Travel Fund: Step-by-Step Guide in Creating a Savings Plan [Extra Tips on How Much Money You'd Need]

It is hard to find a person with zero intentions of traveling the world. We are born curious creatures. We need to know what is out there. But going out there comes with a price. It is probably expensive, too. Is this enough reason to give up?

Photo by Michael Longmire

Absolutely not. Money should not stop you from traveling. If your heart is truly head over heels with wanderlust, show some spunk and figure out ways to produce a fund to sustain your trips. It is a challenging task but not an impossible one.

In this module, we talk about the money issue and discuss awesome hacks that will take you from your couch into the most spectacular destinations on the planet.

Steps in Creating a Savings Plan

Earlier, we talked about the importance of having a savings plan. Below are five steps to guide you in creating one for yourself:

Photo by Sharon McCutcheon

1. Assessment - Take a hard look at your financial capabilities and measure it against your initial travel goals. Be realistic. Do you think you have enough money to fund your travels or is another source of income necessary?

2. Set goals - Put up short-term and long-term financial travel goals. Begin with a targeted amount that will be enough to start your journey. Consequently, list a specific number that will sustain your traveling lifestyle. Do not hesitate to aim high. As long as you can visualize ways to make it happen, you are fine!

3. Create a savings plan - Identify specific ways on how you will accomplish your money goals. Do you plan on working while traveling? What unnecessary expenses will you eliminate? How much do you plan on spending every day?

4. Implementation - Take action on your plan and be diligent and disciplined to maintain it.

5. Monitor and reassess - Track your spending and budgeting. Over time, habits and income opportunities change. Adjust accordingly.

How much money do you need?

It is difficult to predict the exact amount of travel money that you will need. The reason is simple: everyone travels differently. Depending on your travel personality and what you like doing in new destinations, the cost can be anywhere from small potatoes to a small fortune.

To find out where you fit, answer the following questions to come up with a rough estimate of how much money you need to carry:

1. How long are you traveling?

Longer trips cost more than shorter ones but it does not mean long trips burn the budget quickly. In fact, longer stays in one destination are better for the budget since the cost of airfare is one of the biggest travel money drains. Accommodation tends to be cheaper too when you are staying for an extended period of time. But the best way to take care of your nest egg is to design a daily budget. More on this later.

2. Where are you going?

Destinations are not created equal. Some countries stretch your dollar really far while others choke the life out of it fast and easy. If you are on a budget, hit developing nations first. Go to India, Costa Rica, The Philippines, and so on. But if you have the cash, head to countries in Western Europe, New Zealand, Australia, or Dubai. 

3. How long are you staying in every destination?

The shorter you stay, the more you spend on transportation and accommodation. Transfers kill your budget quickly. If you are unfamiliar with the currency, you are likely to spend more, too. 

4. Can you sleep Spartan-style?

Shared dorms, hostels, and guesthouses are your best bet for budget accommodation. Where you sleep is but a tiny part of your trip. Choose to spend your money on attractions and activities! 

5. Where are you staying?

Prime addresses cost more. A single night in downtown accommodation may be equal to three nights in the suburbs. Consider where you are spending most of your time and compare the costs of shelter against transportation. 

6. Where do you want to eat?

Restaurant meals are not your friend. Opt for street food, markets, picnics, or cook yourself. Cheap eats does not mean horrible food. Often, the best local cuisine is found in hole-in-the-wall establishments. 

7. Is adventure travel your thing?

If you are heading to a destination for scuba diving, trekking, skiing, or safari, consider saving extra. These activities are expensive! Do your research to find the best providers, book in advance, and choose local if possible. 

8. How much land travel will you take?

Trains and buses are cheaper than flights; public transportation a lot friendlier than cabs or car rentals. But do not completely turn your back on flights. If you can find regional or low-cost domestic flights, all the better. There are budget carriers in every country so check your options and find the best deals.

Are you on Pinterest? Pin these!

READ OUR OTHER ARTICLES: