To make your dream trip happen, you’ll need a good savings strategy, like the one adopted by my friend Teresa. She’s a 32-year-old government contractor who makes $ 70,000 per year and has built a life around traveling abroad and prioritizing those adventures above all else. Take her last vacation: Teresa spent 15 days in Australia, ringing in the new year at the Sydney Opera House Bar, doing five scuba dives in two days at the Great Barrier Reef, bungee jumping in the rainforest, and encountering Tasmanian wildlife. The whole shebang cost $ 3,000, which she saved up in six months.
Of course, Teresa’s salary puts her solidly in the middle to upper class. Most of us don’t have as many resources to set aside each month. But even if your salary is half that, the lessons Teresa gleaned while saving for this Aussie adventure can also apply to you.
OUTSIDE: How do you build travel savings into your monthly budget?
TERESA: If I have an upcoming trip, budgeting for it becomes my second priority, after paying my monthly bills. One of the most helpful things I do is create a separate savings account and name it. I set a savings goal and a deadline. For example, for this trip, I made a fund called “Australia New Year’s Eve—Save $ 3,000 by December 26.” This encouraged me to funnel as much money into the account as possible. I get paid biweekly, so after I pay my bills and other expenses, I transfer money into the new savings account.
What’s the most difficult part of setting aside savings for a trip like this?
Determining how much to contribute to the savings account and how often. Sometimes my monthly expenses can fluctuate, so it’s difficult to maintain a set amount each month to set aside.
What are some tips or hacks you use to save money in your travel fund?
I use Bank of America’s Keep the Change feature, which rounds up change on purchases from my debit card and deposits those leftovers into my travel savings account. Some months, I accumulate up to $ 50 extra just from this one savings hack.
How did you approach starting to save for this trip?
My big trip to Australia took about six months to plan. The first thing I did was use Google Flights to create a tracker to find the best prices. After I booked the airfare to Australia (the most expensive part of the trip, which set me back just shy of $ 1,000), I spaced out the savings over the next three to four months. Luckily, I traveled with a friend and could split the expenses.
Each month, I would contribute more money into my travel savings account and book something new for the trip. After I purchased my flights, the next month I booked lodging, and the month after that, the flights within Australia. My friend and I alternated booking reservations so that no one would be stuck with all the costs.
We stayed in Airbnbs and flew the discounted airliners to help cut down on costs. About three months into planning, we booked our activities. About four months into planning, the big expenses were out of the way and I could focus on saving for food, souvenirs, and other surprise expenses (like overweight luggage fees!). Shortly before the trip, I took a portion of the money from my travel savings account and converted it into Australian dollars. I left the remaining amount untouched so that upon my return from Australia, I could immediately pay off the credit card I used while traveling. This is a great tip for anyone who is going on a big expensive adventure.
How did you decide what you were going to splurge on and where you were going to save?
My trip included four cities: Sydney; Melbourne; Cairns; and Hobart, Tasmania. For me, comfort is essential, so I splurged a little on airfare and flew Air New Zealand with premium economy seats for the longer flights. Since my friend and I were traveling to celebrate New Year’s Eve in Sydney, we knew prices would increase, so we splurged a little on some nicer restaurants for dinner. We decided to save in other areas by staying in Airbnbs with full-sized kitchens so we could make our own breakfast or lunch each day.
Do you have any favorite travel deal sites or travel hacking tricks?
I love the deals from Groupon and TravelZoo. They usually have great itineraries and are good for first-time travelers or those who do not enjoy planning.
My biggest travel tip in addition to tracking flights using Google Flights would be to consider booking separate one-way airline tickets. For example, I flew from Washington, DC, to Los Angeles before my long flight to Australia. It was cheaper and beneficial for me time-wise to book a separate round-trip ticket to/from Los Angeles, and then book the second portion (L.A. to Sydney). Additionally, it’s important to consider utilizing long layovers and turning those into adventures. A few years ago, I flew to Hawaii via San Francisco. Normally, the layover would have been just a few hours, but for no extra charge, I could extend my layover to enjoy 48 hours in San Francisco.
Where are you going on your next adventure? Any changes to your savings strategy?
I believe my next international adventure will be to Morocco. For that trip, I’d like to purchase an all-inclusive deal with a fixed price that includes lodging, flights, and food. I’m a fan of Travelzoo, so I’m going to keep an eye out for deals over the next few months. I imagine I will use similar savings strategies and can hit my goal in a shorter amount of time since this trip will be less expensive.