left to travel the world with only $1,500 in his pocket and is still going over 12 years later. So, inspired by this, our savings target now sits at £28,000 and we’re hopeful that we can find work while on the road to top up our account as we go.
How to save money for travelling
By western standards, we’ve always lived a fairly frugal life; we don’t buy a lot of clothes, gadgets or ‘stuff’, we don’t have big expensive nights out every weekend and we don’t live in a luxury apartment in zone one or two of London. Still, saving money for travelling while living in one of the most expensive cities in the world has been a challenge – here are a few of our tips for saving money to travel:
Pay off your debts
I got a credit card when I was 18 and by the time I’d finished my degree I’d racked up at least £1,500 of expensive debt on it. So, the year between graduating and starting my masters I worked full time to pay it off completely. Upon finishing my masters I also had to pay back a £5,000 career development loan, which took two years to do. After that had been paid off though we could really begin saving. The only debts we still have are our student loans; small repayments come off our salary each month towards this and don’t cause too much hassle.
Draw up a budget
We set up a spreadsheet listing all our monthly earnings and outgoings. This is such a simple thing to do, but believe me, it makes figuring out how much you can afford to save each month so much easier.
Get a savings account and set up a direct debit
We shopped around to figure out which savings accounts would provide the best interest rates and set up direct debits so our savings would go out of our accounts automatically each month. We now put £250 each into a regular saver account every month; which we earn 8% interest on. We also put £1,000 per month into our ISAs, which generate 3% tax-free interest.
Reducing your outgoings
This was a difficult one for us because we already do a lot of the things that can easily save money, for instance, we always bring our own lunch to work and we don’t buy take-away coffee everyday or have expensive gym memberships. However, there are a few ways we’ve managed to reduce our outgoings even further:
- We reduced our rent from £930 to £750 per month by moving from East London to South East London.
- We paid for a year’s car insurance up front instead of per month and saved around £150.
- Andrew joined the bike to work scheme saving around £20 per month on petrol.
- I became a member of our favourite art-house cinema, the Curzon in Soho. This saves us 15% on all our cinema tickets, which usually cost £15 each. Membership cost £50 for a year, but since we go to the cinema a lot it’s already saved us money.
- I got a Taste card through work for only £15, reduced from £40. This gives us 50% off meals at different restaurants around London; we try not to eat out too frequently anyway but this has come in useful when we’re out and about.
- Books are another weak spot for me. On average, I used to buy two or three books per month, the cost of which added up. Now, I get books for free from the library or swap with people at work.
- We changed our monthly internet package as we regularly went over our old limit and ended up spending more.
- We cancelled our expensive phone insurance and found some cheaper online, reducing the cost from £12 to £6 each per month.
Increase your earnings
Fortunately, over the last couple of years I’ve managed to increase my salary a few times by asking for pay rises. As a teacher, Andrew earns a decently salary that increases by about £1,500 each year. To make some extra cash I have also taken on some freelance work for the last few months before we leave. We’ve also managed to make some money selling our stuff on eBay and Gumtree – in fact, we made around £500 on eBay last year.
Do you have any tips on how to save money for travelling?