If you love to travel, one of your dreams might be to travel around the world. Apart from planning your route, one of the biggest challenges of fulfilling this dream is the financial aspect.
A lot of money is required to cover a trip around the world, even if you decide to go on a budget backpacking trip. From transport fares to accommodations, your budget needs to cover your daily expenses as well as emergency expenditure. For example, you might need to take out extra finances for a trip to the doctors, or for an air ambulance back to Singapore. To ensure your finances are enough to cover such medical evacuations to Singapore and other necessities, a sound strategy to save money is essential prior to the trip.
Here are some tips to help you save up for that trip of a lifetime:
Set up a savings plan
The best way to ensure you are saving money is to plan for it. Banks typically allow you the option of setting up a savings account, which helps you save a certain amount every month until you reach your target. If you prefer to do it the old school way, you can also devise your own system to save. For example, set aside a certain percentage of your salary every month before you start spending any of it. In adhering to a savings plan, discipline is key. Keep away the temptation of touching your savings fund until you reach your goal.
Track your expenditure
Although you set aside a fixed amount to save every month, you can accumulate your funds more quickly if you save more from your spending money. So, spending frugally will help you reach your target in less time. To bring your attention to your own spending habits, you can consider tracking your daily, weekly, and monthly expenditure. This allows you to analyse where your money goes, and where you can cut down unnecessary spending in your life.
Spend less every day
When you spend less, you save more. The most effective ways to cut down on spending is to cut down on luxuries in your life, and opt for cheaper options wherever possible. One significant consumption of finances is car ownership – not only do you have to pay for the car, certificate of entitlement, and road taxes, you need to top-up the gas every now and then, and send the car for servicing. This adds up to a lot of spending every year. A cheaper alternative is to stick to public transport, and travel on foot for shorter distances. Even the occasional taxi or ride-sharing trip will cost you less than owning a car.
Another substantial part of your income will go to your utility bills. Thus, it is good to cut down on your utility usage where possible. For example, you can avoid using the air conditioner on cool nights, and opt for a fan instead on warmer nights. Skip the dryer for your clothes, and hang them up to dry naturally instead. These little savings will go a long way to helping you achieve your savings goal.
Aim to travel simply
A trip around the world will set you back a decent amount just due to the logistical aspects of it, like transport, lodging, and insurance. In addition, it won’t be a short trip – some people take months or years to explore the world – and how long you take will be up to you. However, this means that you should aim to spend wisely at every destination, and cut down on unnecessary costs. For example, do away with the luxurious spas or lavish meals, and opt instead for simple local food and experiences. When you plan to spend simply on your travels, you can budget for less, and reach your savings target much earlier.
A trip around the world doesn’t have to be an unreachable dream if you plan wisely and stick to prudent spending habits. As always, don’t forget to plan ahead for emergency contingencies, and make safety a priority.