“Put everything you’re taking on the bed. Now put back half the clothes, and take twice the money.” – anonymous
Saving for travel is relatively simple
You set a financial goal to provide for the trip, up to and including safety/emergency funds as buffer for those “just in case” moments – Divide it by however months / weeks or even days from today to when the trip starts and you set that amount aside and stick to that schedule.
Total Amount / Month, Week or Day = Scheduled Money To Set Aside
Europe Trip 2011 – $2,500 / 10 Months = $250 a month to set aside. Easy right?
Saving while traveling is a bit more complicated. Even the most carefully-planned vacation is plagued with unexpected expenses. Ramit Sethi suggests budgeting 20% more than you think a trip will cost to pay for sundry expenses along the way.
20% to set aside is a good bit of money!
- Taxes and fees. The obvious. This involves a bit of “Googling” for that specific destination to see if you’ve got anything to worry about. Don’t forget Tourist VISA Application Fees!
- Unexpected needs. Baby Tylenol. Adapters to plug in our electronic gadgets. Groceries from the corner market. Try to get these outside the airport, we all know how expensive things get in there.
- Impulse spending. Part of the joy of travel is seeing new things and having new experiences. Some of those may cost more than you’d expected.Better to budget in advance for museum tickets, scenic tours, and souvenir shopping than to find yourself pinching pennies halfway through your trip because you splurged at the beginning.
- Emergencies. Having a comfortable cushion of while traveling lets you handle real emergencies as they crop up, better to be safe than sorry!
Here are some easy ways to save while traveling:
- Be prepared. Try to be self-sustained before departing. The challenge lies in overpacking that one thing that’s just as cheap in your destination and disposed there instead of carrying it all the way.
- Travel with frugal companions. Just like your friends influence your spending at home, they can pressure you to spend or save on the road. I have a close friend I’ve traveled with several times during the past year. She’s more frugal than I am, and she’s great at checking my impulse to spend excessively just because I’m on the road. I’ve also got friends who are quite the opposite, while they surely encourage me to let go a bit and have fun, I’ve definitely came close to feeling a bit of regret on the way home.
- Know your weaknesses. I splurge when I’m stressed and when I’m celebrating. Travel tends to push both those buttons. I worry about making it on time through the airport, so I throw caution to the winds and pay for overpriced food rather than packing a picnic ahead of time. I want to treasure the memories of where I am, so I spend money on knick-knacks or clothes that I don’t really need.
- Make a game of it. See how low you can keep your daily travel budget. Can you get through a whole day in a foreign country without spending a dime? Can you clip coupons in a language you barely speak? Take advantage of local specials at the neighborhood diner instead of eating in your hotel? Score points with your spouse by finding ways to save on your vacation.
- Have a savings goal in mind. What are you going to do with the money you don’t spend on this trip? Having a prize in mind helps keep me focused on saving. Of course for some people part of the joy of travel is being able to let go the reins of frugality and spend freely. If you’ve saved diligently and have that 20% cushion Ramit Sethi suggests, there’s no reason not to.
But if you enjoy frugality, there’s also no reason to leave your frugal habits at home. Careful spending while traveling only reinforces wise fiscal habits at home, and if you come home with part of your travel fund untouched, you’re that much closer to the being ready to book your next trip.