Travel Savings and Budgeting

save for travel

Does saving enough money to travel seem like an impossible task?  Or have you worked hard to create a comfortable nest egg, but have concerns about using your savings to travel?  Don’t worry.  With a few adjustments, nearly anyone can create a travel savings fund and use it wisely to travel on a regular basis.

Reduce Travel Expenses by Living Like a Local

If you’re looking for a ten-second read on how to afford travel, here it is:  Hands-down, the easiest way to avoid wasting your travel savings is to live like a local.  If you do tourist things all day and live a lifestyle that you usually cannot afford, travel will be overly expensive.  Three helpful tips to live like a local are:

  • Don’t go out for every meal.  Of course, enjoying a good local meal is always part of travel.  But by renting a place with at least a partial kitchen, you can eat in when you need a break and prepare food to-go when you’re ready to explore.  Sandwiches or burritos are the easy to-go solution that won’t bite into your travel budget nor time at your destination.  Check out expensive restaurants at lunch, rather than dinner, and your wallet will thank you.
  • Avoid tourist areas whenever possible.  They’re the most overpriced areas of most cities.  Take in that major tourist attraction, go on the tour, and get the experience/memories/photos.  Afterward, instead of eating at the shop next door with the line down the street, walk a few blocks and discover a new neighborhood.  If you can’t find anything good nearby, don’t be shy about asking your tour guide or a friendly face where the locals eat.
  • BYOB. Buy your own booze.  It’s tempting to hang out at the hotel bar with the picture-perfect view, and order drink after drink all afternoon.  Going to the store and bringing your alcohol may sound overly cheap, but it can also make a very large impact on your expenses.  Be responsible/discrete about it and you’ll save big without sacrificing much.

Get a Good Travel Credit Card

Giving out travel financial advice without mentioning credit cards would be silly.  Good travel credit cards can provide:

  • Points to use for travel rewards
  • No foreign transactions fees
  • Rental car damage insurance coverage
  • Other travel perks (club passes, lost bag reimbursement, concierge service, etc.)

Chase Sapphire is well-respected as one of the best travel cards around.  With a hefty sign-up bonus, excellent points system, and outstanding customer service, you’re hard-pressed to find a better card.  The Preferred version has a lower annual fee, but fewer perks. If you’re in airports often, the Reserve is well worth it. You get an annual stipend to spend on travel expenses like baggage or food/drinks, as well as access to a lot of different airport lounges/clubs all over the world.

And it goes without saying, but I’m going to say it anyway, do not carry a balance on any credit card.  The interest rates on most cards are higher than nearly any other form of credit around. In almost all instances, you should work toward paying off credit card debt before any other debt.  If you have a serious balance, look into consolidating through a balance-transfer card (many give 12 months 0% interest on the balance transfer) or even a personal loan.

Image by Bruno Glätsch via

Build Your Travel Savings

Creating a travel savings fund is possible for most people.  It comes down to understanding your discretionary income and increasing your awareness of how you spend it.

1) Understand Discretionary Income

First, identify your monthly income.  Write down this number.  Now take a moment and reflect on what you have to do each month in order to obtain this income.  How many hours of your life? How many rude remarks from customers or supervisors?  How many headaches?  Your income is what you receive in exchange for these experiences.

Don’t waste what you’ve already earned.  Scrutinize your expenses, starting off with the recurring, fixed bills, such as mortgage/rent, debt payments, insurance costs, and anything else you absolutely positively cannot live without.  Take your monthly income and subtract your monthly fixed bills.  This is your discretionary income.  This is what allows you to buy cool toys, go out on the town with friends, or travel the world.  If it’s not enough, check those fixed bills for areas where you could save.  The choice of what to do with this money is yours.

2) Track Your Spending

If you have discretionary income, but still can’t save money, it’s time to take a closer look at how you spend your discretionary income.  Use a spreadsheet, find a free budgeting template, grab a pen and pad, or even just open up a note on your phone.

Write down each expense as they occur.  Identify five or so major spending categories based on your own habits, and mark each expense under one of those categories.

At the end of each month, add up the expenses in each category.  Write down the total for each category.  This breakdown will show you what your priorities are, according to how you spend your discretionary income.  Take a step back and think about it in terms of hours worked, rude comments heard, and number of headaches you’ve had.  Are you spending too much on something that doesn’t fill you with joy?  Are you spending too little on the things that do?

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3) Set Savings Goals

After analyzing the way you spend your discretionary income, you will be able to set specific savings goals.  Of course, setting aside an emergency fund is a good idea.  Some people also save for down payments on their next home or car.  But if you’re here, we’re talking about travel savings.

Start off with a rough estimate of the cost of a trip you want to save for (more on that below).  Then break it down into a monthly amount, and figure out how much of your monthly discretionary income you want to save per month.

Still can’t come up with the total travel savings you want?  Go back to the expenses. Identify areas where cheaper alternatives exist.  It may mean sacrificing. Avoiding expensive restaurants and bars.  When is the last time you shopped around for car insurance? Are those gym membership, Netflix/Spotify subscriptions, and other “small” expenses really worthwhile?  Are you spending money and time in a way that allows you to achieve your dreams? If not, make the change. Believe in yourself.  Be aware of what you’re doing. Set big goals and conquer them. Tons of people that aren’t incredibly rich travel the world. You can be one.

4) Chart Your Progress

One very powerful way to make sure you stay on track is to create a chart that shows how much your savings is paying off.  Your first month will, hopefully, get you above zero.  Pull out a piece of paper, use a poster board, write in on the side of a cardboard box, or use a spreadsheet.  Whichever method you use, draw the axis with line at the bottom labelled “Time” and another line on the left side labeled “Savings.”

At the end of each month, plot the date and amount saved. The next month, go back to the chart and plot your month 2 date and new total savings figure, adding the month 2 savings to the level from month 1.  Repeat and watch the line slowly creep upward.

Use the chart as motivation.  Creating a poster-board size chart by the entrance of your home will keep this at the forefront of your mind.  Or just go with the chart at your desk or on your phone. Maybe you just watch the balance of your savings account grow.  Whatever the case, keep track of your savings and actively engage in the process.

Image by Mudassar Iqbal via

Travel Savings and Budgeting Summary

If you want to save money while you travel, live like a local and avoid the tourist traps.  Use a good credit card for travel awards and perks, but don’t carry a balance on it.  To build a travel savings fund, gain an understanding of your discretionary income and carefully track your expenses.  Then set financial goals and watch the travel savings grow.

Save your money, use it wisely, and go Off Path!

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