How To Travel If You’re Poor: Saving Up
In the interests of disclosure and context, I will start this post by telling you that I have never made more than $28,000 a year, and that year was quite an exception. In most years, I make somewhere between $10k-$16k. Since January of 2011, I’ve been averaging around $1200 a month, after taxes. So, keep that in mind while you read this post.
As I mentioned before, money is one of the biggest barriers to travel. However, the problem is twofold: not only does travel cost money, but most people, frankly, suck at saving up the cash to do so. The latter is what I’ll be addressing here.
In the four months since I decided to go to France, I’ve saved up around $2000 for my trip. $200 of that money has gone toward buying things I need for the trip (swimsuit, pack towel, computer bag, etc), and another $800 has been set aside to pay my bills while I’m gone. I’ve done this while making about $1200 a month.
Here’s how I did it, and how I save up for things in my life in general:
Kelsey’s Extreme Budgeting Tactics
(because everyone wants more money, right?)
Figure out what your priorities are.
Whether it’s travel, a new car, or simply working less, figure out what you want most in life right now. Focus on that. It should be your overriding motivation for everything you do or don’t do in your life.
Pay your rent. Buy groceries (frugally). Gas up your car. Other than that, avoid buying anything. Mend or alter your clothes instead of buying new ones (fact: I only buy new clothes twice a year; new shoes only once every three!). As they said during the WWII, “Use it up, wear it out, make it do, or do without.” When it comes right down to it, there’s a shit ton of stuff that we want that we have convinced ourselves that we need. Take a good long look at what you really, absolutely need. Don’t buy anything else. If you see something you want in a store, don’t buy it on that trip. Go back and look at it a few times. If you like it enough to go back to the store multiple times, you’re probably going to actually use it. If you don’t, then you didn’t need it anyway.
You may be surprised to see how little you really need to buy. In 2009-2010, I went for six months without buying anything other than groceries, gas, or the most basic of household supplies.
Treat yourself in small ways.
I know this sounds counter to what I just said, but bear with me here. Just like diets, frugal living needs an occasional break. But, it shouldn’t be a big one. Go out to a moderately priced restaurant. Visit a museum. You can treat yourself, but do it sparingly and with cheap things. I treat myself by buying music from iTunes. I get a new song about 2-4 times a week, and the enjoyment I get out of that music far outweighs the $1/song it costs me.
Pay yourself first.
I have three bank accounts. One is my general checking account that my various incomes go into. It’s my “general purpose” account, so to speak. Another is my “bills” account. My monthly bills (rent, phone, credit card payment, etc) are the same every month, so this one is easy. I get paid twice a month, and $300 from each paycheck goes into the “bills” account. There’s rarely any money in there, since I keep it pretty exact, and the money goes out almost as soon as it goes in. However, this allows me to see how much money I have *after* bills before I’ve even paid them, as I’m basically pre-paying them. The third account is a SmartyPig account that is for travel or anything else I’m saving up for. Over the last four months, I’ve been putting $250 a paycheck into that account, and it’s now around $2000.
For both the “bills” account and the SmartyPig account, transfers occur one day after payday, like clockwork. I don’t look at my general account until after they have occurred, which means that by the time I see my general account, the money for my bills and the money for travel has already been squirreled away. If you see money in your account, you’re likely to spend it on random crap, even if you know that you have bills to pay or a larger goal to save up for. Avoid that problem by paying yourself first, into a separate account, so that the only money that you see is really the only money you have available.
You don’t have to go to the extreme of growing your own food like I do, but there are ways to lower your food costs. Buy foods in bulk, and buy fresh foods. Limit your meat intake, as meat is usually the most expensive part of a meal. Not only will these things make your meals cheaper, they’ll also make you healthier, as well. Also, if you have the time to find them, coupons can be a lifesaver. When I used to work as a grocery store cashier, I saw people save 80% of their bill on a regular basis by using coupons wisely.
If you have good public transportation, consider getting rid of your car, or going with a cheaper vehicle. Starting this fall, my only vehicle will be our sidecar motorcycle, Nadezda. If we didn’t have that bike, I’d buy a cheap, $1000 scooter that gets 150mpg. If you need to take a longer trip, you will be able to afford to rent a car because your wallet won’t be sucked dry every month by car payments, insurance, and expensive gas. Zipcar is also an option if you can use public transportation for most things but still need a car a few times a week for errands and whatnot.
The other big expense to consider is your housing. If you’re hoping to save money (or to work less and live on less), you might give some thought to where you live. Consider downsizing your living space. If you’re currently living in a 2 bedroom apartment, consider moving to a 1 bedroom. If you’re in a big house, consider moving to a smaller place. If you’re in a studio, consider renting a room in an apartment with roommates instead.
If you have a significant other, share your expenses. Right now, Marc and I split our mutual expenses 30/70 because, frankly, he makes five times what I do. Though I could live with my same income without him by getting roommates, it’s much more pleasant to live with Marc than some random girl from Craigslist.
As weird as it sounds, whenever I think I “need” something, I think to myself “Did most people live without this item/service 60 years ago?” If the answer is yes, then I probably don’t need it. Quality of life was pretty damn high in the 1950s, so if they got by without it then, I can probably get by without it now. It’s all about perspective. You don’t really need much more than food, a place to sleep, clothes, and a way to get around. In reality, those things are pretty easy to obtain.
Understand the relationship between time and money.
One of the basic concepts in economics is the relationship between man hours and money. When making a product, a company can choose to invest the labor (man hours) to hand build each item. They will save money, but the item will take more time to produce. The other option is for them to pay to have a machine built to make the items. This option will cost more money, but will save them man hours and time.
This concept can be applied to your life just as it occurs in economics. You can choose whether you want to invest your time or your money in something. For instance, I could save $12 a week by doing our laundry in the sink, but it would take so long for me to do it that it’s cheaper just to pay the laundry machine to do the work for me. The hours I would spend doing the laundry are more valuable to me than the $12 cost of the machine. However, I choose to save money by cooking, because the $20-$30 a meal that I save by spending my time cooking instead of paying for a restaurant chef to do it for me is worth it for me. Cooking a good meal only takes half an hour (at most), and the money I save is worth 30 minutes of my time to me. If I were a busy executive, that might not be the case, but that is a situation where I choose to invest my time instead of my money. Look at the things in your life that you spend money on, and see if it is worth it to you to spend the time to do them yourself instead of paying a person or machine to do them for you.
As you can see, much of the way I save money has to do with awareness of your spending and finding ways to control it. The way I save money is not easy, and the lifestyle it requires isn’t the most fun or luxurious. However, if you don’t make a lot of money but you have big aspirations, you might consider giving some of these techniques a try. If you do, let me know how it goes for you!