How early should you begin saving before traveling long-term? How much should you have as a “safety net” in order to feel secure abroad? How will your monthly cost of living change in your new destination?
Planning out your budget for a trip can be overwhelming but getting your finances in order will save you a lot of stress while you are trying to enjoy your time away. With a bit of research and saving, you can answer these questions and feel prepared for your trip.
The amount that you save and determining your budget are largely determined by where you are traveling to and how you plan to live while you are there. Check out the cost of living in your destination country and be realistic about what activities you plan to do, where you will be staying, how you will be eating, etc. A good site to check out the cost of living is Nomadlist. Consider if you will be working remotely or completely taking time off.
How can you save before you leave?
Below are some helpful strategies that will bring your next trip closer than you think.
- Automate your savings. Take the thought out of whether you will put money aside each week or how much. Apps such as Acorns will do this for you, weekly, bi-weekly, or however, you choose and for the amount you choose. You can also add round-ups to each debit and credit card purchase to increase your balance. It’s a pain-free way to elevate your savings by barely noticing a change in your accounts.
- Dedicate a side hustle to travel. Side hustles are a hot topic for unhappy employees to eventually leave their 9-5. But they can also be a great way to save for a specific purpose quickly. Maybe bartending a few nights a week doesn’t sound like the most fun, but if it meant you could afford the trip of your dreams? You might consider it. You can pick up a part-time job for a few months, drive for Uber, rent out your car on Turo, and take up some weekends dog-sitting on Rover. If you’re looking for more flexible, online income there are lots of freelance platforms that you can work on anytime.
- Sublease or rent out your space. If you’re traveling long-term and your place will be empty, why not have the expense of your home covered while you are away? Depending on where you live, you could rent it out monthly or short-term if you are in a popular travel destination.
- Start budgeting now. Get used to planning out your finances before you’re living abroad. Reflect on where your money is being spent and where you can save. Cutting back on dinners out, concerts, pricey gym memberships, and more in the months leading up to your trip can add up quickly.
- Sell your stuff. This one is obvious but can be extremely helpful. Evaluate your belongings and what you actually use. Did you buy an expensive mountain bike years ago that you used once? What else can you let go of and not disrupt your lifestyle?
- A good rule of thumb for calculating your safety net of savings is 3 months of living expenses, and you should also factor in what it would cost to fly home.
Feeling secure in your finances while you are traveling will put you in the headspace to fully enjoy your trip – something you cannot put a price tag on. For more finance tips while you are traveling check out our article “5 Helpful Finance Tips to Remember When Living Abroad”.