When I was transitioning out of the corporate world in 2008 to travel the world, several people I spoke with similarly expressed how they would love to quit their jobs to travel. However, the number one excuse people had for not quitting their job to travel was the lack of money. If you are transitioning out of the corporate world, read more here.
The illusion of not having enough money is the most common excuse I hear from people who have a dream they want to realise or a goal they want to achieve. Whether it's quitting our job to travel the world or starting our own business, most of us get stuck on this illusion of money. How do we overcome this?
Recently, I wrote an article for Bootsnall-an indie travel website that promotes longterm travel-explaining "How I Overcame the Obstacles to Travel the World." However, the original title was "How I saved up $70K in 18 Months to Travel the World." The title was changed because people pointed out that, although the article was inspiring, I didn't address the main objective of the article: How I saved up money.
Therefore, below I outlined the seven steps I took that helped me save up $70K in 18 months so that I could travel the world which can also be applied in your life.
Step 1. Calculate how much we need to travel.
With a little research about the places we want to visit, we can estimate how much we need to travel based on our travel preferences. I wanted to travel longer rather than luxuriously so I opted for the cheap to moderate travel budget. Next, I determined that I needed about $1,200 per month (meaning $14,400 for one year), plus airfare (approximately $5000), plus visas, equipment, shots and so forth (about $1,000). Overall, I needed about $20K (I rounded down) to travel for one year plus an additional $35K to pay off my outstanding debt.
Step 2. Establish a time frame.
When do we want to accomplish our goal by? What is our time frame? I established a departure date for my trip first which pushed me to take immediate action. This gave me a time frame of 18 months to save up $20K to travel and pay off the $35K in debt. Meaning I needed a total of $55K to reach my goal.
Step 3. Create a savings plan.
Next we need to create a savings plan within the allotted time frame that allows us to reach our goal. For me I opted for a monthly savings plan. I came up with a monthly savings plan for the $20K which rounded down to $1000 ($20K / 18 months = $1,111/month). This determined how much money I needed to save for the trip. Because I worked in sales, I guessed that if I worked hard (refer to Step 6) I would be able to pay the $35K in debt with any bonus money I received. If the bonuses weren't an option I would have taken the total $55K I needed and divided it by the 18 months ($55K /18 months = $3,055/month) and sought out different ways to save/earn/find an extra $3,055 each month.
Step 4. Where does our money go?
Before we save money, we need to know what we spend our money on. Therefore I tracked every single dollar I spent for a few weeks to see where all my money was going in order to see where I could cut back. Things like Starbucks ($80), dining out ($300), Jamba Juice ($50), going out to bars ($300), weekend getaways add up.
Step 5. The big question, how do we save money?
I'm not a savings expert, however, after we find out what we're spending money on we can start to eliminate those extra expenses. I set up a separate savings account and each month I transferred $1,000 to this account. In the beginning I had to continuously borrow money back from the account and it took months before I was able to eliminate enough miscellaneous expenses to reach the monthly goal. Note: If we want to save $1,000 a month, it may be easier to break it down into days. That ends up being only $33 dollars a day for 30 days. What could we do to make $33 a day?
Step 6. What would we do to reach your goal?
When we have a big goal, we have to ask ourselves, what are we willing to do to achieve it? Eighteen months is a long time to wait. It wasn't easy and I almost quit nine months early. Keep the big goal in mind and put in the time and dedication. In order to focus on the bigger goal, I transferred out of California to Chicago to help keep myself motivated. The sales territory I took was in the bottom 10 percent of the company, meaning making no money and no bonuses. In nine months I was able to bring it into the top 10 percent nationwide and thus make a bonus. How? I woke up at 5 a.m., worked until 5 p.m., had business dinners most evenings until 11 p.m. and got home around midnight. Not the easiest way to make a living but I had a bigger goal in mind.
Step 7. Travel and enjoy.
Self explanatory. Additionally, here are 7 Reasons Why Everyone Should Travel Solo at Least Once.