Saving for travel by tricking yourself with reverse budgeting.

So you’ve made travel a financial priority. You follow all the travel budget guides and blogs and you created a travel fund to keep track of your travel savings and expenses. Every pay period you automatically and faithfully save a specific amount of money for upcoming trips. You even stopped buying premium coffee. Maybe you cancelled your gym membership or picked up a part-time gig to bring in some extra cash. Friends…what friends? Yeah, eating out is a thing of the past. Do any of these sound familiar? If so, I commend you. Saving for travel (or saving in general) is a lot of hard work. For most of us who do not have a ton of disposable income, saving for travel requires making sacrifices.

 

What is Saving Really?

When you save you give up spending money today and in return, you can afford to spend tomorrow.

If you’ve read stories about how people saved money to travel the world, they often talk about changing their lifestyle. In so many words, they are referring to making sacrifices to pursue their travel dreams. 

Some people sacrifice their time while others sacrifice their money and financial freedom. In “A Week in Iceland on $100 USD”, Natasha Alden mentions that she waited tables at a restaurant for a year to fund her 8-month trip around Europe. I also know a couple that sold their luxury cars to backpack around Southeast Asia.

Unless you are wealthy, you will likely have to give up something to afford to save for travel. And as a financially savvy traveler, this is a mere fact of life which I’ve come to terms with.

 

Saving For Travel With Reverse Budgeting

A few months ago a big travel opportunity presented itself.

My significant other (at the time) was relocating to England for a new job. This was my chance to quit my job, get married, become a full-time travel blogger and travel indefinitely. But here’s the thing, with only a few months to plan for such a drastic life change, I didn’t have that kind of money lying around. At the time I was working on paying off my student loan debt and saving for a house and I had very little savings.

Truthfully, I almost gave up on the idea but when there’s a will, there’s a way.

 

Related: First-Time Home Buyer Tips For Buying a House

 

When I thought that I couldn’t possibly save another penny, I started tricking myself into saving more money for travel by what I call, “reverse budgeting”. Through reverse budgeting, I started saving what I did not spend.

To drive this concept home, here are a few examples:

So let’s say, you’re walking by Starbucks (it’s pumpkin spice season) and you’re craving a latte. If you choose against it, immediately pull out your bank app and transfer that $5 into your travel fund or savings account.

Did you walk instead of taking the train? That’s savings into your travel fund.

If you saved 10% (or $3.99) with a coupon code, transfer those savings!

This also goes in line with other common frugal practices like ditching cable, canceling magazine subscriptions and cooking at home. But if you’re aren’t tracking these savings, you’ll spend them elsewhere which is what we’re tying to avoid. Transfer those saving immediately to your travel fund.

 

Reverse Budgeting Mindset

Consciousness

Reverse budgeting requires being conscious and having the financial discipline to immediately transfer money into your travel fund. This isn’t an automatic approach to saving. On the contrary, it’s manual. With reverse budgeting, you’ll have to manually transfer funds to your savings account.

Even though reverse budgeting is a tedious task, it’s worth the inconvenience because you’ll discover that you can afford to save a little more money by tracking those unspent funds.

How I do it: Every time I reverse budget, I include “reverse budgeting” in the transaction description. Then at the end of the month I search by the reverse budget tag and add up all the transactions to see how much I saved.

 

Reverse Budgeting in Action

Last month, I saved an extra $232 towards travel by reverse budgeting. This is in addition to my automatic travel savings! I would have never noticed these unspent funds if I did not put it away immediately.

So now I’m a lot closer to pursuing my big trip. And I don’t mind the savings trickery because hey, it’s getting the job done.

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50 replies
  1. Darlene M says:

    I’m not rich so I really save a lot for my travels. What works best for me is having different budget for different purposes, like travel, daily expenses, investment, etc. i know some people who regularly puts money into their travel fund everyday. Works for them!

    Reply
  2. Laura Lynch says:

    I don’t know if that would work for me – putting away the money that I would have spent if I chose not to spend it – but it definitely works for me to set up an automatic transfer from my paycheck that goes into my travel fund and I just never see that money in my regular bank account, so it’s not there to spend. It becomes pretty easy to live on less when you don’t even know it’s there.

    Reply
  3. Anda @ Travel Notes & Beyond says:

    I like the idea of saving money even if it’s not necessarily for travel. But when you set up a goal, when there is something in sight –like a beautiful travel– it makes it easier to make daily sacrifices. However, when I travel I like to have a little extra money for unforeseen events. Even if I have to do a trip on a tight budget, I want to be backed up by some money, just in case.

    Reply
  4. Economical Excursionsist says:

    So many people just don’t understand that travel IS financially possible if only you make it a priority. However, it’s those ppl who refuse to give up their daily mochas who swear they just can’t afford to see the world. HOGWASH!

    Reply
  5. Kerri McConnel says:

    Great idea and a nice change to some of the usual “how to save money” articles. I think even just as a general rule making a deposit into your travel fund everyday would be a great habit as there is probably so much that is spent on a daily basis that goes unnoticed.

    Reply
    • Danielle Desir says:

      Capturing those unnoticed funds has really helped in saving for travel and it’s made a big difference. I can finally go on those spontaneous trips or bigger/longer trips next year.

      Reply
  6. Arzo Travels says:

    Oh yes, money and traveling is always an issue (for me) I do try to save as well, it is not always easy and when I travel I cannot always do what I would like to do. But this would never stop me from traveling (luckily, I do not like Starbucks coffee, but I appreciate other good things, haha)

    Reply
    • Danielle Desir says:

      Oh you are so lucky! I’ve limited Starbucks to only Fridays, it’s a way of rewarding myself for getting through the week. You mentioned when you travel you can’t always do what you like, are you referring to limitations because of your budget?

      Reply
  7. R.a.W | Ramble and Wander says:

    Great tips! I like the idea of reverse budgeting! That way you can see what you’ve saved for real, rather than just feeling that you’ve saved your money from spending on something but of which the money is used for something else later. I guess it’d be hard a bit at the beginning to keep track of everything before it can become a habit though.

    Reply
  8. Robert Doyle says:

    Wow, I really like the idea of reverse budgeting. Makes complete sense and such a simple idea! Thanks for the post 🙂

    Reply
  9. Caribbean Blue says:

    Thanks for the great travel tip! It is a helpful new way of being rewarded for sacrifices we make in the moment and save to fulfill our travel goals for the future!

    Reply
  10. Travelerette says:

    That’s really smart! I often have a hard time resisting buying small purchases like fashion magazines, but if I put the money in my travel account, I will be more likely to resist next time.

    Reply
  11. Sahara says:

    Love this idea! I actually automate my savings because I don’t trust myself to transfer manually. I have gotten really aggressive and actually auto-transfer $100 every Friday!?

    Reply
    • Sahara says:

      I wasn’t thinking about doing manual on top of automating. I think I will challenge myself to do that this week! Next stop: I am headed to Salt Lake City! What about you?

      Reply
      • Danielle Desir says:

        I do both automatic and manual when I save on some thing throughout the week. I saved $232 extra last month by doing manual. That’s a possible flight! Iceland actually 🙂

  12. Jamporter says:

    I love this idea! The immediacy of the savings almost works like a reward, like good job on avoiding Starbucks, here’s 5$. Brilliant!

    Reply
  13. Miki says:

    I like this idea! I used to keep track of every spend throughout the day and if you want something that badly, I think it’s worth the effort! 🙂 I pull a percentage aside for travel and over 95% of the time only fly on a good flight sale.

    Xo,
    Miki
    http://mikialamode.com

    Reply
  14. Terri Huggins says:

    I swear by this method. i haven’t applied it to traveling though. I do use this method for paying down student debt. I also round up purchases to the nearest dollar and put that in savings. So if a slice of pizza cost $1.60, I put 40 cents away in savings. It’s not a lot but it adds up quickly.

    Reply
  15. Stephanie Raley says:

    This is a really good tip! When the money mounts up it must be incredibly motivating and spur you on to save more!

    Reply
  16. Live Learn Venture says:

    This is a great idea. I am OCD about money, so I love to save — but sometimes it’s tempting to spend money when you get a craving or see something that you really want!! 🙂

    Reply
    • Danielle Desir says:

      As long as what you are saving for is more important to you than what you are craving right now I think it’s important to save. But, I also think that satisfying the now is important too.

      Reply
  17. Ulli Tomczyk says:

    Awesome! I’m going to start with your methods immediatelly 😀 You seem to be a very experienced person and I think it’s a big quiality as you are a travel blogger. I think I’m going to follow your blog since now 😀

    Reply
  18. Untold Morsels says:

    Ah well done! That’s a great idea. Every little bit helps doesn’t it? All these habits will stand you in good stead for the rest of your life. Happy travels!

    Reply
  19. Maria says:

    I love when people offer practical information about the money part of travelling. congrats! I love it:) Since I started travelling my spending patterns have changed a lot

    Reply
  20. Sarah says:

    Loving this idea! I often ‘save’ money by walking somewhere or choosing a cheaper drink etc but I never really notice the benefit because I’m not actually putting the money aside. I’m now going to open another savings account just for this. Thanks!

    Reply
  21. Hung Thai says:

    Perfect! that’s exactly how you have to do it. I have several automatic drafts that take my money and put them elsewhere per paycheck – like I never had the money; so I don’t worry about it and suddenly there’s enough for a trip! Yahoo!

    Reply
  22. Chantell Collins says:

    This is such a great idea! I completely agree that saving takes sacrifice. For a lot of people, they need to start small and work up to it. Also it depends on how much they are willing to give up in order to put that money towards travel. Over years, I have become super frugal e.g. I haven’t bought a new phone since 2011 (instead taking old phones as gifts over the years) and I only just bought a new laptop (less than $500) after like 7+ years of using the same one. I love your idea because anyone can do it and they will feel instantly rewarded for their sacrifice!

    Reply
    • Danielle Desir says:

      Hi Chantell, you made a great point. An instant reward for your sacrifice is exactly how I feel everytime I watch my travel fund grow. Saving for travel doesn’t happen overnight but make those sacrifices count by pursuing the things you love.

      Reply

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