Travel should be on everyone’s bucket list and in order to do more of it, you need to save money for travel. These are our 7 easiest tips to save money for travel this year.
After working in 9-5 jobs and rarely seeing each other, we decided we needed a change. Saving money for travel became our top priority. By using all of the tips below, we were able to save over 50% of our income and build up enough money to travel full time for 2 years.
If you are looking to travel full time or even just save up for that dream trip to Europe, these tips will help you get there! We’ll cover tips to save money for travel, the best travel savings account, creative ways to save money for travel, how to save money for travel, and more!
This post is all about our easiest tips to save money for travel this year!
TIPS TO SAVE MONEY FOR TRAVEL:
1. TRACK YOUR SPENDING
This is our best recommendation if you are looking to save any money at all. Track your spending. Once you know where all your money is going, you will be more conscious of your spending and inevitably start saving money.
We use the free app Mint.com to track all of our expenses. The app connects to all your credit card accounts, checking, and savings accounts to automatically categorize your transactions. You can then see how much money you spend on groceries, dining out, shopping, online orders, and every other category you can think of.
This was a huge eye-opener for us and we realized we were spending so much money on useless things like trendy clothes, random Amazon purchases, and fast food.
The best part of this tip is that you really don’t have to do anything to start cutting down on expenses. Just track your spending and be aware of how much money you are really spending every day, month, and year.
Added bonus, you can be sure you are never incorrectly charged or have any fraudulent charges on your account. I once was charged $40.00 for fries instead of $4.00 and found it quickly while going through my charges for the week.
Cut Back on Large Spending Categories
Now once you are ready to make a serious dent in your savings, you will need to target the largest spending categories you have. You may want to cut back on Starbucks, but that is probably taking a very small percentage of your overall budget.
Instead, you should look at your housing expenses, transportation, and food. Your housing will likely take up the largest portion of your budget. If you are able to find ways to save money on rent or a mortgage, you will be getting a much higher ROI than trying to save on your weekly frappuccino. Consider moving to a less expensive neighborhood, getting a roommate, renting on Airbnb, picking up some extra work at your apartment complex for a discount on rent, or even refinancing your home.
Transportation is usually quite expensive if you own or lease a car. Plus with maintenance, gas, and additional ride-shares or public transportation, it can really add up. Make sure the car you have makes sense for you. If you drive a long way to work (or sit in traffic), be sure to have a car with good gas mileage to save on gas. Larger cars are usually not needed nearly as often as people believe so if you only really use your car’s trunk space once or twice a year, consider downsizing and borrowing a friend’s car or renting one when you need the larger space. Lastly, we always recommend buying a used car. Even a car just 1-year-old and used will be far less than one off the lot and can save you a ton of money.
Spend on What Makes You Happy
Saving money can be stressful at times and certainly overwhelming. However, it should never compromise your happiness. You should always spend money on what makes you truly happy. The key is to cut back on categories that you don’t really care about. I personally don’t care about my car. I don’t drive other people that often, I don’t have kids, deliver anything, and most people rarely see my car. In my case a used car that is 5-10 years old is perfect. But maybe you love cars. Maybe you love driving all your friends and you know all the stats about your car. Then that is great. You should spend money on it. Just don’t get confused between what makes you happy and what you think should make you happy.
While we were saving over 50% of our income towards traveling, we still had date nights where we would go out to a nice dinner. We also had an annual pass to Disneyland. We would take our weekends and stay in a hotel and go to Disneyland. It was certainly expensive but it made us so happy and we were able to cut back on other categories.
Make a Savings Goal
I am a big goal-oriented person. When I have goals and I keep them top of mind, I am really likely to complete them. If you are similar, then make a savings goal for yourself. A savings goal can look like anything you want it to. You can aim for an overall balance you want your account to be at ($20,000) or a percentage you want to save from each paycheck (35%).
You can also set up a savings challenge where you save all the spare change from each purchase. There is even an app, Acorns, that will connect to your credit cards and round up every purchase for you.
The possibilities are endless, but catering your goals towards the ways you are motivated is always a good thing.
Cancel Unused Subscriptions
This can be a simple solution to save a good chunk of money every month. Once you start tracking your spending you will be able to spot any subscriptions you are still paying for that you no longer use or really need. Subscriptions are everywhere these days and most of us have tried a new service only to realize we didn’t really need it. With food delivery subscriptions, streaming services, wine clubs, online articles, cable bills, and any number of other things, this is a great way to cut the fat and just keep what you really use. We even canceled Netflix because we just weren’t watching it enough.
Set up Direct Deposit to Save
Once you are ready to commit to saving, the best way to save money is to never see it. Out of sight, out of mind. We set up our paychecks to direct deposit and would split them into two separate accounts. You can set up a percentage of each check or a fixed amount to go to a certain account. For example, I had my paychecks set up to direct deposit 50% for spending (food, gas, rent, etc.) to my main checking account and 50% for savings (travel) to a completely separate savings account (more on that below).
This strategy helps keep your savings out of sight so you aren’t tempted to move it around for additional spending purposes. It also doesn’t let you “forget” to move over your savings for a week or month.
Of course, you don’t need to start out with 50% right away, but maybe 15% or a set $200 every paycheck will get you on the right path.
Use a High Yield Savings Account
Once you are starting to save, hopefully by the direct deposit method above, you need to be sure to be putting your money in the right account. You want to have it in a separate account where you can’t easily transfer money back to your checking account. You also want to find high yield savings account so when your money is sitting there accumulating, you can earn interest on it.
Traditional savings accounts are at an all-time low with their interest rates. By finding a high yield savings account, you can find a slightly better interest rate and earn just a bit more on your savings.
For example, I had my main checking account in Capital One 360 and my savings in Synchrony Bank earning a 1.25% interest rate. Of course, those rates have since changed and likely will continue to change. But over a two-year period, I earned nearly $300 just in interest on the money I was already saving. This was far better than the Wells Fargo account I had previously that earns 0.01% interest.
Check out some of the leading high yield savings accounts:
- Synchrony Bank
- American Express
- Charles Schwab
Earn Credit Card Points
Our last tip is to ensure you are earning the best points for your purchases. If you are looking to save money for travel, then having points will help you reach your goals faster. You can use credit card points or miles for flights, hotel rooms, excursions, upgrades, and just about anything else.
The best way to get points is to use the signup bonus by usually spending $1,000 – $3,000 in the first 3 months and getting a large sum of points (say 60,000 points). We did this before we started traveling and were able to get our first one-way flight from Los Angeles to Bangkok, Thailand completely free. Those tickets normally run around $400 – $600 each, saving us nearly $1,000 on flights.
We only recommend this tip though if you are able to pay off all of your credit cards every month. You must be in good credit standing in order to apply for new cards and you can only earn the bonus points if you pay off the balance. Interest rates are extremely high on credit cards and can add up extremely quickly, which is the exact opposite of saving money for travel.