09/09/2012 10:09 am ET Updated Nov 09, 2012

Nomadic Matt's 16-Step Plan To Realizing Your Dreams

"Your job sounds like the most exciting job in the world," the cute blond girl -- let's call her Jessica -- said to me. Jessica had just overheard a conversation with some friends I hadn't seen in years and they were peppering me with questions about my job and lifestyle. People I meet usually do, and I've gotten used it.

"So, can you get me to Ireland cheap? I really want to go."

Normally when I'm asked about these things, I talk a little bit about my travel guides section, hand over my business card and tell the person to e-mail me. On my free time, I don't want to turn into someone's travel agent. But this was a good excuse to talk to a pretty face longer.

"My boyfriend (doh!) and I want to go to Ireland in the summer but we don't know how to afford it."

"Well, the first thing you should do is go home, and each of you should sign up for a travel-related credit card, get 50 thousand miles as a sign-up bonus and use them for a free flight. That's step one." I said.

"Wait! You get miles for signing up for a credit card? Really?" Jessica said.

"Yeah, I've used these bonuses to get over 400,000 miles just on American Airlines alone. I fly first class with free miles all the time," I said.

As our conversation continued for a bit longer, Jessica was amazed at all the traveling I've done. "You are either rich or get paid a lot of money," she said to me. "Nope," I told her. "You just need $50 dollars a day, which works out to $18,000 per year."

"Oh, that's too much money. I don't have that." she said.

So I broke it down for her and had her think about her own expenses and spending habits, and she soon realized that for more money per year, she does a lot less.

I gave the girl my card and wished her well. As she walked away, I told my friends, "That girl is never going to Ireland."

After years of talking to people about travel, I can tell when people are serious. My friend's friend who wrote down the name of companies and websites over a beer was serious. Jessica? She's not going to Ireland with her boyfriend anytime soon.


Because while she was intrigued by all the tips I was giving her, she wasn't ready to implement them, not even for a vacation.

She is trapped.

See, the travel industry is insidious. It shows you ads that create the idea that travel is a luxurious escape from the tedious nature of our lives. And to get to that fabulous place where fun awaits you, we have to pay for it. It's amazing marketing, even if it is a bit evil.

Magazines show high-price ads, resorts, and tours. Even budget magazine hotel "deals" are $100 dollars per night. I don't know about you, but that doesn't sound budget to me! The whole industry colludes to reinforce this image that travel is a luxury that can only be rarely afforded.

So what happens? Bombarded by all of these ads, we assume it is the norm. "This is what you have to spend when you go traveling," we think. Maybe one day, you'll find a good deal but you're still spending thousands for even a quick trip to Ireland.

And no matter how may tips or tricks I lay out there, they are too hard to believe. Jessica might be intrigued, she might be interested, but she won't commit. Because the weight of everything she has learned over the years is too great for me to break through. It seems just seems too fantastical to her. Like it can't be real -- and if it is, it's unattainable for the average person.

This happens for two reasons:

For starters, people like the path of least resistance. And my way requires more effort. You have to be your own travel agent. It's a lot more work; I spend a few hours booking flights, doing research and comparing deals. But you know what's easier? Going online and picking the first deal you see, packing and setting off on your trip. The path of least resistance is usually the most followed.

Secondly, there's no frame of reference. People have no experience with my way. I'm just a stranger on the bus. I'm just a guy at a bar and no matter how logical my argument is, Jessica will still be skeptical. Because she has no proof that this works. To Jessica, I could be selling a Ponzi scheme. But since everyone takes trips the easy way, she knows it, she understands it and she'll do it too.

If you are from Europe, Australia, Canada, New Zealand or some other country where people travel a lot, you've probably met people who have traveled around the world, thus you know this idea isn't just for the rich. It is for everyone.

I'm mostly fighting a losing battle most of the time.

My friend Joe has been dying to go to Amsterdam since I've known him. He loves to smoke weed and gamble and there's both weed and good poker in Amsterdam. Every summer when I go to Europe, I say "Joe, come with me." He says "I'm busy." Last year, he quit his job. Did he come with me? Nope. In fact, I had to physically be there while he applied for his passport to get him to do it. So while Joe overcame barrier #2, he needed to overcome barrier #1.

The old way of thinking is so ingrained into people's heads, no matter how much I and others like me can prove that travel is affordable.

Which is why I know Jessica so well. Because her story is like so many others I've encountered over the years. I've seen it happen so many times before that based on the conversations I've had, I can just tell. I know how committed people are to travel when I speak to them.

Nomadic Matt's 16 Step Plan to Realizing Your Dreams

As I reflected on my encounter with Jessica, I realized that if I was going to send someone to Ireland, I needed to make it easy. I needed to hold someone's hand through the process as much as I needed to inspire them to go.

I don't want to listen to people any longer as they tell me how amazing my job/life/way of being is. I don't want people to tell me they will do it tomorrow or there is some bill that needs to be paid. I often feel like I'm banging my head against a wall screaming "You can do this!" but no one listens. And I realized it's because I've never made it easy for the Jessicas and Joes of the world.

They need a plan.

So I have created this step-by-step process on how to turn your dream into reality.

Step 1 - Decide where you want to go
A lot of people talk about travel without naming where they want to visit. They talk vaguely about places. Picking a place is utterly important. It helps you plan better and makes your trip more concrete. It's a lot easier to say "I am going to Paris" than say "I'm going somewhere in Europe." You need a goal to work towards.

Step 2 - Plan how long you'll be away
How much does it cost to travel? I don't know -- how long are you going away for? You can't figure out how much you need to save if you haven't decided on how long you'll be there. Every place in the world is different.

These two are important first steps because you can't know how much you need for your trip if you don't know where you want to go and for how long. When I planned my original around-the-world trip, I made a list of all the places I wanted to visit and how long I wanted to be there. You don't need to know the exact dates you will be in each place, but you should have a rough idea.

Step 3 - Determine what kind of vacation you want
Budget travel, backpacking, luxury trip or a honeymoon? You're going to plan differently for each. You can travel the world on $50 dollars a day, but not every destination is equal and every type of travel requires a different budget.

Step 4 - Research costs
Research how much your destination costs at the style of travel you want so that you can create an estimate of how much money you need for your trip. You can begin with my travel guide section or simply go buy a guidebook. All you want to know here is a rough daily estimate. This way you know how much you need for your trip so you can determine the best way to save that amount.

Step 4 - Determine your expenses
Write down all your expenses. Now that you know where you want to go and how much you need, now you need to save. By writing down all your expenses you can determine where you are spending money and how you can cut back.

Step 5 - Start saving money Follow my list of 20 ways to cut your expenses to watch your bank balance grow. Put a number to how much you need. For example, if you need $2,000 dollars for your trip that is in eight months, that means you only need to save $8.33 per day. Doesn't that make that larger number more attainable? Couldn't you find a way to save $8 per day? Here are some featured tips:
  • Cut the coffee - That daily coffee costs you $150 per month ($5 per coffee). At $1,800 per year, that's two months in Southeast Asia. What's more important: your daily cup of Joe or getting to spend two more months on the beaches of Thailand or exploring the jungles of Borneo in Malaysia?
  • Learn to cook - We all need to eat, but restaurants are getting quite expensive these days. Even with this recession, coming back to the U.S., I've noticed that food prices are a lot higher than they used to be. I learned to cook while in college (a skill that has helped me ever since), and before I left, I cut down my eating out to two times per week. Every other meal was cooked. I cooked dinner and then used the leftovers to eat lunch, thus saving more money.
  • Lose the car - Cars cost a lot of money between insurance, repairs and filling your tank with gas. Learn to love the bus, take the subway or walk. It took me longer to get to work using public transportation but you'll find that you don't really need a car as much as you think. I understand that this tip may not be feasible for everyone, especially those in smaller towns that don't have a good public transportation system, but a good alternative is to sell your car and buy a cheaper used car.
  • Get rid of cable - In the age of Hulu and free (and legal) streaming TV, there's no reason for you to be spending $50 per month on cable television.
  • Sign up for travel newsletters - No one likes to clutter up their inbox, but by signing up for mailing lists from airlines and travel companies, you'll be able to get updates about all the last-minute or special deals that are happening. I would have missed out on a round trip ticket to Japan for $700 (normally $1,500) if it wasn't for the American Airlines mailing list.

Step 6 - Get a rewards credit card
While you're working to save money, get a travel credit card so you can use those sign-up bonuses that I told Jessica about to get free flights. I have accumulated over 600,000 free miles this way and despite all the cards I've acquired, my credit score is still 770. Yet you don't need a lot of cards; you just need one. Do this the moment you decide you want to travel. Don't wait: Waiting equals lost miles.

Step 7 - Get your passport.
If you don't already have your passport, apply for one right away. The process only takes a month but you can't book an overseas flight without your passport number.

Step 8 - Check for last minute deals
Before you hit purchase on your flight, check for deals you might have missed. You may dream of Paris but maybe there are great deals to Berlin right now. Maybe you can get a seven-day cruise for 70% off, a package deal to Hawaii for the price of your flight to Paris or 50% off sailing trips around Greece.

While it may not be your first choice, it can be a good way to save in the long run. I always look for deals. It's a big world, and there are lots of places I want to see.

My favorite sites for deals:

If you find something, adjust your travel plans accordingly. If not, continue on -- but it pays to look.

Step 9 - Book your flight
After you have used your travel credit card and received your sign up bonus, use your miles to book your flight. It is harder to use miles these days due to less availability, so you want to book early to make sure you get your available flight.

Step 10 - Book your accommodation
If you have a set schedule, there is no reason to wait If you are going on a long-term trip, book just the first few days. Once you know the dates you'll be in your destination, there is no real reason not to find a place to stay. My view is that waiting will just lead to you losing your top picks.

Love hotels? They won't save you money, but you can sign up for some hotel credit cards and get free rooms, too. Marriott has a great rewards card whose sign-up bonus is equal to one week's free stay. Starwood's AMEX card is wonderful too, but the spending threshold in order to get the points bonus is higher.

The following booking sites offer the best rates for accommodation:

Alternative: Contact people on hospitality websites like Couchsurfing and ask if they would be willing to host you. Moreover, you can also consider apartment rental sites like Airbnb or Wimdu.

Step 11 - Plan your activities
Sketch out the major activities you want to enjoy and how much they cost. Make any last-minute adjustments to your savings so you can ensure you have enough money. This will also help you figure out if you need any reservations for your chosen tours or activities.

Step 12 - Sell your stuff
If you are going on a long-term trip (six months or more), sell your stuff in order to earn extra money for your trip. Start doing this about 60 days before you leave. Sites like Gumtree, Amazon and Craigslist can help you do so.

If you aren't going away long-term, skip this step. If you are going away long-term but want to keep your stuff, move it to a friend's house or keep it in storage. A good storage company in the U.S. is Public Storage and starts at $50 per month.

Step 13 - Automate your bills
Get rid of your mail, go paperless and set up online bill payment for your recurring bills to ensure you won't miss any while overseas. If you are still going to get paper mail, use a service like Earth Class Mail. (If you are going on a two-week trip, you don't really need to do this and you can skip this step, too.)

Step 14 - Tell your credit card companies you'll be traveling
No matter how long you'll be gone, it is a good idea to let your card companies know you will be overseas so that any transactions that come up aren't flagged as fraud and your card is less likely to be blocked. There's nothing worse than having to sit on the phone with your credit card company instead of enjoying your vacation.

Step 15 - Pack
Pack for your trip.

Step 16 - Go have fun
Go on your trip and have fun! Head to the airport, board your plane (don't forget your passport) and enjoy the fruits of your labor.

Using these 16 steps, you can break your travel planning into small, actionable tasks. I'm a planner; I like lists. I like knowing what I have to do. Not everyone is like that; lots of people can simply keep a mental note. But no matter what type of person you are, for the vast majority of people that dream of travel, part of the reason it doesn't become a reality is because it also seems like this unmanageable task.

I think people know that there are plenty of ways to travel inexpensively but they also don't know how to manage it -- and when you tell them how to accomplish it, it all just seems too good to be true. So people fall back to the simple method of "let's just go to Expedia" and book a trip, which makes them spend more money -- and the cycle repeats itself.

But there is no need to be like that girl in the bar. Go to your Ireland. Once you understand just a few secrets about travel, a trip becomes simple and easy whether you are on a year-long trip around the world or a week-long trip to Paris.