Lets start with a small exercise!
Take a notebook and write down all your “Fixed Expenses” like house rent/home loan EMI, car EMI, utility (electricity, water, cooking gas) bills, mobile bill, internet, insurance premium, apartment maintenance, children’s education fees, daily travel expenses etc. Now sum them up.
Now write down all your “Variable Expenses”. These are expenses which are not regular but variable and unavoidable. Vehicle maintenance depends on your driving, a lass party at your child’s school, buying new clothes or shoes due to wear and tear, household repair and maintenance like plumbing electrical gadget breakdown etc. Now get the total.
Then write down all your “Discretionary Expenses”. These are mostly unnecessary expenses which you incur out of no compulsion but own discretion. This is what you spend on food, movie nights, drinks, shopping, that daily coffee from Starbucks, cigarettes, sports tickets, your daily midday snack, and other similar things. If you don’t know what you spend money on, go track your expenses for a two-week period, see what you spend, and come back.
Add that all up — what did you get? Probably a large sum of money. And I bet there will be many expenses you didn’t realize were there. Financial experts call these “phantom expenses” — we never know they are there because the expenses are so small. People bleed money without realizing it. Rs. 50 here and a 100 bucks there adds up. Even a daily bottle of water or candy bar can make a substantial difference over the course of a year.
What does this have to do with travel? One of the main reasons why you think you can’t travel the world is money. “I can’t afford it,” people say to me, “I have too many expenses.” Most of us certainly have expenses we can’t cut (though remember when you travel the world, all those expenses disappear), but if we cut our phantom expenses, reduce our set costs, and find other ways to save we can build our travel fund much more quickly.
No matter how cheap we want to be, travel requires some money. There’s no way to avoid that, so in order to save for our trips, we need to cut our expenses. Here are some simple and creative ways to cut your expenses, make money, and get on the road sooner.
1. 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 for your big trip (people have traveled around the world on nothing!).
- Creating a plan – This savings plan details how you’ll accomplish your goals. This could done by 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.
2. Commit to your dream
The first of our tips for saving money (for travel) 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 to mark your dream around the world trip route, for constant re-validation. 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!).
3. 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 the things you regularly purchase.
4. 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 just $5. Make it fun. Make it a habit. Make it natural. Make it painless. Revel in its growth!
5. Pack your lunch from home
An average lunch meal would cost you somewhere between Rs. 80 to Rs. 150. If you pack your lunch from home you straightaway save those bucks as you have already bought grocery at home within your household expenses Those savings will add up. Say you go out to eat five times a week. Just trimming your lunch cost from Rs. 150 to Rs. 80 saves you Rs. 25,550 a year! For even more savings, pack a lunch if you’re able.
6. Carry a water bottle
Plastic water bottles are not only harmful to the environment, they are also harmful to your wallet. One or two water bottles a day at Rs. 15 per bottle will add up to at least Rs. 900 a month. That’s Rs. 10,950 a year! You can fly to Nepal and back with that much money! Instead of disposable, buy a refillable water bottle and fill it with drinking water dispensers.
7. Cut back on tea/coffee
Eliminating tea/coffee from your life just might be impossible, and coffee shops 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! Although in India people mostly make tea/coffee at home even then reducing the frequency saves a lot. Love your weekly visit to CCD or Starbucks. Well, they love your money.
8. Learn to cook
We all need to eat, but restaurants are getting quite expensive these days. I have increasing sticker shock every time we go out to eat. You want how much for pasta?! To keep your food bill low, cook more often. I learned to cook while in middle school (a skill that has helped me ever since). I cut down my eating out to once a week or fortnight. Every other meal I cooked myself. I would save the leftovers from dinner for lunch the next day, thus saving more money.
You don’t need to be a whiz in the kitchen, either. There are a million and one cooking sites that will teach you how to cook fast and healthy meals — perfect for people without much time. The Food Network and Recipes.com have a near limitless repository of delicious recipes to start you off. Simple unprocessed foods like rice, lentils, beans, chicken, eggs, noodles, pasta, potatoes, and vegetables are healthy and cheap.
9. Reduce or eliminate your car usage
Cars are crazy expensive to own, between insurance, repairs, loan payments, and filling your tank with fuel (current average price of petrol in New Delhi is Rs. 74). Get rid of your car if you can. Learn to love the bus, take the metro, bike, or walk. It took longer to get to work using public transportation, but I found that I didn’t really need a car as much as I thought. I understand that this tip may not be feasible for everyone, especially those in smaller towns that don’t have an extensive public transportation system, but an alternative is to sell your car and buy a cheaper, low maintenance one, which you will only need until you leave for your trip. Buying a throwaway car will allow you to pocket the money from your more expensive car and put it toward your travels.
10. Get rid of cable
You’ll be surprised how fast your savings add up when you ditch cable TV. Several friends of mine pay up to Rs. 800 a month for their DTH. That’s insane, it adds up to Rs. 9,600 a year. Even a more reasonable rate of Rs. 375 (the average monthly cost of cable TV in India, as of 2019) still ends up being Rs. 4,500. That could fund a 2-3 night stay at lots of places in the world! Besides, there are plenty of free and cheap ways to get your entertainment. Amazon Prime is Rs. 99 a month or Rs. 999 a year. There are many other free (and legal) streaming TV. Even your mobile network provider provides their own app like Airtel Xtream, Vodafone Play, Idea Movies & TV, Jio TV etc. Get rid of it and just watch everything online for free. Books are cheaper than movies.
11. Ditch your landline
I honestly only know about 3 people these days who have anything other than a mobile phone. You don’t need both a mobile phone and a landline. Ditch your phone line and avoid doubling your phone expenses.
12. Reduce your utility bills
Put a sweatshirt on and keep the heat on low. Open the windows to catch a breeze instead of using the air conditioner. Turn off the lights & fans when you leave a room. Shorten your showers. Some areas of the country have more moderate temperatures than others, but even a few bucks a month pile up in your travel savings account. The average utility bill in India ranges from Rs. 1500 to Rs. 15,000 a month. If you can trim 15% off by being more efficient, doing fewer loads of laundry, and conserving energy, you could add around Rs. 2,500 to Rs. 25,000 to your savings, annually.
13. 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 Rs. 210 bottle of beer would’ve cost Rs. 375 at the bar!
14. Quit smoking
This one’s a no-brainer. Smoking kills not only you, but also your wallet. A Rs. 50 to Rs. 150 pack per day amounts to Rs. 18,000 to Rs. 55,000 per year. That amount would yield enough money for New Delhi – Bangkok or New Delhi – Venice return fair. If you don’t want to stop smoking for your health, do it for your trip.! Can’t do it on your own? Get someone you know to help you keep accountable.
15. Stop drinking
Alcohol is expensive. Cutting down the amount you drink is going to have a big impact on your budget. While this might not apply to everyone, those of you who are carefree might go out with your friends on the weekend. Drink before you go out to the bar or simply don’t drink at all. Cutting down the amount of alcohol you consume is considered low-hanging fruit — an easy way to save money.
16. Stop snacking
A snack here and there not only adds calories to your waistline but also empties your wallet — another example of phantom expenses. We don’t think much of them because they cost so little, but they add up over time and eat into our savings. Eat fuller meals during breakfast, lunch and dinner and avoid the snacks.
17. 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 things in the park. The world is a cardio machine. Watch the calories burned outside turn into greenbacks in your bank account!
18. Skip the spa
Luxury feels so good, but spas are a serious expense. Massages, peels, and mani-pedis will cost you your hard-earned cash, and they certainly won’t help you get on the road any sooner. Skip out on the short-term luxury of self-pampering and save more for the life-changing luxury of long-term travel.
19. Get fewer haircuts
If you get a haircut or cut and colored once every two months as opposed to once every month, you’ll save 50% and probably still look just fine. Considering the cost of hair care, over the course of a year this could really add up. Of course, stick to a simple style that a friend can trim for you for free, and you’ve got 100% savings. Cover your greys at home if you do not like them. Although I love my greys and feel good to flaunt them. It gives me a feeling of maturity and sensibility.
20. Buy second-hand
Why pay full price when you can pay half? Use websites like Amazon (discounted books and electronics), wholesale websites, and clearance sales to buy at discount.
21. Skip the movies
I don’t know about you, but I find movies ridiculously expensive. It can cost up to Rs. 700 for a ticket, and that much again for the popcorn and soda. Cut out the movies or rent them online via Netflix or iTunes . Whatever you do, cutting out trips to the movies will save you a bundle.
22. 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, and even Oxford!
- Get non-university educated at Khan Academy or Unacademy.
- Check out the online repository of videos of academic courses at Ivy League schools like Yale, Harvard and Stanford at Academic Earth. The only thing it doesn’t have is Skull & Bones.
- Learn to code – hello Codecademy!
- Volunteer for a local charity.
- Play sports: you know, cycling, tennis, basketball, soccer, etc. Find recreational teams in your area.
23. Earn extra money on the side
The sharing economy has made it really easy to earn extra money on the side. You can rent your spare room out on Airbnb, drive with Wunder Carpool, cook dinner on EatWith, or lead personalized tours through Couchsurfing. No matter what skill or unused asset you have, there is a moneymaking service for you. Use these websites to boost your trip savings and travel cheaper.
24. Bonus tip for saving money: keep your distance from financially irresponsible people!
Watching your friends go out every night to buy expensive electronics, pricey cocktails, and new boots will destroy all your hard-won motivation. So just don’t.
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.
Cutting your daily expenses, being more frugal, and downgrading to a simpler way of living will allow you to save money for your trip around the world without having to find extra sources of income. I know these tips work because I have used them (and still use them to keep my living expenses low). These tips alone will help save you lakhs of rupees that will suddenly make your dream trip seem less like a dream and more like a reality.
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