The last few posts have been covering India and word has it that a rather large instalment of American road trip posts are on the horizon. However, before delving into another series, I wanted to do a quick tips post on how to save up for travelling. As I get near the end of medical school, the opportunity to do an elective placement abroad is getting nearer and this guide will hopefully help students save as much as possible for it.
If you’re interested in budgeting then check out my guide on planning a budget trip. This post is a more general view on saving money for a short term goal so feel free to use it for things aside from travel.
1) Set a Goal
You should have a pretty good idea of how much you’re planning on spending on travelling- including flights and emergency cash. Sort out your budget first and then you can create a goal.
It’s way easier to save money when there is a target to get to; aimlessly putting money away can be demoralising without seeing any sort of progress. You might also find that you’ve saved quicker than you thought you would and you can loosen up a bit (or keep saving and travel like the king/queen you are).
2) Get a travel credit card
Start getting additional benefits for spending the money you’e already spending. There are a whole host of credit cards that offer perks for using them (especially in the US- Nomadic Matt has a lot of info on this).
American Express typically awards points that can be used for hotels and car rental but the best one I’ve found in the UK is the British Airways Amex card. This allows you to get Avios (BA air miles) for day to day spending as well as additional points for shopping online at certain retailers and even more for a BA flight .
Using my referral code you can get a 6000 Avios bonus which is 2/3 of the way to a return flight to Berlin. Alternatively, use them to upgrade cabins; this is typically considered better value for money.
3) Utilise savings accounts
This is a risk-free way to make your money work for you. For short-term goals investing is not recommended (and can lose money) so savings accounts are a more appropriate method. These accounts will give a higher rate of interest than a current account; even more so if you choose one that doesn’t allow withdrawals.
At the moment interest rates are pretty dire but it’s better than nothing and, by getting an account that penalises withdrawals, you can lock your money away from yourself if you’re weak-willed. They typically have a max amount per month that can be saved so consider opening several. Money saving expert has a page on the best rates and some offer freebies for joining as well.
4) Move your savings early
This is a simple way to maximise your savings. Lots of people will get their monthly salary and use it for all the necessities and bills, then going out and treats. Anything left at the end of the month gets put into savings.
Move the money early before you get a chance to spend it on unnecessary things. Figure out the amount you need and then move the amount of plan to save (which you should have worked out after point 1 on setting a goal). Most savings accounts require a direct debit so doing this can move the money before you have the chance to splurge.
5) Swap out a guilty pleasure
This isn’t saving up for a life-saving operation, you don’t need to go bare bones in your lifestyle. However, swapping out one extravagance for something you really want to do on your travels can give you some extra spending cash.
Think of something that you can forsake for a few months or a year. The classic choice would be switching from barista coffee to instant coffee (one a day for a year would be more than enough for a Scuba diving course or skydiving), opting out of a weekly takeaway, or making your own lunch for work. They all add up but don’t abandon all of life’s perks.
6) Use a rounding app
There are tons of apps that have the option of rounding up your purchases. This can be to the nearest pound or adding on even more. I use Starling (because the card also has 0% fees on foreign transactions) but it is by no means the only option. If you are always buying small things then this can really add up. This doesn’t lock your money away, it just moves money to a separate “wallet”; it can be moved back easily if necessary.
7) Optimise your bills
This is generally good fiscal advice regardless of if you’re saving for anything. It’s easy to get stuck with one company whilst they slowly bump up their prices and you end up paying way too much. For utilities and insurance using websites like moneysupermarket or comparethemarket can spot better deals and some companies will automatically find you the best provider and switch for you.
Another easy change is your phone bill. If your contract is coming to an end then renegotiate your contract; there are crazy savings to be had.
I use Three because they have a global roam pass which lets me use data for free is most countries in the world (including Colombia and USA most recently). If you’re thinking of switching use my referral link to get up to £40 in cash for joining.
8) Get a side-hustle
This isn’t as much a tip on saving as it is a tip on earning more money. Try and find an extra source of income that doesn’t amount to working an extra job. This can be something like tutoring (check my last post on budgets), blogging/youtube, or selling something (e.g my friend’s blossoming brownie business- DittoBakes).
This shouldn’t be something that feels like a second job, it should be making money from something that you do normally or in your spare time.
9) Don’t buy currency
So you’ve done the hard part and saved up all the money, now you need to spend it wisely. That means not putting it all into foreign currency. UK exchange rates are always shocking and with so many cards offering 0% foreign fees there is a shrinking need for cash when travelling.
You’ll likely need a little bit but I find ATMs in airports are often more economical than buying small amounts in the UK. Figure out how much you’ll need until you find your feet and don’t buy extra.
Enjoying the blog?
A little bit of a different post this week, more of an economy blog than a travel blog. Nonetheless, I hope it gave you some useful ideas of how to save as effectively as possible for your next trip. Let me know your ideas in the comments below and join the mailing list for updates!
Backpacking Scrubs 