Unless you’re very lucky, when you decide to start saving for your travels, you probably can’t afford to start putting bucket loads of money aside right away. We’re nearly at the stage where we can begin getting serious about saving our money. But before we do, it’s time to sit down and go over our finances.
If like us you want to save as much as you can before you jet off, there are a few steps you can take to get yourself in the best possible position for saving.
Choose a rough number
Right now your budget doesn’t have to be set in stone. But it’s a good start to have a rough idea of how much money you want to save before you leave. Setting a real target can be done later.
Pay off anything you can
Firstly, look at your current situation. Do you have any debt that you can pay off relatively quickly if you work hard? This might be anything like a credit card or an outstanding loan. Getting rid of these before you begin saving might slow you down temporarily, but it means you can save more each month in the long run.
In our experience it’s best to get rid of what you can and start with a clean slate, or as clean a slate as possible (that student loan doesn’t seem to be budging!). For us we’re paying off the last bits from our wedding and getting back to zero so we can start saving as much as possible to achieve our goal.
Work out your monthly outgoings
Next, work out how much money you have going out each month. This can include rent, bills, running your car – whatever it is you’re spending your money on. Write down each expenditure and work out a total for the month. Take this way from your monthly salary and see what you’re left with.
Once you know what your disposable income is, set aside a weekly budget. By this I mean set aside some money for the things that aren’t ‘necessities’. This might be a bit of money for going out at the weekend, or for beauty products. The kind of things you can live without if you really want to get strict, but that you also enjoy having. Let’s call this the ‘fun budget’.
Top tip: Draw your weekly ‘fun budget’ out of the bank so you can keep an eye on what you’re spending. This will help to reduce the temptation of making unnecessary purchases on your debit card (buying that extra round of shots always seems like a good idea when you’ve had too much to drink!).
Consider unnecessary expenditures
When working out your monthly expenditure you should be able to notice if you’re spending a little too much on something that you don’t really need. For example, are you still paying for a gym membership you rarely use? Why not take up running instead – it’s good for you and it’s free! Could you cut down your mobile plan? Have you got a Netflix account you don’t use? (OK that one’s hard, because who doesn’t love a Netflix binge!).
Still, the point of this exercise is to cut down costs where you can. The odd £5 here and there might not seem like a lot, but over time it really will make a difference to your savings.
What are you left with?
So once you’ve worked out what you’re spending each month, set your weekly ‘fun budget’ and cut out any unnecessary costs, you’ll be able to see what you have left. What can you feasibly put aside into your savings each month? This will help you to determine roughly how long it’s going to take you to save for your trip.
That is unless you have other money-making schemes on the side!
It’s important to remember that saving is about discipline, it can be somewhat of an art. You’ll quickly get good at bargain hunting and saving the pennies where you can. Sometimes it can be about sacrifice. But if you look at the bigger picture it’s definitely worth going without the odd take away if it means that next year you’ll be eating tapas on a beach in Spain!