Ready to save money? Last year I traveled to eight different countries on three different continents. I didn't have a fancy job making lots of money. I was a student working part time. Paying rent, groceries, tuition, and all my other bills. So how did I manage to do so much travelling? Over time I've found ways to cut down on day to day expenses. This has allowed me to save more, and as a result travel more. Think you can't afford to travel or want to travel more? These tips on saving money will have you filling up your piggy bank and one step closer to your next trip!
In order to save money you need to start cutting out many of the extra things you don't need. What did I do when I wanted to buy something? Or when I got a call from work asking me to work an extra shift when I didn't want to? I imagined myself lying on a beach in Australia and used that as my motivation to say no to the purchase and yes to my boss.
Have a clear picture of what you want. Whether it's a two month trip around Asia, a dream wedding, or a new car. Imagine how great it will feel to have that thing and use that as your motivation. Clearly imagine what you want and keep a mental image of it. Before you buy something, close your eyes and remember your motivation to save.
You will constantly be faced with temptations to buy things and to spend money. You will constantly need to ask yourself, is this really something I need to buy? After six years of being a student, and still managing to travel to over 30 countries from the money I had saved, I've come up with some strategies to save money.
If you can earn money while travelling then that's great! If not, you will need to focus on saving ahead of your trip.
1. Keep track of what you buy
You would be surprised by how much money you actually spend in a month. A dollar here, a dollar there. It all adds up. By keeping track of how much you spend, and what you spend it on, you will be able to see exactly what your money is going towards and where you can cut back. Last year I kept a spread sheet on excel where I put down every penny I spent and what I spent it on. I found that extremely helpful with staying on budget.
Challenge: At the end of every day, for one month, write down what you bought and how much you spent. Just buy things as you normally would. The next month, do the same thing, only this time be more conscious of what you buy. Try to cut down on extras by following the below steps. You'll be surprised by how much you can save by cutting down on small things and extras. By writing everything down you will feel more accountable for what you spend. You'll know exactly how much you've spent so far in the month, what you spent it on, and how much you have left to spend.
2. Set a budget
How much do you make and how much do you want to save? Set a monthly budget. A maximum amount that you don't want to spend over. If you go over your budget one month, because of some unexpected necessary cost, try to spend less the following month. Set up your expenditures excel so that you have the total amount spent (add up all you purchases) and the total remaining amount (budget - $ spent).
3. Define I need versus I want
Most things that you buy are things that you want and not things that you need. You don't need another shirt. Don't need to go out for dinner. You don't need a coffee. Stop saying you need things that you don't. You would be surprised what you can live without. So next time you buy something think Do I really need this? Can I survive without it?
4. Cut discretionary expense
This is money that you choose to spend. Extras like money for movies or having pizza with friends. Some of the discretionary expenses that you might encounter every day are:
Coffee: Cups of coffee add up quick. Instead of buying coffee try making one in the morning before going to work, or if your job has a coffee pot in the kitchen wait till you get to work to make a cup.
Cigarettes: If you smoke try to cut down or quit as smokes can be a huge strain on your wallet. At 10$ a carton, even at two cartons a week, you're smoking away $1,040 a year.
Alcohol: Alcohol is expensive and if you are someone who goes out and drinks regularly then it can quickly add up to a large expense. Try drinking at home, ordering less drinks than you normally would, or opt for non alcoholic drinks instead. If you go out with friends for drinks, bring 10$ and decide not to spend more than that. Yes, I know you can't get a lot of booze with 10$. Drink slowly.
Lottery tickets: Lottery tickets are another expensive and non essential product that add up quickly. Cut down on how many tickets you buy and how often. After all, you only need one ticket to win.
5. Turn a mundane purchase into a treat
I'm not saying that you should completely cut out all the things you love and go cold turkey on shopping. What I am saying, is that you should cut down on these purchases. For example, if you normally buy a coffee every morning, instead only buy a coffee once a week. Say on Fridays to celebrate the end of the week. If you buy a coffee every day, then it's nothing special. If you buy a coffee once a week, then it will feel like you are treating yourself, and it will taste that much better.
6. Cut Impulse Buys
An impulse buy is anything you don't plan on buying but then decide to buy at the last minute. This is how you end up spending more money than you expected. Impulse buys include things like chocolate bars, gum, and magazines. Don't buy anything on impulse. Think about all your potential purchases and if it's really something you need. If you're not 100% sure about a purchase then don't buy it. If you're still thinking about it two days later, then you can consider buying it, but chances are that you will have completely forgotten about it.
7. Find the Best Deal
Whenever I buy something, I always think Is this the best deal I can get? Shop around and look for the best prices, don't just buy the first thing you see.
8. Find substitute products and brands
Thanks to the power of marketing, people are willing to pay more for a product simply because of the brand. One way to save money, without having to give up buying the things that make you happy, is either to buy a different brand of product or to find a substitute product. Back to coffee, let's say you normally buy a coffee at Starbucks. If you can get a coffee for less money, say at McDonalds, then start buying your coffee at McDonalds. If you buy brand name foods, start replacing them with cheaper no name products. If public transport is cheaper then driving or taking a taxi then start taking public transport.
9. Shop second hand
Growing up, my mom used to buy all of her clothing second hand and it drove me crazy. I thought it was weird to wear used clothing. Once I got off my high horse I realized that there's nothing wrong with buying things second hand. You can get some seriously sweet deals.
You can get some great products at second hand stores for a fraction of the price. Now I buy almost all my clothing second hand for a fraction of the price that I would find it at a mall. This way I still get to buy myself something extra without having to feel guilty about spending the money. You can find more than just clothing at second hand stores. I found a brand new pair of roller-blades for 12$ last summer!
10. Eat out less
Eating out can be expensive and cutting down on this is a great way to save money. Try cooking at home instead. If you don't feel like cooking then throw something in the oven or microwave for a quick and cheap meal.
Eating out tip: When I do eat out, I most often just stick to buying an appetizer. This way, I can still enjoy going out to a restaurant with my friends, but I am only spending 10$ or less on my meal by choosing an appetizer instead of a main meal. I usually just order water as well, which you can get for free at most restaurants.
Have a dinner party instead of going to a restaurant: When I was a student, I would meet every Sunday evening with a group of friends and we would have a pot luck. We would each make a part of a meal (dessert, main, salad, soup). We would always have a great time together and it was cheaper than going out to a restaurant every week.
11. Buy food that's on sale
Grocery stores that try to get rid of food that is approaching the expiry date will do so my marking them down to as much as 50%. Every time I go grocery shopping I check to see what food is on sale. Food is something that you need to live but it can be very expensive. Finding a good deal on it can save a lot of money. If you normally buy one brand of orange juice but another brand is on sale, then buy the brand that is on sale. If you were planning on eating pork for dinner but you see that chicken is on sale, then have chicken and eat pork some other time when it goes on sale.
12. Don't buy more than you can eat
Are your eyes bigger than you stomach? Many times people buy more than they can eat which means that food goes uneaten, it goes bad, and it gets thrown out. Throwing out food is like throwing out money. If you buy in bulk because it's cheaper then freeze the extra so that it won't go bad before you have a chance to eat it.
There are lots of other ways you can save money but it the end it all comes down to thinking carefully before making each purchase. Keep track of what you are spending and make a conscious effort to cut costs where possible. You will have to give up some short term pleasures but if you want to travel more and sooner then you will have to make sacrifices in some areas. It's all about how much you are willing to give up in the short run in order to benefit in the long run and take that trip you've been dreaming about.
Your money spending and saving habits won't change over night. It's a process. Just like with anything the more you do it, the more comfortable and confident you will become with it.
As your bank account grows it will motivate and inspire you. Before you know if you'll be one your next trip.
Have some money saving tips? Let me know in the comments your tips to save money.