How to save money and realize your dream in 4 easy stepsIt is a well-known problem: someone wants to travel but doesn’t have the money to do it!

If you want to travel you will need some money, that’s true. But here’s the news: it’s not an impossible task to save enough money to realize the trip of your dreams.

In 4 easy to follow steps, I will teach you how to save enough money to realize your travel dream.

And it works because I did the same for my 10-month travel adventure in Asia.

A lot of people have the wish to go on a big travel adventure one day. For you this could be a 3-month trip in Asia, a one-year trip around the world or even a truly nomadic lifestyle with no set end date.

My travels started off with a 10-month trip throughout Asia. That was my goal and that’s what I saved money for. I made a budget for this 10-month trip and it was my purpose to save this amount of money (12.000 euro). I cut down my expenses and started a special savings account.

I made sure I could put aside a certain amount of money every month!

I will take you through the 4 basic steps that will help you save the amount of money you need for your travels.

Before I take you through these steps I want to make you aware of 3 important ingredients you will need to succeed.


1. Determination

When you set your goal it requires determination to reach it. Stick to your plan of saving money even though it might be challenging sometimes. Just keep the reward in mind: traveling!


2. Willingness

You have to be willing to make certain changes in your lifestyle! A lot of people have developed a certain lifestyle over the years that makes money vaporize. For example: going out for dinner every week or keeping up with the latest fashion. If you want to save money for the trip of your dreams, you have to be willing to give up a certain lifestyle that you might be used to.


3. Time

Nobody saves a large amount of money over night. Saving money takes time. It might take you 3 months to reach your goal, maybe 6 months or maybe even a whole year. Don’t give up and keep focused on your goal!


Okay! Now that you know what you need to succeed, here is the first step!


Step 1: Determine how much money you need to fund your travel trip

What does your dream travel trip look like?

Will you spend 3 months in Asia or do you want to make a one-year trip around the world.

They both require a different amount of money. Of course there is also the opportunity to work while you are traveling.

With this guide I will focus on people who want to save money before they go traveling and who don’t necessarily want to work. I didn’t work during my entire 10-month trip in Asia. I put in a lot of effort to save up enough money because this was MY big travel trip and I wanted to enjoy it to the fullest.

To determine how much money you will need to fund your trip, you will need to consider the following things:

How long are you going to travel for?

Decide on your initial travel period. As obvious as it may sound, usually the longer you travel for, the more money you will need. Of course this all depends on the countries you visit and the amount of time you spend in a country.


What countries and places will you visit?

Make a list of countries, the places you will visit in each country and the amount of time you will spend in each country. Countries in South East Asia are pretty cheap to travel around. But if you go to Australia or New Zealand for example, it will be much more expensive. Do research on the Internet such as:


  1. What do the activities I want to do cost?
  2. Do I have to pay for a visa?
  3. What are the costs of living in a country (Lonely Planet)


What insurance do you need?

Don’t save money on travel insurance!

Find a good travel insurance on the Internet or go with your own trusted company. In a lot of countries medical costs are pretty high. Make sure you have got a good coverage.

I have got a backpacker travel insurance from Mondial Assistance. From most companies you can get a pretty accurate quote of the costs! For more information about getting travel insurance you can check the advice of Nomadic Matt.


What items do I have to buy before I go traveling?

Determine what you have to buy before you go traveling. Don’t buy too much! I remember that I threw away half of my stuff after one month in Asia! Important things are:

  1. Good footwear
  2. A good quality and comfortable backpack
  3. A good reliable Swiss army knife
  4. A good torch

For the rest, just take clothing, your passport and banking cards.  Just remember, don’t take too much!


How often do you have to fly?

Pick your first destination and check how much it will cost to fly there. Usually Asia is a good starting point because tickets to cities like Bangkok, Singapore, Kuala Lumpur or Hong Kong are pretty cheap.

If you only travel in Asia you will be able to travel mostly over land. If you visit multiple parts of the world you will probably have to fly. In that case it is sometimes cheaper to buy an around the world ticket. Fellow travel blogger Nomadic Matt wrote a great article about this. 

A bus, boat or train ride usually takes longer than a flight. But flights are more expensive. Think about how you want to travel and make an estimation of the costs.

For cheap flights you can check Skyscanner or another comparison site. 


How will you live in a country?

When I traveled around in Asia I tried to do everything as cheap as possible. I slept in dormitories, ate street food and took local transport. Of course there are other options. You can dine in restaurants or sleep in more upper class hotels. It’s all up to you!

Use the average living costs in a country to determine a budget that suits your wishes. Spend a day in the library and go through the Lonely Planet books for a good estimation (that’s what I did and it worked out pretty well).


Which activities will you do?

When you are in a country, doing activities is a big part of the experience. Of course you want to ride that elephant, go on a jungle trekking or do a skydive. Do research about the different activities you can do for the places you go to and make an estimation of the costs.

If you follow the above advice and work through it, you will end up with a pretty good and accurate estimation of your travel costs. The amount of money you calculated will be your saving goal! Now you are ready for step number 2!


Step number 2: make an overview of your monthly income and expenses

In this step you will make a monthly overview of your income and your expenses. This will be the base for the amount of money you will be able to save. First of all, make an overview of your income. This will be the amount of money coming in every month. Secondly, you will need to make an overview of all your monthly expenses like this:


Category Amount
Car & fuel
Insurance (health, car etc.)
Gas, water, electricity


Use a sheet like this to make an overview of all your expenses. In the end you will have a total of all your expenses and a total of your income. Now you know how much you will be able to save at this point.


The best thing to do is to monitor your expenses for one month every day! Keep a record of how much you spend on lunch, coffee, eating out, luxury articles, clothing, nights out in the pub etc. This will give you an accurate overview of your spending pattern.


Step 3: Eliminate your unnecessary expenses

Now that you have made an overview of your monthly expenses, it’s time to have a critical look at them!


First word of advice is: Kill your debt!!

I know, if you have got a student loan or a mortgage it’s hard to pay that off. I will give you some tips on these ones later. But a number one budget killer is debt for things like a new car, a TV, a Dolby surround system or whatever luxury products you can think of. Usually the interest rate you pay is so high that you will end up paying twice the price of the initial cost of a product.

If you have got debts like this, the first thing you should do is start paying these off before you start saving.


Second word of advice: Stop buying things you don’t need!!!

Think twice before you buy something new. Do you really need new clothing or do you have some clothing in your closet that you have never worn before? Ask yourself “Do I really need this?” and “Does it make me happy?”

In a western society, we usually own a lot of things without even realizing it. A very important step to take is to stop expanding! It might be hard sometimes, but every time you are about to buy something you actually don’t need, think of your big world travel plans and your savings goal. Like I said: it takes determination and willingness to give up certain things.

Now that you have taken a good look at your debt and have stopped expanding, it’s time to eliminate your unnecessary expenses. Take a critical look at all of your expenses and look for opportunities to reduce or eliminate them. Here are 15  good tips to start off with:

  1.  Instead of buying lunch at work make your own lunch (I always made my own lunch and it saved me at least 100 euro’s a month!)
  2. Instead of going out for dinner, go to the supermarket and make your own dinner (going out for dinner is a real budget killer!)
  3. Consider moving in with your parents or somebody else if you’re renting (a big and sometimes inconvenient step, but I did it and it saved me a lot of money!)
  4. Stop smoking, drinking or quit other bad habits
  5. If you have got a student loan, try to incorporate it into your monthly spending’s. Set a certain amount aside to pay for this debt. The advantage student loan usually has a low interest rate so you can pay it off on a long term basis.
  6. If you have got a mortgage, consider selling your house (another really big step! I sold my house and it gave me so much freedom and some extra money for traveling).
  7. If you don’t want to sell your house, consider renting it out when you are on your trip. This way you can cover your expenses for your house during your trip.
  8. Stop drinking coffee.
  9. Instead of going out with friends invite them into your house or hang out at a friend’s place.
  10. Cancel your gym membership. I always go for a run and then exercise at a kid’s playground. It’s free and fun!
  11. Consider selling luxury things like TV, car and Dolby surround set. Do you really need it? I hardly watch TV because I think it’s one of the biggest time killers.
  12. If you do need clothing, buy them when it’s discounted.
  13. Watch offers in the supermarket. A lot of the time things are half price or if something is close to the expiry date it’s always discounted. And remember, there is a big safety margin in expiry dates! Trust your smell and eyesight to judge whether something is still eatable!
  14.  Use coupons! On the Internet you can find a lot of coupon sites with extremely discounted prices.
  15. Don’t get the newest phone, but get a SIM only deal for your old SIM lock free phone. This saves a lot of money!


Step 4: Set a goal for yourself of how much you want to save every month

In this step you will have to determine how much you are willing to save. You have made an overview of your income and your expenses, eliminated unnecessary expenses and you stopped expanding.

Try to make your goal SMART! This stands for: Specific, Measurable, Attainable, Realistic and Time bound. My goal for my saving was:


“From January 2011 to October 2011, I want to save a total of 12.000 euros!”


For me this goal was specific,. In October I could measure it, it was realistic which I’ll explain to you below and it was time bound (January 2011 till October 2011).

Now you have to set a goal for yourself of how much you want to save every month.


When I was still working I earned about 1.900 euros a month. After cutting down all my expenses, I ended up with a total of 800 euros in monthly costs. I decided to save an amount of 1.000 euros a month. I must say that I was living with my father for a while. Usually renting or owning a house takes up 1/3 of your income. So I was able to save a big amount of money by eliminating these costs.


You have to decide for yourself how much you can miss. Again, putting aside a certain amount of money every month takes determination and willingness. These 6 tips will help you set aside the amount of money you decided on saving every month:


  1. Open a special savings account at your bank. If you try saving on your spending account, you will end up spending most of it!
  2. See if you can “freeze” your savings account so that you can’t touch it during the months you are saving for your travel trip.
  3. Choose a savings account with a good interest rate!
  4. As soon as you get paid from your job set aside the amount of money you want to save. If you don’t do this immediately there is a big change you’ll end up spending it.
  5. Set up an automatic transfer to your savings account every time you get paid, so that you won’t forget to save up money!
  6. Don’t use credit cards!


With these 4 simple steps you will be able to save money for the travel trip you’ve always dreamt of! Apply them and find out how easy it actually is to save up some money. Some last tips to keep you inspired to save money:


  1. Put a little note in your wallet that says “Do you really need this?” It will remind you when you are about to buy something you don’t actually need!
  2. Don’t put your focus on material things. Enjoy the little things in life and the people that surround you!
  3. Turn off your TV! It will save electricity, you can focus on other things and you won’t be exposed to all the advertisements on TV.
  4. Make a list before you go shopping and stick to it. Also don’t go shopping when you’re hungry, because you will end up buying a lot more!
  5. Tell people in your environment that you are saving up money for a big travel adventure to create support and understanding!


The bottom line is: It’s all about simplifying your life! Stop expanding and get rid of unnecessary expenses! Combine this with determination and willingness and you will be able to save money. If you are interested in simplifying your life, you can read more about minimalism on the Minimalists website or on the website of Joshua Becker. This is something I try to apply to my life and it allows me to travel long term.

Some other good reads about saving money

You can also check out these articles by other bloggers who wrote about saving money for traveling!


–       Adventurous Kate on how she saved 13.000 dollars in 7 months

–       52 great tips on saving money from Ytravelblog

–       6 awesome tips on how to save money by Four Jandals

–       Nomadic Matt’s guide to traveling when you have no money at all

–       100 great tips to save money on The Simple Dollar

–       How to save money before, on and after your trip by Wanderlust & Lipstick


What are your best tips for saving money?


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