How to Travel Debt-Free
We all love a good holiday.
Most of us, though, will admit that some well-earned travel to tick a thing or two off that bucket list will inevitably leave us with a mountain of unwanted credit card debt. Flights, hotels, eating out for every meal, visiting tourist attractions, souvenirs, gifts for friends and family… it all adds up. Quickly.
Facing yet another scenario where my husband Dan and I have had to dip into our savings to clear credit card debt (this time from the perhaps-too-festive season), Dan suggested that we forego our long-fantasised 2017 USA trip in favour of protecting the remainder of our nest egg.
This was perfect logic, of course. Life has been expensive, and we’ve been struggling to avoid debt – obviously a lavish overseas trip is not appropriate. The other part of me, however, was mortified at the thought of missing out. Having endured Dan’s terrifying battle with leukaemia in 2015, as well as the sudden loss of my closest friend Stacey and her newborn daughter in 2016, it was impossible to find any reason worthy enough NOT to embark on a journey that we both so desperately wanted to experience. Life’s luxuries hold more value for us now than they ever have before.
As with most things, we found the answer in a good, solid plan.
We're not savvy investors, and we're not risk-takers with our money. Maybe we'll look into getting more creative with our dosh further down the track, but as life stands for us now, financial stability is key. So, I spent hours carefully analysing our earning and spending, intricately obsessing over every opportunity to shave a few dollars here and there to bulk up our travel fund and get our butts on that plane. Every single dollar has been accounted for.
We are now the proud holders of budget perfection.
A balanced, realistic budget that will get us to the USA for three weeks by this September without spending a single dollar that we’re not scheduled to earn. Luxuries, unexpected incidentals and potential blow-outs are all accounted for. Weddings, birthdays, shopping splurges, sudden emergencies, fancy dinners, celebrations, takeaway meals, everything.
Each month, we'll have an exact figure that we can safely put aside for our dream holiday. We can spend that money on trip-planning – flights, hotels, or anything else we can book in advance – but if we run it down to zero, there’s strictly no more booking until the following month. No ‘we can pay that off later’. No ‘just a little over won’t matter’. No debt allowed, no rounding up or down. The budget is constantly being compared to our bank account and adjusted as necessary if expenses turn out to be more or less than anticipated. It's a rock solid work of art.
Since adopting our budget, Dan and I have felt the remarkable mental shift of looking at money in a totally different light. It’s only in this mindset that you pick up on the little things, such as when you realise a snack you buy from a cafe every other day is actually half the price at the supermarket, or how much cheaper it is to see a movie on a Tuesday. They may sound small, but they accumulate rapidly. Finding corners to cut and deals to grab has turned into a kind of game - and, believe it or not, we’re genuinely starting to enjoy ourselves.
Here are our best tips so far:
1. Achieve budget perfection. Write your budget, and don’t estimate. Go through your last bank statement with a fine-toothed comb, and make sure every single expense that may recur is accounted for. If you really must guess, over-estimate. Leave no stone unturned. Include luxuries - they make up life. Keep chopping and changing until it flows with your thinking, and you love (yes, love!) looking at it. Look at it every single day, and tweak as needed. TIP: If you’re working with a monthly budget, remember to take note of how many weekends fall within your payment month – sometimes it’s 4, sometimes it’s 5… this makes a huge difference to your weekly spending.
Budgets are a super personal thing, and frankly I find using someone else’s template will rarely work long term, but if you really must have a guide there are a bazillion apps out there to help keep you on track. You could try You Need A Budget, Pocketbook (ideal for Aussie savers) or Mint.
2. Open up a high interest savings account. Do you research, and ask around. There are plenty of products on the market. Aim for one with a high interest rate, but with some flexibility, and read the find print – make sure you can withdraw your hard-earned savings when you need them without losing any accumulated interest. Better yet, open several accounts (they’re usually free), and name them as whatever you're saving for - it's way more satisfying to watch them grow when the goal is front and centre!
3. Make a commitment to not buy anything for one whole day. This includes your morning coffee, a pack of gum, or parking next to a metre. You can be REALLY resourceful when you need to be! Once you get through the day, see if you can make it two…
4. How many half empty bottles or jars are in your house? Shampoos, moisturisers, cleaning products, herbs and spices, sauces, canned foods… make a commitment to finish them all (it's less gross than it sounds, I promise). Plus it comes with the added bonus of majorly decluttering your home!
5. Unexpected income? Put it straight into the kitty. Don’t think, just do it!
6. Deal websites are not new news. If you haven’t jumped on the bandwagon yet, now’s the time. You can get dinners, outings, events, clothes, electrical goods etc at a massive fraction of the price. These can be a great option for special occasion dinners and birthday gifts. Try Groupon, Living Social or Catch of the Day.
7. Use hairdresser deals. We know you love your hairdresser. We all love our hairdressers. But unless you have an astoundingly intricate ‘do on your head, they're all gonna know how to cut and colour your hair, and finding a deal voucher online may literally save you hundreds. If the idea really stresses you out, look up customer reviews before buying to make sure other people have been happy with their work. It’ll be totally fine. Really.
8. If you’re planning a trip, do your research before you book ANYTHING. Join an airline reward points program and learn to obsess over it. Switch or sign up to a credit card offering a large amount of free airline points – that alone may cover the cost of your flight. Many of these cards waive the first year membership fee, so you can always cancel it before the year is out and still walk (or fly!) away with those points. Learn how many points you get when you use as certain card or shop at certain places. Investigate websites that affiliate with your airline partner. Sign up to email alerts for special deals that will earn you more points. Do the same thing for hotels and car hire – most reward programs are free to join, and you’ll be offered discounts or upgrades for a whole range of travel needs. Research, research, research.
Do you have your own tips to add to the list? We’d love to hear them!
Happy saving! X