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.
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
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.