How We’re Saving for Our RTW

by design on December 8, 2010 · 21 comments

Brian and I aren’t rich.  We don’t have trust funds, inheritances, settlements or any other secret stash of money that would enable us to quit our jobs and gallivant around the world.  Nope, we saved for this the old-fashioned way: penny by penny for years and years.  By the time we leave for our trip in early 2012, we’ll have been saving for over two and a half years. 

How we save

Everyone has their own system, and what works for us won’t necessarily work for you.  We split our money into five different accounts and then automatically dole out money into those five accounts as soon as we get paid. 

Account #1 Retirement

We both have retirement funds set up through our employers and we also have individual money market accounts that we invest in.  The money goes to our investments pre-tax, so we don’t even miss it.  Granted, when we quit our jobs our investment in these accounts will be zilch, but at least we are saving for the future now while we can.

Account #2- Spending Money

Brian and I each have our own checking account for personal spending money.  We each put 27% of our paycheck into our personal accounts (this isn’t 27% of our combined income, but 27% of our individual take-home pay) .  We use this money on groceries, entertainment, and new purchases like running shoes.  

Account #3- Joint Checking (aka Bill Money)

Brian and I contribute 36% of our combined income to our joint checking account.  Our joint account pays the mortgage and all of our utilities as well as our sporting team fees (we both play soccer) and other large-ish expenditures like vet bills and doctor deductibles.  If we have money left over in this account when the next paycheck hits, we transfer it to our world travel fund.

Account # 4- Vacation Fund

Each month we contribute 6% of our combined income to our vacation fund.  This fund is different from our world travel fund and we use it to go on vacation right now!  Life is short, and we don’t want to miss out on all of the exciting adventures we can go on now with friends.  Plus, our families are in Ohio so we fly back fairly regularly and this fund pays for those trips.  Generally we use this money for small-ish trips like cabin rentals, ski lessons, or weekend adventures to the Oregon coast.  If we’re paying for a hotel or plane ticket it comes out of this account.  As we get closer to our RTW launch date, any leftover money in this account will go to our world travel fund. 

Account # 5- World Travel Fund

Finally (and this is the fun part) we contribute 32% of our take-home combined pay to our world travel fund.  Likewise, any extra money that comes in (Kim’s freelance writing gigs, birthday money, change we find on the street) all goes towards the world travel fund.  We save hundreds of dollars a year just collecting our loose change and depositing it in the bank. 

Cutting back and spending less

We’ve cancelled all of our magazine subscriptions, quit the gym and hike or run for exercise, sold our car (and the subsequent insurance), and cancelled the cable.  We pack our lunches, and bought a 750 square-foot house with a mortgage we could easily afford.  We buy everything in cash.  If we don’t have the cash we don’t spend the money, period.  We bike to work and drive only on the weekends.  Brian changes the oil in our car.  We fix or mend things whenever possible and we browse thrift stores and vintage shops for clothes.  Our TV antenna is made out of aluminum foil and a metal clothes hanger.  You get the point.  While many people have iphones and ipads and i-whatevers, we’ve stuck with the trusty laptop and ancient flip-phones.  We drive a 1995 Nissan Altima.  It was totaled in a rear-end collision, but Brian banged the bumper out and it’s good as new… almost.   

 Where we could do better

Our weaknesses are eating out and buying beer.  Bad, bad, bad!  But the beer in Oregon is so delicious and the food in Portland is amazing. 

We rarely use our credit cards and so we miss out on accumulating air miles, something we could obviously use.  We also aren’t currently enrolled in any frequent flyer programs.  We don’t have any of our money in high-yield savings accounts (do those even exist anymore?)

We still buy organic food.  And I still try to buy products like shampoo and conditioner that aren’t laden with evilness.  I just can’t let myself rub those chemicals into my scalp. 

We should probably ditch the vacation fund and just put that money towards our trip.  But I have such strong wanderlust that I fear I would sink into depression without even the possibility of mini-adventures while we are in planning and saving mode. 


{ 12 comments… read them below or add one }

Kieron December 9, 2010 at 2:22 am

Nice post – it’s good that you’re still putting money into retirement when a lot of others would just put it towards achieving their goals sooner. And you’ve definitely made some huge sacrifices to make your travel dreams come true which is great to see.

One way you could try and save even more would be to change Accounts #2 and #3 into Wants (personal spending money) and Needs (housing, food, etc). This will make you think more about whether you really need that new pair of shoes or whether it can wait.

I wouldn’t let what you listed under ‘where we could do better’ worry you too much, if you start sacrificing the little things you love then you’ll start to resent it and why you’re making these sacrifices in the first place. Life still has to be enjoyed over the next 12 months! Keep the vacation fund but whatever’s left over switch over towards the trip – you always need something to look forward to in the short term!


kimberlydinan December 9, 2010 at 7:41 am

Thanks Kieron. You are so right about Accounts #2 and #3. I find that I meticulously track our money, but there is that gray area in our personal spending money accounts where I know we could be doing better. Also, it’s nice to hear some postive encouragement about keeping the vacation fund (for now). I just think I would be so sad with it… even just knowing it’s there makes me happy.


Don Nadeau December 13, 2010 at 7:54 am

Great post with super valuable advice. So few people really think about how they are spending their money day to day.

Two things:

“We rarely use our credit cards and so we miss out on accumulating air miles, something we could obviously use.”

Have you checked every opportunity to use your frequent-flyer related credit cards, such as paying routine bills? And before you become unemployed, have you thoroughly looked into what credit card program is best for you in this area?

“We also aren’t currently enrolled in any frequent flyer programs.”

Forgive me, but I don’t understand. You are going to be earning boatloads of frequent flyer miles in just over a year, so why not start now to accumulate even more?

All the best.


kimberlydinan December 13, 2010 at 9:52 am

Don, great advice. I’ve never even considered looking for a credit card that would be best for me when I become unemployed (gulp). Do you have any tips regarding that?

We will enroll in some kind of frequent flyer program before we make our first big flight purchase for the trip. But you’re right, why not start now? I’m going to.



Don Nadeau December 13, 2010 at 11:11 am

I like cards that let you transfer miles into airline frequent flyer accounts on a dollar per mile basis, with periodic bonuses, instead of being tied solely to the issuing company’s program. Sign up bonuses vary hugely, so shop around. I will DM with some more information.

If possible, bring at least two credit cards on your trip, plus two debit ones, and do not keep these in one place. Have copies of both the front and back of these in secure online storage, as well as perhaps paper copies of one kept separately from your cards. See for motivation!

I suggest taking more than one credit card and debit card because the information strips on these become corrupt. Also, you may find that one or more of your American cards and debit cards do not have the security protocol required in some countries.

In my opinion, you should carry at least one card issued by a company with offices all over the world, such as American Express, Citibank, etc., even if this does not have the best terms. AMEX is wonderful in this regard. I also feel you should seriously consider having some sort of automatic payment set up for each credit card. Do not depend on mail or perhaps worse paying online from some cybercafe! You can set up emailed payment, balance, and international transaction alerts for your cards to make sure all’s well, without having to access card sites in insecure situations.

Hope this helps!


kimberlydinan December 13, 2010 at 9:43 pm

Don, thanks so much for this great advice. I’d never even considered that the magnetic strip could become corrupted. There is so much to consider! Also, very good advice about carrying a card with a company that has offices all over the world. I wouldn’t have thought of that either. Thanks!!!


Ryan - December 29, 2010 at 9:24 pm

Hey guys! Take a quick look at my most popular post to date called How We Saved Enough Money to Travel the World. It’s got a boat load of tips that may help you with your savings goals. Good luck with your trip!


April Thompson January 12, 2011 at 4:39 am

I’m so happy to see you save money for vacations now and are still enjoying life while preparing for the big trip! Keep it up. You will be at your travel goal in no time!


Kim January 12, 2011 at 7:29 am

@April, thanks! Sometimes it does seem like it’s a million miles away but I know that it will get here quickly. All good things are worth the wait. And, yes, the vacation fund is VERY important to me right now. I love knowing that I can still take little trips and have mini adventures.


Carmel May 16, 2011 at 10:08 am

Glad to see that you’re still buying organic and products you believe in. We primarily shop at New Seasons and while I know we could probably spend a little less if we switched to Fred Meyer, I just can’t do it. It’s too important to us. And I’m the same way with the mini vacations, food and beer. I HAVE to have some excitement in my daily life or I’d go crazy. Not quite to the getting rid of the car thing yet, but we only have one and I try my best to take the bus most of the week (with my free pass from work). This is truly inspiring…thank you!
Carmel recently posted..Mothers Day Dinner


Kim May 16, 2011 at 6:39 pm

God I love New Seasons though I do sometimes feel as I’ve been robbed when I walk out of there. It’s like, i bought three items, how did it cost $60?!?! But just the same I can’t give my dollar to Fred Meyer and I can’t buy crap food and evil chemical products. Glad the post was inspirational!


Ryan September 26, 2011 at 8:29 pm

Great post! I especially like the amount of detail and information you provide for your readers. I will take great interest in following your future posts.


Leave a Comment

CommentLuv badge

{ 9 trackbacks }