Hot! How To Travel If You’re Poor: Saving Up

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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.

Don’t buy anything that isn’t necessary to 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.

Live frugally.

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.

Learn the difference between “want” and “need”.

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!

[Photo credit: Header, 1, 2]

27 Comments

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  1. This blog post is SUCH an inspiration to me and I think I’m going to whip it out ANY and EVERYTIME someone tells me that (he,she,they) WOULD travel if it weren’t so expensive! Travel is expensive but not impossible. Thank you for writing this! You have just illustrated my entire argument. Best wishes on your future journeys!

  2. Great post. I think the biggest barrier to travel is mental. If people would just sit down and commit to doing something and then find a way to make it happen they could do just about anything. It’s just easier to make excuses than it is to sit down and be practical. At least until you do it for the first time.

    • Yes. I saved up $600 when I was 12 years old so that I could start reenacting. That’s an unfathomable amount of money for a kid that age. However, I was determined to make it happen, and I did. I think that as you said, a lot of people find it easier to make excuses than to put in the effort to accomplish something. I find that highly depressing.

  3. One of my problems (among many lol) is being married. Neither of us are big spenders but neither are we big earners. My costs are doubled, and while I keep tabs on the spending plan it’s hard to say no to the husband. We’re just now getting enough to have our own fun money after a rough few years, so we’ll see if I can cull out savings after we pay off the small debts we have. I want to travel, and I can see it on the horizon.

    Very inspirational, I’m going to StumbleUpon it.

    • How did your costs double when you got married? They should have halved, or at least reduced, since you’re now able to share the costs of things.

      “We’re just now getting enough to have our own fun money after a rough few years” – I think this may be the problem. Don’t look at any of your money as “fun money”. If you notice in this post, one of my biggest rules is to never really buy anything except the bare necessities. If you view everything over your bills as “fun”, you will never save. Try keeping track of your expenses for a month to see where the money goes.

      Glad you found it inspirational!

      • Been married for 27 years (yay!) so that means that while I do things on my own quite a bit (travel, get a lunch here and there), if I eat out with him (yes, I heard the advice) it’s twice the cost (or more, since I eat less). If we travel, it’s twice the expense. Groceries are more, but not twice. It’s a package deal for us; bottom line is, I can control my behaviors but not the behavior of my spouse, unless I want strife or counseling or a divorce.

        It’s not that bad in reality, it’s just my reality.

        I do track my expenses, so I know what I spend on. I have no mortgage but I need a reliable snow-ready car for our winters. Husband isn’t able to work full-time. I live in a rural town with limited wage-increase opportunities (but plenty of jobs, the economy is great here). After being sick for the last two years, I’m finally in a position to take advantage of a higher wage job with benefits.

        You are young, no kids (mine is grown and out), no health issues, and no debt — a great place to be in! I’m recommending your series to my son, who is unencumbered and a travel bug too. I admire you and encourage you to keep doing what you love. And I intend to really study what makes you successful and begin to live my dream as well!

  4. Not trying to be antagonistic, but just for the sake of context, what percentage of your household bills does your boyfriend pay? Because even living frugally, $600 a months for bills seems extremely low, especially considering that you live outside a major US city.

    • I pay 30% of our rent, and 50% of everything else. The only reason he pays a larger chunk of the rent is because he makes 5x what I do. Our rent is $1050, and I pay $325 of that. However, I could easily obtain approximately the same rent costs by living in a 2bdrm apartment with 3 roommates.

      The $600/mo only covers my set costs, i.e. the things that don’t change: my rent, my phone, and my credit card payment. Everything else comes out of my general account. However, my monthly costs are only about $800 (I have a post coming soon in which I detail exactly where my money goes). $325 goes to rent, $75 goes to my phone, $125 goes to the credit card, $150 goes to my share of the $300/mo grocery budget (we share an account that is used for combined expenses), and $50 pays for gas.

  5. Wow, GREAT post! Thank you for pointing out Smarty Pig. I’m signing up. And I’m also bookmarking your blog!

  6. Hi there – Loved this post (and your site as a whole). Really great concept, and solid advice. I look forward to upcoming posts in this series. I blogged about it here http://www.globetrottingtips.com/anywhere/advice-for-saving-up-to-travel if you want to check it out.

    • Wow! I’ve never had anyone write an entire post about my site before! That’s awesome. Thanks so much!

      I’m glad you enjoy the series and I hope you stick around for the rest of the series!

  7. Hi Kelsey,

    I have been implementing some of your ideas the past few months, including selling my furniture and increasingly downsizing. I am moving out finally from a house I am renting into a rented room closer to the college.

    You are an inspiration!

  8. This post gives me hope that I can do the same. I have moved in with my parents, gotten rid of my car and I’m going back to school so that I can finish up my Bachelor’s. Once I’m done with that I plan on getting my TEFL so that I can teach and travel about the world.

    • Glad I can give you hope. That’s what this series is for!

      It’s a lot cheaper to travel the world than many people make it out to be, if you’re willing to be flexible, creative, and to give up a few creature comforts. Your TEFL will help you considerably.

  9. I love this post, and this entire series looks great. I never want to fault anyone for travelling, because I always think travelling is good. But it can get disheartening when you hear about how someone making $100K quit their job to travel the world, because for most people it makes it seem like traveling is a far of dream. I do believe that often we tend to undermine ourselves. It’s nice to see travel advice from someone who can not only talk the talk, but also walk the walk. I really like the advice about asking whether people would use an item you want 60 years ago. I think, unless it’s something you need for your job, this is a really good mindset to have. I’m going to try and use this the next time I’m tempted to buy something I don’t really need.

    • I’m glad you really enjoyed the post, and I’m happy to see I’m not alone at my annoyance at those who seem to have had things relatively easy before they left to travel. I hope to see you around here more!

  10. I’ve read and reread this post several times. I totally agree that most obstacles to travel are in the mind, in fact most obstacles to whatever you dream of doing in life are in the mind. It’s often (not always, I know) a question of wanting the thing enough and figuring out how to do it.

    Not so sure about your 60-year rule, having been alive then (though only 5 yrs old) I know that there are many modern things I wouldn’t want to change like the ‘fridge for instance! I also choose not to live without a t.v., although I often think of getting rid of it, for now it stays. Obviously, computer and camera, and also cellphone and iPod. That said I totally agree with the concept of “need” as opposed to “want.” I now live without hundreds of things I once thought a normal part of life!

    Needs must, I now live on far, far less than I once did. In fact, my current income is about the same as yours, though my outgoings are more because I am single. The thing is, if I am not here, my income drops to about a half (assuming that when travelling I can still write a bit), so my question is, when you talk of these things, is your income the same when you are travellling?

  11. I’m going to have to apply this concept on a much larger scale (a family of four), but I think I can do it — thanks to your encouraging words! I backpacked Europe in my early 20s. Now, at 40, I want to take my children — or maybe my daughter first since my son is so young. We will have to save soooo much money, but the urge to travel Europe again is burning! Thank you!

  12. To me, you are RICH even at 10K per year. I think 10K was my highest ever annual income, and, as you said, THAT was an unusual year.
    My current monthly income is less than $300 USD.
    Granted, I work mainly in exchange for room & board, and my income is from freelance/indie design on the web & (increasingly) photography sales, but…
    my point:
    I have lived in 7 different US states and 4 different countries on this budget.

    My tip is LIVE LIKE A LOCAL. You don’t travel to have everything nice & cozy like it is at home.

    I spend most of my time now in India & Nepal, where most locals live on even less than what I have. You can rent a very nice room in a guesthouse for less than $150 USD per month (far less if you are willing to forego the hot shower, which is my one extravagance); you can eat on less than $5 USD per day.

    Above all, learn the value of the local currency. Do not spend what you think is CHEAP in US (or European) terms for an item/service…learn what a LOCAL would pay for it.

    And ENJOY!

    • I would call it rich too – if I weren’t living in one of the most expensive cities in the US! I don’t live on the road like many do – instead, I take 2-3 month trips each year on a tiny budget (I spent 10 weeks in France last year on only around $1200, including my airfare!). However, that means that I have a much higher cost of living, because I live in the USA with my partner. If I were single, my life would be much cheaper, but as I wrote recently, I enjoy living a bit more settled of a life than I used to, which results in me having to pay things like rent.

      However, for those folks who are living on the road (like I used to), your tips are great, and I use the same techniques when I travel.

  13. Currently on an extreme budget, and this was just the push I needed. I love what you say about the itunes.

    • Small treats are the key to not breaking your financial diet. If you’re the type that likes to eat out with friends, I suggest finding a local cheap diner or something similar. I treat myself once a week by eating a $4 breakfast at a diner down the street and it does wonders for my mood.