Financing a dream trip can seem like a daunting and unachievable goal. For most, it’s a daydream that never comes to fruition. “I could never come up with that kind of money” is an excuse often used. Why not? People just like you do it all the time. For many of those wandering vagabonds, how to finance world travel is simply a matter of changing their outlook on expenses and redefining what it means to be “rich.” They have placed monetary worth in experience over materialistic items. In return, they are rewarded with unforgettable memories and an overall greater outlook on life. Once you get in that mindset you will clearly see that world travel is cheaper than you think. Change your outlook. Become rich with experience.
Obviously, everyone’s financial situation is different. The one common thing is that there is potential to save for all if you really want to. You just have to be committed to the idea of travel and what it can bring you. Once that is in place you can start making the necessary adjustments to make your dream trip a reality.
With that in mind here are 7 tips to finance world travel:
Budget – Start here.
OK so coming up with a travel budget is not necessarily a way to finance world travel however it is a necessary first step. Setting a budget for your trip is a way to determine how much money you need to save or have coming in while away. Look at the countries you are considering travelling to and find out an average daily allowance for each. Searching the Internet will reveal several sites to assist with this. Start a spreadsheet and populate it everywhere you anticipate and want to go. You will quickly notice that time spent in places like Western Europe and North America will cost a lot more than in Asia, and Central America. Going beyond your budget in the more expensive places will be balanced out by the cheaper places, pending the duration spent in each.
For example, let’s say you come up with an average of $50/day for your daily budget. This works out to $9,125 for 6 months of backpacking around the world. Most people will say that there is no way that I can save that kind of money to travel. Really? No way? I’m not saying it will be easy, but I am saying it is achievable. How exactly? Read on.
We live in a world of excess. If you make a list of where your monthly cash flow goes and split it into two columns, necessities and luxuries, you will quickly find that you can live without a lot of things. You may have to sacrifice but it is doable. Think about these cutbacks and savings tips:
Let’s say you go out with friends an average of 2 nights per week for diner and/or drinks. Lets say you spend an average of $40 per outing, which for many is a very low estimate. That comes to $4,160 a year. I’m not saying you need to go into complete hibernation but you seriously need to consider your choices. Again, it may not be easy for everyone. Think about this, one $40 night out at the pub can feed you for over 10 days in places like Vietnam and Nicaragua.
Entertainment savings can also be found at home. Discontinuing your TV cable can save you $720 a year your bill is $60 a month, which again is conservative. Most shows these days can be found online for free or cheap, which can ease the transition if this seems drastic. Utilize your new free time to learn and grow. Read, study, or plan your upcoming adventure. You will be amazed at the amount of time wasted watching television.
The world has become cell phone dependent. I am not saying to ditch your cell phone, especially if you have no other means of communication. I am saying consider downgrading your plan or moving to a pay as you go option. With the wide availability of free wireless Internet consider cutting your data plan. Sure you won’t be able to look up showtimes for your nearest movie theatre but you won’t be missing that luxury if you are cutting back on theatres anyway. With a national US average of around $50/month, there are savings to be had.
If you live in North America you may think that having a vehicle is a necessity but is it really? It is really more of an inconvenience not to have a car more than anything and with the rising cost of gas, you stand to save plenty. Selling your vehicle can save you big time with fuel, insurance, maintenance, and parking costs a thing of the past. Bike, walk and utilize public transportation or carpool with co-workers. Most major cities now offer car-sharing programs that work great. If going car-free is a complete no go for you try cutting back. Only drive during the week or on weekends. The savings will amaze you.
Consider downsizing or taking in a roommate if your place is big enough. Pending where you live the extra rent money will vary greatly but will be extra cash for short-term inconvenience. The potential is also there for your new roommate to take over your lease or rent your place in its entirety once you leave.
These are just a few examples that can go a long way if you let them. Just think short-term inconveniences for long-term achievements. Also, saving over a year is just an example. You can monetize it over a period based on your comfort level but consider this, the more you sacrifice now the more you save and the faster you can leave. Stretching it out too far can make it seem less achievable and thus harder to stay on track.
Plan to Save
You may have options to save beyond cutting out that daily latte. Take a look at your travel budget goal and your monthly income. Commit to setting aside what you can to achieve that goal. Even if you are not in the planning stages of an around-the-world tour but have the desire to travel someday, start saving now. Set aside what you can in a savings or tax-free account and don’t touch it. A friend of mine made this commitment with his wife after they got married. They decided to set aside a small percentage of their income each month specifically for future travel. Each year they take an extended trip that is consistently amazing. Point is, save what you can now.
Use a vacation loan for financing your trip
Travel loans are typically short-term loans that can be used to cover the cost of travel expenses like airfare, hotels, and tours. Before applying for one, create your trip budget and figure out how much money you’ll need to accomplish everything you want to do. Use that number to choose the amount of your loan.
Your work may also provide options for you to save. You may think that there is no way your employer will let you just take off for 6 months and let you come back. Not true. If it is a job you wish to return to then speak with your human resources department about leave without pay. A lot of companies are open to (or can be open to) the idea of personal needs leave or educational leave. Sell it as an opportunity to grow and learn. Some companies even offer programs that assist with this by setting aside portions of your pay for future leave. Obviously not every company is this open but worth looking into. It will not hurt to ask and will open the dialogue for eventually leaving.
Will Work for Travel
If you have downtime, taking a second job and committing all the income from it to your travel is a great way to save up. Working in retail or the restaurant industry evenings and weekends can be a great way to make extra cash. Even a couple of shifts a week can help greatly to finance world travel and more.
You can also look at working your way across the globe. Teaching English as a second language is a popular option for those looking to make money abroad. Most agencies will cover your accommodations while on contract and pay enough to let you save up for your next stop. I have also met others that have simply put up flyers in coffee shops and gone that route successfully. Working in pubs, restaurants, and hostels is also common ways to finance world travel. Be sure to look into work permits and visa requirements prior to departing on your backpacking trip.
Working remotely could be an option as well. It is becoming a bigger reality for many as day-to-day tasks move more and more online. I recommend reading The 4-Hour Work Week by Timothy Ferris. This short read dives into workplace productivity and sets out a plan to move your day-to-day life to automation and working remotely.
Then there is the digital nomad lifestyle. Have a soft skill you can share with the world? Chances are you can make money at it online. I am talking about digital design work, technical and non-technical writing, and becoming a virtual assistant. Selling photos online is another popular option and can help finance world travel by doing something you would be doing anyway. Now that is travelling smart.
Volunteer For Travel
Another popular option to finance world travel is volunteering your time and energy. How does doing something for free finance your trip you ask? It may seem backwards but most agencies and organizations will cover your accommodations and meals while away. There is a shocking amount of options to volunteer abroad. Everything from saving sea turtles to preserving hiking trails is available to you. There are also many humanitarian options like volunteering for the United Nations or lending a hand to those in need in poverty-stricken countries. Note, getting to your destination is not always covered so volunteering usually comes with a cost however it is a small one in comparison to the feeling you will get for giving back.
Become a Nomad
We have already touched on the excess that is deemed acceptable in our lives. Time to purge. Remember that your things are just that. Stuff. More often than not they are knickknacks that we hang on to without really knowing why. Let go. If you haven’t backpacked before you will soon learn how little you need to be happy. The 10 outfits you packed will quickly be whittled down to 2 or 3 as you find you don’t need them. In return, your back will thank you.
For items that you consider necessary, ask yourself if you will truly miss them and if they can be replaced when you return. Otherwise, you are paying to store them. Think long and hard about storing that worn-out couch. Chances are you can replace it with a cheaper or better one when you get back. Sever the emotional ties to material things. Sell what you can, and donate the rest.
Beg and Borrow
If you are truly not in a position to save and have exhausted your options to finance world travel you may have others to turn to for support. Your parents may not be thrilled with the idea of funding your adventures however if they are in the financial position to help then it doesn’t hurt to ask. Explain your situation. Explain you are going to grow. Have goals beyond travelling to help pay them back. Work out a payment plan if necessary.
If you do not have a family to assist with your financial needs consider a line of credit from a bank. If your credit is good you can obtain a loan with interest rates that are low and manageable. Currently, it makes more financial sense to use a line of credit to travel than be taxed on touching registered savings.
Then there is busking and begging as an albeit slow way to finance world travel. This is not for me but the option is out there.
As noted, you have several options to finance your around-the-world tour. Regardless of the path you take, you need to get over saying that travel is too expensive. It is clearly not if you are committed. Set your budget and start saving. Stop putting it off. The longer you wait, the farther away it will be. With a few adjustments here and there you will soon find that saving the funds to finance world travel is not as far-fetched as you think. Once away and spending wisely you will also notice that it really is cheaper than you think.
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Cover photo – Tax Credit via Flickr CC