Right now youโre thinking, โWell how the heck is taking a Round The World (RTW) trip going to save me money? You idiot. Iโm done with you. Iโm going back to cutting coupons.โ Youโre right, if I was taking a RTW trip without adjusting my lifestyle beforehand it would be a complete financial disaster. ย The truth of the matter is, itโs not the actual trip thatโs going to save you money (Mr. Obvious), itโs the lifestyle youโve created prior to departure that will provide the financial freedom that youโre yearning for.
The lifestyle of a Budget $avvy Traveler is similar to someone who lives debt-free. Whether itโs travelling the world, saving for college, or starting a business. Youโll need to make wise financial decisions and sacrifices in order to make your dream ย a reality. Letโs break it down.
- Know where youโre spending your money. Do you spend hours per week cutting coupons but arenโt aware of the interest rate youโre paying on your car loans or mortgage? Thereโs no need to be penny wise and dollar foolish. Know exactly where your large expenses are and do whatever you can to decrease them. Visit PenFed to refinance and receive a great rate with low closing costs. Also visit lowermybills.comย to identify other opportunities to save money.
- Live on less than you make. As your income increases over the course of your career try to limit the increase in your lifestyle. You were fortunate enough to receive a promotion, this doesnโt mean you deserve or are entitled to a big house and a BMW. When Iโm feeling like I really need a Corvette or sailboat (because of course itโs going to make me happy), I tell myself that I should go rent one the next time I have the opportunity. Of course, I never end up renting one. Once that feeling of wanting/needing has passed, logic sets in and you realize what a foolish purchase it wouldโve been, especially when you start adding in the additional costs of maintenance, insurance, etc.
- Pay yourself first.ย Make sure youโre setting aside fundsย every timeย you getย paid. Contribute to your your emergency fund, retirement, investments, and of course your RTW trip. Your emergency fund will eventually turn into your RTW trip fund (weโll get to that in later posts).
- Make some sacrifices. Starting small, but cancel the sports and movie channels. Get a dumb phone and unplug from the smartphone. Get a pair of Leviโs instead of the $100 jeans. Go out for dinner once a week and order a sandwich instead of the entree. If you really want to save money and live your dream as soon as possible go on a beans and rice diet. The more you sacrifice now the greater the rewards in the future.
Most life goals donโt occur because of the rationalization of (1) โI donโt have the time.โ ย (2) โI donโt have the money.โ If your goal is truly important to you, ย youโll make the time and youโll set aside the money. Planning and budgeting for a RTW trip is a huge sacrifice. Beyond that, it will supply you with the financial knowledge and wherewithal to accomplish future goals well past the time you return from your RTW trip.