Saving for Long Term Travel – Frugality and Focus!

A little while back, we talked about one strategy for saving money for our Big Trip: the “Feeding Piggy” game. I loved how that blog post was shared like crazy all over Facebook. Priceless really! I am thrilled we encouraged so many of you to start this little savings game for yourselves.

After that post, many of you sent emails asking us what else we are doing to save money. Because you asked, Dear Reader, here is another “Saving for the Trip” post – our take on the how, why and what of saving for long term travel. Later, we’ll follow up with another post letting you know how much we made and saved, and sharing with you anything else we tried. Promise. Dad is really good with spreadsheets so we may be able to even share actual numbers with you to illustrate our efforts.

So, here we go. We’re not financial planners or advisers, but here’s a list of the things we are doing or are about to do. I have to warn you, though, that the process is not glamorous and the work is hard. In so many ways, saving money – for long term travel or anything else – is like going on a diet: a money diet. The only way to save money is simple: spend less and make more. And to save a lot of money fast, spend even less and make even more.

Yeah, I know, underwhelming. But true.

#1 Set a Goal

When we made the decision to Sail the Mediterranean, we set ourselves a financial goal.  We figured out how much money we will need to enjoy our first six months, which has to include a down payment on a sailboat.  That’s the total we’ll require for phase one of our Big Trip.

But with all the trips we’ve already taken, we had nothing left in our savings account. So we started from scratch, setting a savings goal of a certain amount every month. While our monthly target is not an easy one, we were realistic and set a target that we feel is obtainable in our situation. And by setting a monthly goal, we are working with bite sized efforts. That helps keep up momentum.

When we were crunching numbers, we were careful to set ourselves up for success. That is why we are not leaving until May 2015; to leave any sooner would have required that we save more, faster than seemed possible for us. We have to believe that our goal is obtainable; otherwise, the whole plan remains in fantasy territory. So, we set a realistic budget, calculated the minimum we’ll need to meet that budget, and consider anything more we save as gravy.

A Stinky Word: Debt

We get a lot of emails from people who want to travel but feel trapped by their debt. Here’s what we think: if you are deep in debt, then the first step is to clean up your financial house. Bummer, I know, but once you straighten out your finances, you’ll be good to go and with a lot less emotional burden. You can use our tips and tricks to pay off your debt … and then to save for travel!

But … (yes, the proverbial “but”) … we don’t think that student loans or mortgage payments should necessarily prevent you from traveling. At least that’s our opinion. Those debts will make things a little tougher and may slow you down in reaching your savings goals, but they’re long term debts that, we think, are something to take into account as you plan your budget. For example, we have a mortgage and need to make a payment on it every month. We calculated that monthly mortgage payment into our travel budget. Also, as much as we would like it to be otherwise, odds are we will need to take out a loan to finance the purchase of our sailboat. Therefore, we’ll probably have loan payments to make while we’re travelling.

Bottom line? When you plan your travel budget, be sure to budget for any loan or mortgage payments due while you are away. You don’t want to default while you’re on the road! Consider consolidating your debts, if you can, so you are only dealing with one monthly payment, and make that payment religiously, even as you’re travelling.

# 2 – Cut Back Spending

After you’ve set your savings goals, it’s time for the hardest part: look at where your money is going and figure out where you can cut the “fat.” You’ll find that most of your new savings will come from not spending money on all that stuff you don’t really need.

Don’t strip your life to total austerity because that will not work. If you completely starve yourself financially, you’re just going to end up binging.  The bipeds still spend money, but we are far more conscientious about it.  Now, the money goes only to things that really matter to us.

Before we share our ideas with you, we suggest you first find out what you spend. It is a pain to do, but for two to four weeks, jot down every single little expense and purchase. (We used two free Apps on the iPhones. Mom used Visual Budget Expense Tracking and Dad, the Pocket Expenses Personal Finance-Account Tracker.) If you want results, you’ll need to keep track of everything from eating out, online shopping, movies, coffee to rent, mortgage payments and other bills.

Once you have a list of your expenses, split your expenses into two categories: Must and Optional. This is where things get interesting: many of what you thought were your Musts might, in fact, be Optional. Also, remember that life is full of “phantom expenses” (e.g., dry cleaning). We fail to note so many “little” expenses.  It is amazing to me how much humans are willing to “bleed money” without being conscious of it. So, if you really want to know where your money goes, be diligent and honest. And the longer you track your spending, the more realistic will be your final financial picture.

Want some examples of financial fat we’ve targeted? Let’s take a look.

Cut the Coffee – The bipeds are coffee snobs. They love their Bridgehead and Bridgehead loves them, or at least Bridgehead loves the bipeds’ money. Coffee (or whatever your poison) is one of those little things that quietly drains your bank account without you ever noticing. That daily coffee costs the average North American $150 per month. So, because the bipeds can’t give up their coffee, they came up with a plan. They now will only brew their own coffee at home and bring it with them in a thermos.  The total savings will provide us with a few weeks in Spain!  $150 a month is a lot of extra cash, especially if you multiply that by two bipeds and add in the little extras that often go with coffee. Muffin anyone?

Learn to Cook – When I sneak into the grocery store with the bipeds, I notice that food prices are a lot higher than they used to be. That is probably why restaurant prices have also gone way up. Luckily, Mom and Dad are both great cooks, so they happily cut down eating out to once every fortnight. What do we mean by eating out?  For us it includes:

  • meals at the food court,
  • coffee shops,
  • pub,
  • brunch at the French Baker,
  • (if you are into it) fast-food,
  • restaurants, and
  • take-out.

Now, when we do eat out (or bring in), we have to choose. Will we order pizza, sushi or Pad Thai? No longer will we do all three in one week or even in two. Instead, we cook our dinners with plans to make enough for leftovers to use for lunches the next day.

You can’t cook, you say? Well, now is a good time to learn! You don’t need to be a pro to eat well. There are literally millions of cooking sites that will teach you how to cook fast and healthy meals, even for families and people without a lot of time. Learning to cook is a win-win: you save money and most likely, you’ll eat healthier meals once you’re in charge of the ingredients.

Note: Avoid buying ready-made dishes or those TV dinners.  Not only are they unhealthy (processed food is not healthy and most have too much sodium and sugar) but they also usually cost far more than making something from scratch. You’re better to invest in a slow cooker!

Public Transportation – Cars cost a lot of money.  They just do. Between insurance, repairs, and gas, your car can suck your bank account dry. If you can, get rid of your car.  If that’s not feasible, use your car as little as possible. I’m willing to bet that you don’t need a car as much as you think. Learn to love the bus, take the subway or walk, or when you do need a car, look into car sharing programs such as Virtue Car. It certainly takes the bipeds longer to get to work without a car – Mom has a 45 minute walk each way – but they find the down time and exercise to be important parts of their well-being program.

We understand that this tip may not be feasible for everyone, especially those in smaller towns that don’t have good public transportation. If that’s the case, an alternative is to sell your car and buy a cheaper used car. Or, if you have two cars, maybe it’s time to see if you can manage with just one, even if it means getting up earlier or having to drive a partner to work and pick them up.

Get Rid of Cable – In the age of free (legal) streaming of TV, there’s no reason to purchase cable television. We got rid of cable and now watch everything online for free. Even if we have to wait a little longer to see a show or give one up, it doesn’t kill us. In fact, we’ve really enjoyed watching our shows without having to put up with the commercials. If you’re really brave, you might even want to get rid of your television all together!

No Landline – With two cell phones, we did not need a landline. So we ditched it.

Downgrade the Cellphone – Getting a cheap phone without any fancy apps costs half as much a month than a smart phone.  Sure, you might get bored while waiting for a bus, but saving $500 or more a year will be worth it when you get to splurge on that cruise down the Nile in Egypt. Besides, people watching at the bus stop can be a lot of fun, although, personally, I like to sniff legs.

Pay with Cash – This is such an old trick but it works! Going to a cash only system forces you to pay attention to the cost of every item. Using credit cards has a way of feeling like money wasn’t spent. But that credit is not money you are entitled to or actually have; that’s why it is called credit! You are borrowing that money. Unless you are very disciplined and pay off the entire balance of the card every month, you are better off going with cash.  For groceries, we like to use a pre-paid credit card that has one months’ worth of groceries already on it. Yes, in advance! It forces us to stay within a very specific price range for our weekly trips to the supermarket. As a result, we have stopped overspending on our grocery allowance and even sometimes have a little extra!  All the little extras allow for an occasional splurge. I always vote for a fancy cheese or filet mignon!

Forced Savings –  We have learned that the best way to set money aside is to not even see it. If you don’t see it, you don’t tend to miss it. The bipeds’ employer has a system that allows money to go directly from the bipeds’ paycheques into Canada Savings Bonds.  Most banks will also do this for you with a pre-determined amount going into a savings account. Interest rates are pretty low these days but you can still get 1-2%. It’s better than nothing at all. Find what works for you and set it up.

Stop Shopping Online and Buy Second-Hand You know how it goes: you’re bored so you go on eBay, Craiglist or Kijiji and then you’re tempted. Next thing you know, you’ve bought more stuff. As much as you might enjoy that new Louis Vuitton purse, iPhone, poster, print, book, antique, collectible or CD, that’s money you no longer have for your trip. So, stop it! Those sales and deals aren’t saving you anything if you didn’t need to make the purchase to begin with. Buying something you don’t need, even at half price, is still wasting precious travel/savings dollars.

As for those things you do need – as opposed to want – why pay full price when you can pay half? That’s when you want to shop eBay, Craigslist or Kijiji, but if you can’t be trusted to go online without buying things you do not need, then get a friend to “supervise you.”  Give them permission to remind you that your trip is more important than that rare book, gear or gadget that’s tempting you on eBay.

Cut Coupons – Grocery coupons, flyers and loyalty cards all reduce the price you pay at the cash register. Clipping coupons might make you feel like a cheapskate, but the goal here is to be frugal and save money, and coupons definitely help with that.

Note: Be careful with where you’re wielding those scissors: only clip coupons for those things you would normally buy. A coupon for $1 off a $10 item you would never otherwise purchase is not a savings at all. It’s a $9.00 loss.

Go “No Name” – Usually, you pay more for a brand name product. Save money by going with the generic alternative. Often, the generic product is the same as the brand name. In fact, it’s usually a brand name company that makes the generic product. This rule of thumb applies not just to food; it is also a good savings technique when purchasing pharmaceuticals.

Refurbished – Buying a refurbished product does not mean you are getting a lower quality item.  Often, all “refurbished” means is that the factory seal was broken and as a result, the retailer can no longer sell the product as new so has tagged it as refurbished. When buying refurbished, make sure the product was made for use in your country and that it is still covered under the manufacturer’s warranty (normally 90-days).  Also, be sure to inspect the product in all its functionality within the company’s return period.

Note: When buying refurbished products, check that the item was refurbished by the manufacturer or by a reputable, authorized retailer. Purchase only from reputable dealers and retailers.

Do Not Window Shop – There is nothing worse than going to your favourite mall or store and browsing the gorgeous displays when you are not supposed to be spending any money. So don’t go! We’ve found that there are so many better things we can do with our time. Mom has always wanted to sort out the boxes of old family pictures she has – scanning them, saving them on a hard drive – in order to de-clutter some more.  Dad is painting more and making Montecristo Travels YouTube movies. The bipeds both think they should learn how to speak Spanish (free online course) and dance the Argentinean Tango. All much better use of their time than going to the mall, don’t you think?

Skip the Movies – Movies are ridiculously expensive. It can cost up to $15 for a ticket, and an equal amount for the popcorn and a drink. Movies often also meant dining out first, not to mention the costs of driving to get there. It just isn’t worth it. No one needs to be the first to see a movie. Not if it means having to give up seeing the Acropolis because we can’t afford the Athens docking fees for a day or two! Instead, we rent movies online via Netflix (unlimited access to movies and televisions shows for $7.99 per month) or iTunes ($4.99 per movie) or find other means of accessing entertainment, such as Project Free TV.

Stop Drinking Alcohol – Cutting down the amount the bipeds drink had a huge impact. The bipeds are not heavy drinkers to begin with, but a bottle of bubbly here, some beer there, a glass of wine with dinner while dining out … . You might not realize it, but giving up alcohol is probably one of the easiest ways to save money. Dad still likes his little “treats” – a cool glass of vodka on a hot summer evening or something similar – so he has given himself a small monthly budget and sticks to it. He’s also careful with his cigar purchases, smoking cigars and drinking alcohol often going hand-in-hand.

Cut the Dry Cleaning – If you have items that are dry-clean only consider getting rid of them. (Sell or donate them.)  The bipeds make sure that any shirts, pants or sweaters they need (not want) to purchase do not require dry cleaning.  Although it can’t be helped for some things like winter coats and business suits, cutting out (or down) the dry cleaning saves a surprisingly large sum of money. For those things you must keep that still require dry cleaning, wait for the deals. At the end of every winter, you will often see a “get one coat cleaned and another one 1/2 price” type of sale.  If you have your shirts pressed because you don’t know how, learn how to do it yourself. Dad is a pro.  In fact, he now does all the ironing. Mom finds this very sexy. *rolls eyes*

No Renos – The bipeds would really love to renovate the bathrooms and upgrade the kitchen. But they will not because the upgrades are for aesthetic reasons only. It’s a matter of taste – design and style – rather than necessity. So this shall wait, because, right now, our Big Trip is more important.

And that is what it boils down to, Dear Reader. What is more important? That is what we mean when we say “our focus is our trip.” No distractions. We have found that cutting our daily expenses, being frugal, as well as downgrading to a simpler way of living will allow us to save a lot of money for our trip(s) without having to find an extra source of income.  Although we’ve been doing that too.

# 3 – Boost Your Income

It wasn’t enough for us to just cut our spending; we also needed to get more money coming in. After all, there is only just so much the bipeds can squeeze out of their salaries.

Sell Stuff –  Even as minimalists, we have identified things we can and should sell: sports gear, art we no longer love and stereo equipment from before the bipeds moved in together and ended up with two of the same thing.  Not only will selling these items generate revenue for the trip, it will also save on storage costs when we leave.  After all, while eating pasta in a lovely little restaurant on the Amalfi coast of Italy, we will not be missing those cross-country skis. You can make a surprising amount of money selling your old clothes, books, electronics … umm … lava lamp?

Before we leave on May 1st 2015, we will also sell our car.  We love our car but it will not do us much good while we are sailing the Mediterranean for six months. It will also allow the bipeds to cancel their car insurance and rent out their parking space while we are away. In fact, we will also rent out our apartment.

In addition, the bipeds have two small income properties. Right now, they don’t really make money on these properties; the income just covers the mortgages, but in time, those properties will generate their own little added income. The bipeds may even sell one or both properties before we leave in order to cover the cost of the sailboat. We are yet undecided. The housing market will dictate. I will keep you posted.

Because of their already heavy full-time work schedule, the bipeds can’t really take on a second job to bring in more income.  But they are always looking for that little extra gig they can fit in.  Dad sells his art, Mom does ghostwriting or freelance writing work. Heck, they will even doggy sit! Nothing that pays well, but it all goes into the travel account. Anything that gives us that little extra boost.

Every extra dollar brings us one step closer to our goal, so we try and be creative!

#4 – Stay Motivated

It’s difficult to turn down a friend’s invitation to a swanky restaurant, or to have to say no to an out of town event requiring airfare. Living simply for months on end while everyone we know is continuing as they were … well, at times it really gets to us.

So what do we do? We keep our eye on the prize, reminding ourselves constantly what we are working towards. We talk about the trip to anyone who will listen. We blog about it, read our books and read about others who have done it. Every $20 we manage to save is another meal, museum or afternoon on some remote Greek island. Every extra $100 is some cool activity we will get to do somewhere. It’s going old school. It’s remembering that there is such a thing as delayed gratification.

The highlight of the month is tallying up how much has been saved for the trip. Watching the number jump higher and higher is a reward in and of itself.

We do still splurge a little.  We will still be travelling between now and our Big Trip. The trips will be in order to acquire a skill we will need, but they will also include some side trips to visit friends. If we don’t do this, we will lose our minds. We are, at heart, nomads and thus need travel more than anything else.  So we spend our money where it really matters to us.

To sum up:

  • Set reasonable goals
  • Cut back on major expenses
  • Don’t buy “stuff”
  • Make extra money however you can
  • Get a separate savings account/savings bonds
  • Keep your eye on the prize!

The irony is that there is a good chance that now that we have made these changes, we will never go back.  Our dream is, after all, to be part-time nomads for the rest of our lives!  Frivolous spending and the “shopping spree high” just doesn’t seem worth it anymore.

So, the next time you hear yourself saying “I can’t afford to travel,” take another look at your lifestyle and see if that is really true. Must you live in a big house or is it really optional? Can you downsize or bring in a roommate? Must you drive an SUV or can you downgrade to a small, fuel efficient economy car?  Look at your “ Must and Optional” list and decide what is more important to you, and act accordingly. And be honest and don’t lie to yourself.

The reality? You can afford to travel. Most of us just have expenses we have convinced ourselves we can’t live without. So when you say you can’t afford to travel, perhaps what you really mean is “Travel isn’t my real priority.” And Dear Reader, that is okay too!

17 Comments on “Saving for Long Term Travel – Frugality and Focus!

  1. Great tips!!!! I already use quite a few, shop second hand , eat out only once in a while,drive less,no dry cleaning,no drinking, no going out to clubs or movies,did do a small reno but it was paint only 😉 plus lots of other cuts. There stll isnt enough moolah to go around most of the time. LOL!
    I admire your determination and drive and I hope your dream trip comes true.

    • Yep marlene, I find that even when we do a lot of things … there is still more we can do. Like sellgin stuff we don’t use and so on. Did you know that the last Starbucks Mom and Dad had was with you and Stewart?

  2. This is great. I’d also add car payments to the list of acceptable debt that you can budget within travel.

    And, if may be extreme in out super-connected world, but another thing I think can be cut is…

    – Cell phones. Instead of having a cell, I use Google Voice to make outgoing calls (free within the US and super cheap elsewhere) and have a Skype phone number ($5 per month) where people can call me via my computer. Not only did it cut down on costs, but it also eliminates distraction and helps me live in the moment. The lowest cell plans are, what, $40 or $50 per month? My phone costs are less than $10 per month.

    And if you want to just try it out and see if you can hack it…most cell companies let you put your plan on hold for a month. You won’t pay a cell bill that month or be able to use your phone. Try it out and if you hate it, you can turn it back on.

    • I think if you are leaving on long term travel (as in say … 6 months or more) than not having a car at all makes more sense to us. That is just our take on it. If you are away for just 2-3 months than yeah … totally agree with you on that one!

      I would be interested in knowing how you manage your business without a smartphone of some sort. We find that very interesting. Because we manage about 80% of Montecristo Travels business activities on our devices. I would love to hear more if you are willing to share. Perhaps the nature of the business has something to do with it? If there is a need for real time or not. Maybe a perceived need for real time … hmmmm…

      • I do everything on my computer (Google Voice and Skype Phone Number for calls, browser for most anything else). While I do have readers around the world, the majority of my audience and clients are North American, so, as far as real-time goes, my two strategies are:

        For readers: I don’t worry about real time. I try to do most of my posting, tweeting, etc. during waking hours in North America. If it’s two hours after I was wandering around a museum, I find no one really minds.

        For clients: I usually run a bit of a tight ship. I schedule my calls ahead of time and make sure that I’m home in front of my computer (which is best anyway, since I often have to look things up, make notes, etc.). It’s actually super nice to have things scheduled out…because calls in the middle of your workflow can really disrupt things. So my schedule generally looks a bit like this (on weekdays): I do my most important work first thing in the mornings while clients are still asleep. I usually take a break in the afternoon for a walk or some personal time. And then in the early evenings, if needed, I return and take a few calls. Of course, this depends greatly on my workload (as sometimes I have much longer afternoon breaks and sometimes (like this winter), I work long days). But overall, that’s where I land.

        • Wow … going home to take a call. SO damn old school Gigi!!! LMAO! that’s neat that you can do that. I don’t think that would work for us, we are perhaps too … nomadic in spirit. The reality is we can’t even know where we will be and I think the idea of having to be home at a specific time would drive the Bipeds nuts. I just can’t imagine having to cut something short in order to go take a call…

          Having said that 7:00 every Sunday we Sky[e with gran so maybe it would work. We ask because with the sailing that may be something we have to do.

      • P.S. Fun fact: I’ve actually never owned a smart phone. Even when I lived in the US. In my industry, I get made fun of all the time. 🙂

  3. Great post, Monte. My biped mama would just disagree with one thing. If you can trust yourself with a credit card, find one that has no annual fee and “rewards”. My folks have a Capital One credit card (here in the US of A). They were able to be reimbursed for $1,000 worth of plane tickets by charging everything possible on the card. They have never carried a balance on any credit card, but one should be aware that plastic is real money. So, Dude, what are you doing to help your bipeds save? Judging by your blog photos, it looks like you’re still demanding designer dog duds. Your Phurry Philly Phriend, Dino. P.S.: I stole a look at my mama’s calendar. It looks like I have to be professionally groomed on Friday. I personally volunteer to forego that expense. Really, what’s wrong with phurry, especially during the winter?

    • We do not disagree Dino … I believe I said that if you have the discipline for it then yes credit cards are amazing. I agree that there are some great benefits and thank you very much for listing them all here. Unfortunately for my own bipeds they don’t have that discipline. So plastic … can’t be real money unless the money is transferred onto it ahead of time. I know … they’ve gotten into trouble with it a few times.

      On a side note: THEY DO use plastic almost exclusively when on the road. They put the spending money on a card ahead of time and yes, sometimes it goes over… but for travel purposes credit card (in our case a VISA that collects travel points) is a lot easier to manage.

      As for me and what I am doing, well I have very few needs and no money of my own. So far – any new fancy duds have been gifts! I’m a lucky boy Dino, I am aware of that.

      I do have to say that with the cold we have here I must agree with you that more fur would be better. I also love happy naked time and spend my indoor time free of anything – I don’t even have a collar (I am microchiped) … I guess I am lucky, I don’t need grooming. Just an occasional bath (every 8 weeks or so), nail trim once a month and my weekly Furminator session!

  4. Too often we deny ourselves the opportunity to travel because we don’t have the money all at once. That mindset is a result of living in a world of instant gratification. Because we can’t have it now, we get angry and wonder why can’t we do fun things like the rest of the world. Guess what? WE CAN!!! The information found here is proof that we can travel – if we really want to, if we do some basic financial housecleaning, and if we have some PATIENCE. Allow yourself to savour the anticipation. You may have to wait a year or two to save up enough, but have fun “gettin’ giddy wit it”. You have some great bit of information here, Monte – thanks for sharing them and helping us believe that anything is possible – the museums in Paris, afternoon tea in London, nightlife in Barcelona, or the tastes and smells of Tuscany – it is ALL POSSIBLE if you have a plan. I am terrible at long-range planning and these posts prove to me that I can have ALL of it. Simply put a basic plan together and all of that – and more – can be at my fingertips.

    • This comment made everyone here grin ear to ear! We are thrilled that this hit home for you and gave you that hope. YOU WILL go on your trip …wherever that may be … it will be all the more a triumph and joy for the delayed gratification! Keep us posted on how you do … and where you want to go first!

  5. Thank you for this wonderful post, Monte. There are a lot of useful and practical tips. What I already do is I constantly cook at home for my family, I don’t have other choice, I have to be sure my son receives all nutrients and calories, and they are counted for sportsmen. I don’t do dry cleaning and manage myself, because I am conviced it is harmful not only for your clothes, but for your skin, except just few things that I cannot manage myself. I don’t have cleaners coming, I clean my flat by myself, and it is not so small – 100 square meters, I clean the windows and do everything, in fact I just don’t like strangers walking in my property and doing smth for me, I get more tired from them, than from the doing the job by myself, and I don’t have any loans or mortgages – hate to make a loan and then to pay out the debt, so i live for what we earn and nothing more, and pay the flat and the house bills only, I cannot save money at the moment, because I have to invest everything i have into my son’s progress. Thank you once again for this wonderful and useful post,xxx!!!

    • AH! Val see that is perfect. Your son and his athletic career IS your priority and your focus. That is great! It means travel is not … for now. That is perfect and I love that your life is based on what is important to you.

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