HOW WE SAVED $40,000 TO TRAVEL THE WORLD

The idea of long-term travel has been in our minds for several years, but we didn’t start laying out a plan to fund it until two years ago. After researching other travel bloggers’ budgets and crunching numbers, we found that a $40,000 total budget would fit what we wanted to do for one year of traveling around the world.

How did we come up with the money?

We saved…like crazy. We knew we wanted to leave no later than 2014, so if we could save at least $2,000/month that would give us $40,000 in just 20 months. This was a savings plan that we could afford while still living comfortably. Here are a few of the ways that helped us save money and maintain our budget:

1. Make a Goal

There’s no better motivation than having a goal. Saving is a lot harder when you have no purpose to do so. Focusing on short-term goals also helps reach that long-term goal. Thinking we had to save $40,000 all at once made it seem unachievable. So we separated it out into smaller amounts such as saving for the first $10,000 and celebrated when we hit that goal. We then continued onto the next step, saving the next $10,000.

2. Pay Off Debt

Thanks to scholarships and the GI Bill, (for Mark), neither of us had student debt after college, just two car loans and some credit card debt. When we decided to seriously save for this trip we looked to eliminate our debt first. We had some personal savings at this time, some of which we used to eliminate the last of our debt. This allowed us to have more money each month to save or live off, instead of it going to bills and interest payments. After paying off debt in 2012, we had less than $4,000 in savings. From here, we implemented the $40,000 plan- saving $2,000 a month for the next two years. There were times when we had expenses like car repairs or mini vacations that would put us behind, while other times we had extra freelance work that would put us ahead. We made sure to net out in the end.

Outdoor activities were cheap ways for us to be entertained without breaking the bank. This is at Sul Doc Falls in Olympic National Forest. Photo by Mark Johnston

3. Save Individually in Separate Accounts

When we first started saving we lived off one person’s salary while the other’s went directly to the savings account. The salary we lived off was divided into paying for rent, bills, groceries, Netflix and gym membership. Anything left was divided evenly for extra spending money that we happily spent away. After the first year of saving like this we decided to stop combining incomes and instead saved separately. We each came up with individual savings goals each month, making us accountable for our own money that helped us spend less and save more.

 4. Take on Extra Work to Earn More

It’s hard to save a lot if you’re not making a lot. If you’re in a job that doesn’t help you reach your goals, you can either supplement with freelance work or find a new job. Don’t be complacent at your workplace if its not helping you get to where you want to be. Change something. Mark and I have regular full-time jobs. We don’t earn anything near six figures even with combined incomes. However, our salaries were just enough to help us reach our travel goals. We also both took on freelance projects to help supplement our income and savings.

Dreaming of going back to a place like Halong Bay kept us motivated with our savings. Photo by Mark Johnston

5. Save with Cash for Specific Purchases

On this trip Mark wanted to take a nice camera and lens. He hasn’t owned camera gear for the past few years since his work provided it for him, but since he is quitting his job he now needed to buy some of his own. He made a camera savings fund separate from our trip savings. Whenever he received extra money from doing freelance, selling old items or winning a work exercise competition, he would cash the check and put it away in a safe. Eventually, he was able to purchase his well-earned camera and lens for the trip.

6. Move in with the Parents

Since we were in a year-long contract in our apartment, we were facing a hefty penalty fee, (two months rent), for breaking our rental contract to leave on our trip. Two months before our departure we moved in with Mark’s parents to help us make up for the money we’d lose to the penalty fee. The move also made it convenient to spend more time with family before leaving. It also got the hassle of moving and putting things into storage out of the way early so we could just pack our bags and travel when ready.

Saving money brings great travels. Photo by Mark Johnston

7. Don’t Forget to Maintain Other Long-Term Savings

Although we were very focused on saving money for travel, Mark was adament that we continue growing our regular long-term savings in retirement and health savings accounts, (HSA). On top of our trip savings we made an effort to contribute to our retirement and HSA accounts each month. I wasn’t as concerned about these savings, thinking it was impossible to save for both the big trip and for retirement and health. It turned out to be an eye opener for me, seeing it was possible to stretch our money to contribute to these accounts. This was made more convenient by the fact that the money was automatically deducted from our paychecks.

8. Eat Tuna Fish Sandwiches and Don’t Order Drinks

Obviously sacrifices had to be made to save that much money each month on our paychecks. Mark could no longer shop at REI as often and many of his favorite meals were replaced with tuna fish sandwiches. Britnee packed more lunches to work than before, never went to the hair or nail salon, and suffered through two years without the vacations overseas she longed for. We also didn’t order drinks when we ate out, which saves a lot in the long run. Bad habits of overspending on credit cards had to be stopped, old cell phones weren’t upgraded to the newest iPhones, Christmas and birthday gifts were scaled back, but with our ultimate goal in mind we never felt strapped.

9. Treat Yourself

Saving is hard work. We couldn’t help but go on mini vacations to treat ourselves every now and then. During the two years of saving we were able to make several camping trips to Southern Utah, celebrate New Years in Las Vegas with a Killers concert, visit family in California and do a road trip through the Pacific Northwest. We had to dip into our savings for these trips but our extra freelance work helped balance out the travel costs. It was important to have celebratory rewards to help break up the long-term goal into manageable milestones.