Saving to travel the world: one year later and *bonus* money saving tips anyone can use

by Kim on January 3, 2012 · 39 comments

It’s no secret that Brian and I have been saving money forever towards our epic quest to travel the world.  In fact, this time last year I wrote a 2010 year-end savings status in which I chronicled our money savings efforts throughout the year.  At that time, we’d saved almost 56% of our $60,000 savings goal.

So, what does our savings status look like one year later?

Well, we had a crazy year financially, mostly because we sold our house at a loss and ponied up $10,819 at the close of the sale.  That set our savings back a bit and we watched our original departure date of January 2012 slip away.  We needed more time to save to make up for the loss.

Once we sold our house, though, we moved into an apartment where rent is $500 less per month than what our mortgage was.  That extra money went straight into our savings account of course.  Then Brian got promoted, and that additional money also went straight into savings.

All of the things I wrote in my post one year ago are still true.  My biggest thrill is still transferring money into our savings account.  I still make up various savings scenarios in my head and then calculate what we’d need to save in a given month to make them come true.  You could say that saving money is a bit of an obsession of mine. That’s because traveling the world is my dream and I know the easiest way to make my dream come true is to save, save, save.

Here’s our savings status after two full years of saving money:

As of January 1, 2011 Brian and I had saved 56% of our savings goal.

As of January 1, 2012, we’ve saved (drum roll please….) 91.09%  of our savings goal, even with the hit we took on our house.  Yay!!

We’re on track to meet our $60,000 savings goal by the end of February.  Since we’re not leaving until mid-May, it looks like we’ll actually save more than our goal.  In fact, we’ve set a new goal of $70,000 which we should be able to meet with a little hard work.

I know that saving $20,000 or $30,000 a year isn’t realistic for everyone.  Saving money is hard work, whether you’re able to put away $2,000 or $20.  So, below are a few things I’ve learned about saving money no matter your savings goal.

*Bonus* Money Saving Tips Anyone Can Use

Tip 1: Know what you’re saving for.

Brian and I didn’t get serious about saving until we clearly identified our goal: quitting our jobs to travel the world.  Once we had that end-goal in mind saving became much easier.

You can’t reach your destination if you don’t know where you’re going so identify in detail what you want to do.  Whether it’s buying a home, remodeling your kitchen, saving for your child’s education, or traveling the world, once you know what you’re saving for saving becomes a lot easier.  

Tip 2: Set baby-step goals.

When we set a savings goal of $60,000 it seems like an impossible number (at the time we had about $9,000 in our savings account).  In order to make our goal more palpable, I created a savings spreadsheet in Excel.  I put our savings goal in big, bold numbers at the very top and then, next to that number, I auto-populated a cell with our percentage saved.  Each time we saved money, even $10, the cell would update and show the % we’d saved towards our goal.  Sometimes the number would only go up 0.01% but watching our progress in percentages made every dollar saved feel like a little victory.  Baby steps count and they’ll eventually take you very far.

Tip 3: Do not remove money from your savings account.  Ever. Instead, create an “oh shit” fund.

The money that Brian and I have in our savings account is untouchable.  We haven’t removed a single cent of it since we started saving.  If we’d considered that money accessible to spend on plane tickets or new shoes we’d never have reached our goal.  Put money in your savings account and do not take it out.  

For minor emergencies like car repair or unexpected medical bills (which we had this year when Brian broke his collarbone) we created an “oh shit” account.  We put $200 a month in this account.  Sometimes we need to use the money and sometimes we don’t.  The important thing is that we have a very small well of money to draw from when we need it and that prevents us from dipping into our savings account when we need cash.  For the record, we have done this for years, even when we made little more than minimum wage.  Back then, it was a way to avoid using our credit cards, and it worked.  

Tip 4: Save the small stuff

Grandma sends you a $10 check?  Save it.  You find a $20 bill on the ground?  Save it.  Save your raise, your change, and the $3 left in your bank account before payday.  It adds up, I swear.

Tip 5: Sorry, but you can’t do everything you want to do and save a bunch of money

We didn’t go home for Christmas this year because plane tickets were through the roof and we didn’t travel to our favorite home-away-from-home to celebrate New Year’s with our friends because we couldn’t justify the expense.  There’s no sugar-coating it, it sucked to miss those things.  

Saving a lot of money takes sacrifice.  You might not be able to get the new iPhone.  You might have to wear your old scuffed up shoes instead of buying new ones.  So what?  In the end it’s those sacrifices that allow you to save the money needed to recognize your dream.  

It’s about priorities so put your dream your first.

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{ 38 comments… read them below or add one }

The World of Deej January 3, 2012 at 6:01 pm

Thats awesome…Congrats on being so close to your goal!

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Kim January 3, 2012 at 7:35 pm

Thank you! So close I can taste it!!

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Kerri January 3, 2012 at 6:46 pm

Spot on!

I have the same obsession with saving money, and we also have an “oh shit” account. I’m going to rename ours, however, because your name is much more appropriate.

People look at us like we’re nuts when we tell them we haven’t owned a tv for 6 years (therefore, no cable bills) and don’t own i-anythings.

The sacrifices are HUGE and it’s a drag for our friends when we turn down social events because of the costs involved.

But our freedom to live as we want is priceless! I’m looking forward to following your journey!

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Kim January 3, 2012 at 7:36 pm

Yes, the sacrifices really are pretty big. It sucks for us and it sucks for those around us who probably wonder why we’re always asking “how much does it cost” before agreeing to do anything. But, it will all be worth it someday. And, really, life with these sacrifices is still really nice.

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Carmel January 3, 2012 at 6:58 pm

I’m so glad you posted this. When I decided that I wanted to save up $35,000 for a down payment on a house, I found myself losing inspiration on a regular basis. Once we decided to save for a trip, things became a little easier. Not easy, by any means, but easier. It helps me get out of bed in the morning even though all I want to do is call in sick. I keep thinking about those PTO days I might get to cash in eventually (not that I won’t be using most of them…). But we just had a big talk about the sacrifices, because we keep going just a little over our budget. That little bit ends up counting big time. So, the trips are slowing down, the dinners out, the bottles of good wine…the hard part for us is that we get a MUCH better interest rate on our checking account, so we can’t physically move it. Guess we just need a little more discipline!

Helps to get a little inspiration from friends who are getting it done now, though. :)

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Kim January 3, 2012 at 7:38 pm

Oh, that is a challenge to have your savings in your checking account… so easy to access. But, as long as you know not to touch it you won’t.

Carmel, you guys are already very disciplined. You paid off all of your credit cards!!! You should be proud of that and relish in that accomplishment too. Not saying that you can’t tighten up just saying that you ARE already doing a great job :)

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daniel January 3, 2012 at 7:29 pm

Quick question: Are you saving for things as well (namely retirement 401k, IRA, etc)? Just curious if you’re keeping that up while focusing on the short term goals.

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Kim January 3, 2012 at 7:41 pm

Daniel, good question.

I was contributing towards my employer’s version of 401k until about three months ago. That was when I opened my statement and realized that I’d not only lost all the money I’d invested in the past quarter but also a couple grand extra. So I cancelled my contribution. What’s there is there and it will ride out the market but I just couldn’t stand to put my hard earned money down a black hole. I know that that isn’t proper investing strategy but that’s what I decided to do and I’m happy to do it.

I also work for the public sector so am a part of that retirement system. I’m “vested” and so will have a pension when I retire (though the more I work and the more money I make the bigger it will be). I don’t do anything to actively invest in that, but it is there.

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Kim January 3, 2012 at 7:44 pm

Also, when we first started thinking about doing this retirement was one of the things that totally freaked me out. I was worried that we were screwing up our futures and our chance at ever retiring. However, the more I thought of it the more I realized that I wanted to live now because who knows what the future holds. It might mean we have to work longer when we are older, but that’s a sacrifice I’m willing to make to live this dream now.

Retirement was a huge mental hurdle I had to jump to move on with this plan of quitting and traveling. But I jumped it and I gotta say I don’t stress out about it anymore (maybe I’m fooling myself, but I don’t think so).

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daniel January 4, 2012 at 8:16 am

Thanks. I appreciate you candor in discussing the financial topics. You’re one of the few blogs we’ve found that has a similar budget to our own (we finished saving 60k in November) so your posts have been especially helpful.

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Kim January 4, 2012 at 6:02 pm

Daniel,

Congrats on reaching your goal!!! Have you left on your travels yet? I’m glad my candor has been helpful. It’s uncomfortable to talk about money but I think it’s so important to be transparent so that others aiming to do the same thing can learn from our experiences.

Daniel January 11, 2012 at 8:34 pm

Nope, we’re waiting for our house to sell. It has been listed for a couple month now. As soon as it sells, we’re ready to go.

Unfortunately, we’ll need to bring 20-30k to the table depending on where wetland interns of sale price.

Sarah January 3, 2012 at 8:02 pm

I think having an “oh shit” fund is an absolutely brilliant idea. I was doing the same thing except with the not-so-clever “emergency fund” title.

Dipping into the emergency fund for you know, emergencies just seemed so much better than stealing away from my travel fund when I had to pay for new contacts.

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Kim January 4, 2012 at 5:55 pm

Exactly. That’s what the emergency oh shit fund is all about!! PS, why do contacts cost so much?!?

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tunimaal January 3, 2012 at 9:03 pm

Awesome guys. Wish you all the best for that next trip coming. You are doing great in your savings… GANBATE KUDASAI (means GO FOR IT in Japanese)

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Kim January 4, 2012 at 5:56 pm

Yay, I love it!! GANBATE KUNDASAI- we definitely are. Thanks for your kind words :)

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Christine January 3, 2012 at 11:27 pm

Love the idea of the “oh shit” fund. I pretty much NEVER touch my savings account but it would be nice to have a spare account for repairs/etc!

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Kim January 4, 2012 at 5:57 pm

Yes, and even a small amount invested in the oh shit fund adds up over time. There are months and months when you don’t need to use it but then something happens and you need $500 bucks and BAM there it is just hanging out in the oh shit fund. No stress involved.

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Miel January 4, 2012 at 7:16 am

Hi Kim,

Couldn’t agree more with your post, and congrats for making it happen!

I also want to expand on your comment of sweeping out your money before payday, this can be huge! I did this when I was trying to pay off my credit card debt, which I managed in a year and then went on to buy our first place shortly after.

In short, I got paid every two weeks, so mid-way between paychecks, I would budget out for one week. Most of the time you can know realistically what is in your fridge, if there are any unexpected needs, what your social plans are, etc. I would determine what this was, keep it in my checking, and then remove anything else to pay off cards.

You’d be amazed how little you can live on if forced (try going to the grocery store with cash). And, you don’t even miss it. It felt so good to be saving so much more than I was spending.

Plus, you’ll appreciate it on the road. I’ve started my travels on a real budget (like $200 to last me a summer) and while it is romantic to travel on a dime, it is really nice to have the flexibility. I still dream of the splurging hotel in La Paz that we couldn’t afford for $20!

Enjoy!

Miel

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Kim January 4, 2012 at 6:01 pm

Miel, this is great advice. I especially love your point about trying the grocery store with cash. I know that every time I go into the grocery store and only have cash I am much more conscious of what I buy. The grocery is actually a place where I still waste a lot of money as I just sometimes buy without thinking or planning ahead on my meals.

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Debbie Beardsley @ European Travelista January 4, 2012 at 10:33 am

Saving is and that is probably the biggest reason people don’t do enough of it! You are an inspiration for anyone with a dream. Absolutely love your idea of an “oh shit fund”! Cracked me up but its a great idea.

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Kim January 4, 2012 at 6:03 pm

Thanks Debbie :)

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Hannah January 4, 2012 at 4:10 pm

Epic stuff Kim, congratulations! I am just like you when it comes to saving and have been totally obsessed with trying to reach our savings goal (also $60K) for our September deadline. Your tips are 100% effective and I am so excited to see how you and Brian are going to spend all that hard earned cash RTW!

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Kim January 4, 2012 at 6:08 pm

Thanks Hannah. You are a savings inspiration actually with your story of working 80-100 hours a week to pay off your debt and start saving for your trip around the world, it’s quite unreal. I can only imagine how much I could save if I was working 100 hours a week. Then again, I don’t think I would last more than a week working that much. Anyway, thanks for the kind words but you are really the one that deserves to be applauded.

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Alex January 5, 2012 at 12:16 pm

Hi Kim, I am Alex from Brazil. I am just having so much fun reading your blog that I can’t wait to follow your adventures around the world.
Whenever you guys are around this part of world, just drop a line and I will be glad to show you around or provide some local tips.
You’re almost there, take care

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Kim January 6, 2012 at 9:43 am

Hi Alex! Thank you so much for your excitement and kind words. I will make sure to email you when we are in Brazil. I don’t know if we’ll make it here when we are in SA at the end of this year because I REALLY want to visit during the World Cup (a dream of mine!). But who knows? Thank you and Happy New Year. :)

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Sarah January 6, 2012 at 7:19 am

Hi Kim, great tips here, the real nuts and bolts of saving money! It really is in the little things! When we decided we were going to travel long term, so many things like meals out, gym memberships, hair appointments etc just became so glaringly excessive. I love having a goal that makes everything else pale in comparison ( probably due to my obsessive nature). Not working for at least a year and having the freedom to explore the world will be all the more sweet. I can’t wait, bet you can’t either :)

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Kim January 6, 2012 at 9:44 am

Sarah, you guys are so close! Have you decided, will you be leaving for Thailand in February??

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Gemma January 8, 2012 at 8:23 am

Some really great tips in here, I’m going to be starting a new job soon and want to start saving some money to go towards either a trip away or something else (obviously still need to work out what I want!)

Glad your savings are going well!

:)

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Kim January 8, 2012 at 12:12 pm

Hi Gemma. Starting a new job is the perfect scenario to start saving. If you put money away from the get-go you will never miss it. Congrats on the new job!

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Patrick HItches January 12, 2012 at 6:09 am

This is sickeningly AWESOME!!!!!!! I love what you guys are doing. Following you two? YES of course! :))))

Patrick

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Kim January 12, 2012 at 6:26 pm

Hey, thanks Patrick!!! It has taken a LONG time to get here but we are finally so close I can taste it.

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Sabrina January 16, 2012 at 11:27 pm

Hi! Just came across your blog, and I’m actually planning to do the same as you guys and leave the cubicle behind!! Just thought I’d mention http://www.airbnb.com in case you guys haven’t heard about it. There’s some really neat places up for short term rent and the prices can be really good!!

Happy Trails!

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Kim January 17, 2012 at 5:28 pm

Sabrina, congrats on (almost) leaving the cubicle behind! I think making the decision is the hardest part :) I’ve never used airbnb but definitely plan to during our trip. I sort of stalk it now, looking at apartments in all the places we want to visit. Thanks for the heads up, it is a great resource.

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Elizabeth Bird February 1, 2012 at 11:38 am

Great tips! I totally do that “save the small stuff” thing. Anytime I get even a small amoutn of money I go and make a transfer of that amount into my savings account. Work pay for lunch? Transfer $7 to the savings account. Its amazing how quickly it adds up.

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Kim February 1, 2012 at 7:38 pm

I know, it really is amazing. Plus, I find that by paying attention to the small stuff (like the $7 at lunch) you just become much more aware of how you spend your money. It’s a win-win.

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Annie@GreenGlobalTravel October 9, 2013 at 4:52 am

My bank has started the baby steps thing you’re talking about, you can add money to a designated savings account and the percentage goes up etc. I agree with you, it helps!

Thanks for the other tips too!
Annie@GreenGlobalTravel recently posted..JORDAN: Why I’d Prefer to Forget Visiting the Dead Sea, Jordan

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Kim January 11, 2012 at 8:53 pm

Ah, good luck with that Daniel, I will keep my fingers crossed for you!!! I know it sounds crazy but we buried St. Joseph in our yard (the advice of a friend) and our house sold in a day. I can’t help but think it was because of St. Joseph. Google it!!

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