How did you Afford that!?!
The simple truths of planning & budgeting for a trip around the world.
When Gosia & I made the decision to travel the world, I constantly got the question from friends & former co-workers, “How much does that cost?” or “I wish I could afford that!”. The truth is traveling the world on a budget can be done by anyone, even families of 4. We were a single income family for 5 years, who made simple money saving decisions to allow us this once in a lifetime opportunity. I’m going to let you in on our 2 simple secretes so you can start planning your world journey:
OK, so maybe shaving your head isn’t an option, but hey 14 years of baldness does have its perks (Thanks Hack for that first shave)! At $20 bucks a pop per month, over 14 years, I figure thats almost $3k & easily paid for our family flights from Cleveland to Boston ($300), Boston to Hamburg ($900), Zurich to Bangkok ($1,100), and Asia to Australia ($600) with money left for pad thai!
So let me tell you a little about us and how living below your means was our life style choice and can be yours. Hello again, we’re The Herman’s, a single income, middle class family of four. We love a good laugh with friends over a BBQ, red wine, delicious food, staying active and being outdoors. We’re not millionaires or retirees. We didn’t receive an inheritance, sell a company or find a pot of gold (though we’re still searching). We love to set personal goals and challenge ourselves. When we decided to make this trip a reality, we set a goal of saving $500/week over 16 months. We made simple life decisions and prioritized experiences over tangible items. We maintained a minimalist lifestyle. We had the same student loan debt as you. We paid them off first. We never carried credit card debt and routinely played the credit card game to rack up points & miles. We chose to rent a small, 2 bedroom apartment in the center of the city versus buying the house in the burbs. We were a 1 vehicle family for the last 5 years, paying it off immediately thereby reducing our car, gas, insurance, and maintenance expenses. Instead of eating out every week, we turned our kitchen into an exotic restaurant and served dishes from all around the world at a fraction of the cost. We packed lunches. Our consumption behavior was about quality over quantity on everything - food, clothing, technology. We cut the cable cord. And finally, we enjoyed the free things that life offered us living in Florida; beaches, parks, public libraries, and free Publix cookies for the kids (I do miss taking the kids to Publix - where shopping is a pleasure).
Let's focus on living below your means, sounds simple, right? Take your income, subtract your living expenses, & set aside the rest for your trip. It’s all fine & dandy, until you realize there’s not much left after paying the bills. Here’s where you must reverse that line of thinking and pay yourself 1st. Treat your trip as your first expense, stash it away, then pay the bills.
Let’s look at 10 ways to reduce your expenses and get you on your savings track for your next adventure. . .
1. Take the Buck out of Starbucks - I know, you absolutely NEED that Cup of Joe in the morning, so do I. But making it at home is just as enjoyable, and it tastes 100* better at a fraction of the cost. You can purchase LaVazza (my favorite brand) at the store for $7. It’ll last a couple a good week. If the 2 of your are visiting ‘bucks daily (or 2* day like the fellas in the office), your daily purchase is somewhere around $10 (you’re grabbing that muffin too, so reduce the trip and get in shape!). NET WEEKLY SAVINGS: $43
2. Pack it Up, Pack It In - Chef Gosia turned our kitchen into a 5 star restaurant. Part of that experience led to leftovers, plenty of them. Fire up that dusty crock pot and save the lunch expense. I admit, it was tough to turn down a lot of lunches with the guys at work, but at $10-$12 a pop per day, you can really juice up your savings. NET WEEKLY SAVINGS: $50
3. Dine In for the Weekends - Continuing on the food trail, our evenings & weekends were spent dining in. A dinner at say, Cheesecake Factory can easily run a family of 4 a Benjamin. Next time invite friends over and do a pot luck. Weekend BBQs were always our favorite, grilling a good pork tenderloin or fish over a bottle of wine. You’ll still be in the money, saving, evening if you splurge on a good piece of fish or meat. NET WEEKLY SAVINGS: $50
4. Cut the Cord - What are you waiting for? There are so many ways to catch your favorite TV shows, sporting events, or movies. You can pretty much stream anything over high speed internet. Quite frankly, you should be asking yourself why you haven’t acted sooner. NET WEEKLY SAVINGS: $20
5. Upgrade, Downgrade, just Keep it! - I know we have to be connected in today’s technology wired world, but can you really tell a difference between the iPhone 5, 6, or 6s? Resist the urge to upgrade at every new Apple release, and instead take care of the phone you have. Now that cell carries have moved away from including the cost of the phone in their packages, new phones run $700. My good ole’ iPhone 4s still takes the same calls, sends the same text messages, surfs the same web and answers the same emails as everyone else. Yes, it had a crappy camera, but thats why we have camera. NET WEEKLY SAVINGS BY HANGING ON TO YOUR EXISTING PHONE: $15
6. Drive In, Drive Out, with the same Vehicle - This is a biggie. Another huge expense is your monthly car payment. Resisting the urge to buy a new vehicle every 3-4 years can be a significant boost to your savings plan. Buy a reliable vehicle, take good care of it, and keep it for as long as possible. In our case, it was a 2009 Toyota Tacoma. We paid if off in 3 years and never had a car expense over the last 5 years. Big chunk of dough to put towards the trip! NET WEEKLY SAVINGS: $125
7. Go with the FLO - Are there more annoying commercials than the car insurance companies??? FLO has to be the worst but Geico is not far behind. But that doesn’t mean you shouldn’t shop your car insurance to 3-4 different companies. Florida has the highest auto rates in the USA so depending on where you live, this savings can vary. NET WEEKLY SAVINGS: $10
8. Pedicures, Manicures, Hair-Dos & Dry Cleaning - This one is geared to the avid female followers of our blog. Gosia recently read an article online that females can spend upwards of $14,000 annually on their “looks”. That type of cash can get you a rendezvous around Europe for 2.5 months. Ladies, even if you cut back on pedis, manis, and your hair-dos to say once a month or every other month, you’ll add hefty amount to the pot of travel gold. NET WEEKLY SAVINGS: $100
9. Location, Location, Location- This one may not be feasible as you can’t get up and move tomorrow but the proximity to work, grocery store, kids school, etc can offer a tremendous savings to your trip. How much are you driving per week? Can you walk or take a bike to some places? Its nice to know gas prices were sub-$2 for a while and this may not have eaten into a huge portion of your income. We lived & worked downtown thereby having almost a negligible amount on fuel expense per week. NET WEEKLY SAVINGS $50
10. Minimalize that House - In the world of Amazon, its pretty easy to get carried away on a buying spree to decorate your home. Revert to Pinterest for ideas on how to decorate your home. One of our favorite was bringing branches home from the parks to hang our pictures on. Gave our apartment a bit of a rustic feel to it. Yes, we’d make the occasional trip to Home Goods but keeping your home expense down can be the icing on the cake to achieving your savings goal. NET WEEKLY SAVINGS: $40
There you have it. 10 ideas, $503 in savings per week. These are the ideas that aided us to save a significant portion of our travel budget. While some may be feasible for you and others may not, what’s important is you set financial goals and work towards achieving them.