Updated on July 22, 2016.
The hardest part about a RTW trip is figuring out the money.
It's a huge mountain to climb, but not impossible. The following are 20 tips on how to save money for your upcoming around-the-world trip.
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But regardless of whether it’s a big or small number, it’s best to have a plan in place to implement!
Create a savings plan. A good savings plan will have 5 steps:
- Assessment – Compare your trip plan to the reality of your financial situation. Is it feasible, or are you dreaming too big? Make hard decisions. Be honest. Once you’ve got a general idea of your trip’s overall cost, compile a spreadsheet that lists your income vs. your expenses to see how everything stacks up.
- Setting goals – Your savings plan should comprise several goals, some short-term and some long-term. List your goals in specific numbers and don’t be shy to shoot high. But, not so high it kills your enthusiasm (people have traveled around the world on nothing!)
- Creating a plan – The savings plan details how you’ll accomplish your goals. This could be removing unnecessary expenses (see below!), setting a strict spending budget, or adding additional income to meet your goals.
- Implementation – Put your plan in motion and maintain it.
- Monitoring and reassessment – As time passes, your plan will evolve as your spending habits change. Take a look at your progress every month and scrutinize the budget for possible adjustments.
Set your dream
The first of our tips for saving money is to remember why you’re doing this and to remind yourself every day. Put a picture on your wall, or a map with pins and strings, for constant revalidation. Saving money is a slog, but anyone can do it if they set their mind to it.
- Reduce your expenditures.
- Simplify your life.
- Sell some stuff.
- Earn some extra income.
- Get into habits of frugality (save without shame!).
Assess your expenditures
Make a spreadsheet and list out every one of your daily/monthly expenditures. Organize them into two columns: “Needs” and “Wants“. Slowly eliminate all the “wants” from your list of purchased items.
Start a dedicated travel fund
Create a new account with your bank called “I’m Outta Here” and feed it monthly, weekly, or daily! Make it easy to transfer money over from another account and every time you go online to check your balance, transfer some money, even if it’s $5. Make it fun. Make it a habit. Make it natural. Make it painless. Revel in its growth!
Cut back on your lunch
It may be as simple as not getting a $2.50 drink (water is underrated as a beverage!) but make a point of spending less than $8 on your lunch. The savings will add up. Say you go out to eat five times a week. Just trimming your lunch cost from $12 to $8 saves you $832 a year! For even more savings, pack a lunch if you’re able to.
Cut back on coffee
Eliminating coffee from your life can be impossible, and coffeeshops are an essential place for many people to socialize, study, and work at, but that doesn’t mean you have to spend a fortune on caffeine! Think drip coffee instead of that ultra mocha grande with extra espresso shots. Paying $2 instead of $5 every day would save you $1,095 a year!
Check out this cool coffee cost calculator and see what that caffeine is costing you!
Eat out less
Restaurants put more holes in a saving plan than a woodpecker on amphetamines. Plus, learning how to cook for yourself is ridiculously gratifying. The Food Network and Recipes.com have a near limitless repository of delicious recipes to start you off. Even in the United States, you can comfortably eat on $40 to 50 a week if you cook for yourself. Simple unprocessed foods like rice, beans, chicken, pasta, potatoes, and vegetables are healthy and cheap.
Reduce or eliminate your car usage
In the United States, it’s almost impossible to live without a car unless you live in the largest cities. Our distances are just too far apart, and we don’t have extensive public transportation! The easiest way to reduce your car usage is to sell it, but that’s only feasible if you’re about to leave on a long-term trip, or happen to live in New York City. Uber and Lyft are great options for daily car sharing if you need to go long distances. But even if you can’t totally live without a car, bicycle more and shop locally. Any little bit helps!
Kill the cable TV dead
You’ll be surprised how fast your savings add up without cable TV. Several friends of mine pay up to $150 a month for their cable. That’s insane: $1,800 a year. Even a more reasonable rate (the average monthly cost of cable TV in the United States is $99, as of 2016) still ends up being $1,188. That could fund an entire trip to just about anywhere in the world! Plus, there are plenty of free and cheap ways to get your entertainment. Netflix is $10 a month. Books are cheaper than movies.
Reduce your utilities bill
Keep the thermostat low, put a sweatshirt on. Open the windows instead of using the air conditioner. Turn off the lights. Shorten your showers. Of course some areas of the country have more moderate temperatures than others, but even a few bucks a month adds up to your savings. The average utility bill in the US ranges from $90 to $140 a month. If you can trim 15% off by being more efficient, doing less loads of laundry, and preserving energy, you could add $225 to your annual savings.
How to save money? This one’s a no-brainer. Not only can it save you $2000 in a year, it can save your life! Can’t do it on your own? Get someone to help you keep accountable.
Cancel your gym membership
Instead of that hefty gym membership, exercise in the great outdoors, run in the fresh air. Swallow your pride and utilize those strange public fitness logs in the park. The world is a cardio machine. Watch the calories turn into greenbacks!
Reduce/Remove the spa treatments
Luxury, it feels so good, but soon you’ll have to realize that those massages and mani-pedis won’t help you travel any sooner. Make the hard choice and bypass the high-priced spa day.
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Get fewer haircuts
If you get a haircut once every two months as opposed to every month, you’ll be saving 50% of your expenditures at the stylist. Considering the cost of hair care, over the course of a year this will really add up. Of course, for the sake of society you can still keep trimmed: just do it at home instead of at the hairstylist.
Borrow your reading material
Utilize your library. Utilize your friends. Utilize Paperback Book Swap.
If you’ve already sprung for an Ereader (useful for your trip as well) there are plenty of places online to download ebooks for free. Here are the sites with the most comprehensive catalogs:
These sites amount to more books than you (and everyone you know) could read in your lifetime. So buckle up!
Do Free Things
- Get University educated – The website Open Culture has assembled a giant master list of free online courses on everything from Art History to Quantum Mechanics from great schools like Stanford, UC Berkely, even Oxford!
- Get non-university educated at Khan Academy or Tedtalks.
- How about Academic Earth. It’s an online repository of videos of academic courses at Ivy League schools like Yale, Harvard and Stanford. The only thing it doesn’t have is Skull & Bones.
- Learn to code – hello Codecademy!
- Play sports: you know, cycling, tennis, basketball, soccer, etc. Find recreational teams in your area.
Buy second-hand clothing
New clothes are expensive, and passé! Thrift stores and vintage/second-hand clothing shops are the new cool. You can usually save the greater part of 75% over their new counterparts and still look cute. Since you sometimes need to still dress well for business or formal occasions, shop online rather than expensive brick & mortar stores.
Stay in at night
Going out to bars and clubs will force your account balance to go down faster than a Swiss cheese boat…with only a headache to show for it in the morning. Keep your travel goals in mind and invite your friends over for drinks. That $8 bottle of wine would have cost $25 at the bar!
Bonus tip on how to save money: keep your distance from financially irresponsible people!
Watching your friends going out every night, buying expensive electronics, expensive cocktails and new boots will destroy all your hard-fought motivation. But don’t let your dogged determination to save for vacation make you into your friend group’s party pooper: you can save for travel, and still let loose every once in a while.20 Tips on How to Save Money to Travel,