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How To Reduce Expenses and Save Money To Travel More

    Posted Date: February 2, 2021

    Another month has passed and your savings are still in the gutter.

    Frustratingly, you wonder where all of your money has gone and why you don’t have more in savings.

    “I’ll never have enough money to travel the world.” – you think to yourself.

    Okay, before you completely resign to the idea of traveling the world, let’s talk about this.

    I’ve had that conversation with a friend before. She thought it would be cool to travel the world but quickly shot down the idea because she thought “she would never have enough money to do it.”

    The truth is, she could have enough money to travel.

    The problem is the way she is spending her money in the first place. She was spending a lot of it on unnecessary things.

    Traveling the world is not reserved for “rich people”. I’m not rich. Not even close to being rich, actually.

    However, I have still managed to take two long-term sabbaticals from work, and I’m still in my 20’s. A 4-month backpacking trip throughout Europe and a 12-month around the world trip with my husband. I’m no one special – just your average human over here.

    The secret? I’m good at saving money. I know, boring answer, right? But it’s true. I know how to reduce my expenses and how to live frugally.

    In this post, we are going to look at how much money you are spending per month and find ways to reduce your expenses. In turn, you will start saving more money for your trip around the world.

    Spend less, save more

    The art of saving is quite simple – spend less and save more. Seems easy, right?

    It should be easy, but for some reason us consumers have hard time with the “spend less” part.

    I get it. When you have a job, it’s way more fun to spend your hard-earned money on fun stuff like a new car or a new wardrobe or a new tv. The rewards are immediate and it’s feels good to treat yourself.

    But what if I were to tell you that if you stopped spending your money on all of that “stuff”, you could do something even cooler.

    You could travel the world.

    That’s what my husband and I did. We stopped spending all of our money on stuff and started putting it towards are savings. We were able to save 50% of our paycheck every month.

    We only ate out once a week. We found a cheap apartment to rent. We cooked. We hiked instead of paying for an activity.

    We lived frugally for 4-years on average salaries and saved enough money to travel the world for one full year. All by living with less and saving more.

    Calculate your Expenses

    If you want to reduce your expenses, you need to first find out how much you are spending per month.

    This next part will take a bit of work on your end but trust me, it will be worth it. If you already have a budgeting app or track your monthly expenses, then you are one step ahead!

    Go to your bank account, credit card account (or use your budgeting app), and anywhere else you keep your money and pay bills. Download the past 4 months of statements.

    Separate all of your expenditures into different categories. Sometimes your bank will categorize everything for you, but if they don’t you can use the categories listed below as a guide.

    Category breakdown:

    • Food & Drink – Separate into grocery store & restaurant
    • Rent/Mortgage
    • Utilities
    • Transportation
    • Entertainment
    • Clothes & Accessories
    • Medical
    • Miscellaneous (car repair, video games, home supplies, etc.)

    Take a moment to look at your numbers in each category.

    • How much money are you currently spending per month?
    • How much money are you currently saving per month?
    • Where are you spending the most money?
    • What stands out to you?
    • Is there anything surprising?

    Write these numbers down so you can reference them.

    You did it! Now you know how much you are spending each month and how all of your money is actually being spent.

    I know, this can be a bit overwhelming at first, but just seeing these numbers will help you to start finding ways to cut out or lower certain expenses.

    How To Reduce Expenses

    If you want to save money to travel, we need to dive in a bit deeper and see how you can take what you are already spending and find ways to reduce expenses.

    I’ve taken each category from above and broken it down into helpful ways to save some money.

    Not every example will be applicable to you, but these should give you some good ideas on how you can think about saving money on a day to day basis.

    Food & Drink

    Questions to ask
    • How many times are you eating out per week? This includes getting drinks such as coffee or alcohol.
    • Are you spending a lot on groceries?
    Tips

    1. Make a budget for groceries and make a grocery list

    Set a grocery budget to help you prevent yourself from overspending at the store and to help you make meal plans within your budget. We love to cook and bake, and we often make multiple trips to the grocery store per week buying stuff for dinner or dessert. This adds up quickly, so we have set a budget to help keep us from mindlessly spending at the store.

    Make a grocery list to help you stick to the items you need without going home with bags of extra snacks and unnecessary money spent.

    Buy groceries online if possible. That way you can see how much your groceries cost while you are shopping instead of being surprised by the cost at the cash register.

    If you really want to cut down on your grocery bill, buy less meat and more produce, beans, lentils, and rice. Meat and seafood can get really pricey, so we try to cut back on how much we are eating.

    2. Make lunch

    Making your lunch instead of eating out can save you thousands of dollars per year.

    At my previous job, my co-workers would often ask me how I have the motivation to make lunch every day for work. Here’s how. If you eat out 5 days per week for lunch and spend an average of $10 per meal, that’s $50 per week and wait for it . . . $2,600 per year.

    That’s a whole lot of money to spend just on lunch. You can easily prepare your own lunch for $3-$4 per day for a grand total of about $800 per year. That’s $1,800 saved just by getting up early to make your lunch. By the way, $1,800 is how much you need for about 1 month in Southeast Asia.

    3. Make your own coffee and tea

    That $3 cup of coffee in the morning can actually end up costing you over $1,000 per year. Do yourself a favor, buy some beans from your local coffee shop and a coffee press and brew your own cup in the morning.

    4. Limit your alcohol consumption

    I personally do not drink alcohol, but I do know that it costs a lot. By reducing the amount you drink, you’ll save tons.

    5. Cook

    Cooking your meals is almost always cheaper than eating out, and this is an easy lifestyle change that will help reduce food expenses. Challenge yourself to eat out only once a week and cook all of your other meals.

    If you don’t like to cook, find a way to enjoy it. You can’t eat out every other day and complain about your savings not growing. Start with the basics – pasta, rice dishes, salads, etc. – and go from there. I loathed cooking growing up, but now I find it as a way to press pause after a hectic day.

    Rent

    Questions to Ask
    • Could your rent be cheaper?
    • Do you live in a nicer place than you need to?
    • Can you find roommates?
    • Can you move in with friends or family?
    Tips

    1. Move-in with roommates or family

    Rent is usually one of the highest monthly costs, so if you can split up the cost with roommates or potentially live with family for really cheap or free, it can save you a lot. My parents were kind enough to let me live with them for free for 1.5 years while saving up, and Colin lived with a neighbor that let him live there for $100/month. It definitely was not ideal, but it helped us save money to travel the world, so it was worth it.

    2. Find a cheaper place to live

    Search around and see if you can find cheaper rent anywhere. Or move to a new city that is more affordable if that is an option. Often times, we choose to live in more expensive apartments or places than we need to.

    Our rent for 2 years was $800/month. It wasn’t the nicest place in town, but it had everything we needed, and we loved the neighborhood. We could have easily spent $1,200 a month on a fancier apartment, but we decided not to and ended up saving $4,800/year by going with the cheaper place.

    I get it, these solutions don’t always work for everyone. Sometimes you are locked into a lease and some of you may even own a house and have to pay a mortgage, but you can always try to sublet your apartment or rent your home while you travel to cover your costs.

    Utilities

    Questions to ask
    • Can you use less energy to lower your bill?
    • Can you use less water?
    • Are there any other internet plans that are cheaper?
    • What’s your phone bill plan? How much are you spending per month?
    • What type of light bulbs are you using?
    • Do you pay for cable?
    Tips

    1. Open your windows and close your blinds

    During the summer, in the heat of the day, try closing your blinds to avoid having to keep the A/C running all afternoon. At night, open up your windows to cool down your place instead of using A/C. These are simple solutions to help reduce your energy bill.

    2. Take shorter showers.

    Save on your water bill by taking shorter showers.

    3. Change your lightbulbs

    Say goodbye to your traditional lightbulbs and replace them with LED or CFL lightbulbs. These lightbulbs are more energy-efficient than traditional incandescent ones and will help you save on your energy bill.

    4. Find a cheaper phone plan

    Is your phone plane more than you would like to pay? Ask to join a family plan or look around to see if there are any cheaper plans available with your network provider.

    5. Ditch cable

    Get rid of cable and enjoy the savings each month. My dad recently got rid of his cable plan and is now saving $55 per month.

    Transportation

    Questions to ask
    • Do you own a car? How big is your car payment?
    • Do you take public transportation? Get Uber?
    • Can you carpool?
    Tips

    1. You don’t need a nice car and a big car payment

    The purpose of a car is to get you from point A to point B safely, not to drive the fanciest car on the block. If you are planning on selling your car before you leave on your trip, then don’t buy a fancy $20,000+ car with a big car payment. You don’t even need that nice of a car if you aren’t planning on traveling.

    Spare yourself $12,000 and buy yourself a decent $8,000 car instead and save a couple of thousand dollars per year on a car payment.

    Colin owned a 2000 Honda Accord that he bought for $3,000 in cash in 2015. I owned a 2007 Mini Cooper that I bought for $10,500 in 2013 (paid it off in 2017). I am so grateful that we did not have huge car payments and were able to put that extra money towards our trip.

    2. If you live in a city, take public transportation as often as possible

    Taking public transportation is an excellent way to save money on gas and a car payment. Look into different options in your city and see if you can save by signing up for a monthly bus or subway pass.

    3. Carpool

    Carpool with a co-worker or a friend to work to help save on gas expenses and reduce the wear and tear on your car.

    4. Bike

    If you have a bike, use it! You’ll cut down on gas and other transportation costs while getting fit – bonus!

    Clothes & Accessories

    Questions to ask
    • How many clothes do you have in your closet right now?
    • Do you have enough clothes to last you one week?
    • Do you have enough makeup in your beauty drawer?
    Tips

    1. Stop buying so many clothes

    If you go and look in your closet right now, do you have enough clothes to wear for 7 days? For a month? Then you don’t need more clothes. Learn to ignore the trends, re-wear clothes, and simplify your wardrobe. It will save you money and it will save the planet.

    2. You don’t need so many options in your beauty/toiletries drawer

    There are so many options available when it comes to toiletries and beauty products. It’s easy to get caught up in it and feel like you need everything. You do not need 10 lipstick options and 5 eyeshadow pallets. Reduce the number of items that you buy and simplify your routine.

    I have the basic toiletries that I use every day, and I replace them when they run out. Use what you have before buying more.

    Medical

    This is one of those necessary spendings, and there is not a lot that you can do to cut down the costs. I know there is an option to potentially reduce your monthly insurance premium. Look to see if there are any cheaper insurance options during the open enrollment period.

    Entertainment

    Questions to ask
    • What activities do you spend money on the weekends?
    • Do you go out to the movies often?
    • Do you pay for activities every week?
    • How many online streaming services are you signed up for?
    Tips

    1. Find free/cheap activities to do

    Instead of paying for an activity every weekend like going out to the movies, comedy club, bar, etc., find activities that are free or cheaper.

    Go on a hike, have a game night with friends, read a book in the park, go camping, or become a tourist in your own city. There are so many things you can do for free. Save your money for all of the cool bucket list items on your trip.

    2. Unsubscribe from streaming services

    Do you pay for Netflix, Hulu, Disney +, and Amazon Prime Video? If you do, see if anyone wants to join in on your plans to cut those monthly charges in half. You could also unsubscribe from one or two of them to save an extra $15+ per month. We used to pay for Amazon Prime but decided to get rid of it to help prevent us from spending money on Amazon and also because we didn’t need another streaming service.

    3. Get a library card

    Do you like to read? Get a library card! We are both signed up for library cards and check out books instead of purchasing them. Often library cards also give you access to free museum passes and other discounted activities.

    Miscellaneous

    Questions to ask
    • Does your cell phone work?
    • Does your computer work?
    • Do you have an expensive gym membership?
    • Are you subscribed to any monthly subscriptions?
    Tips

    1. Unsubscribe from subscriptions

    Are you signed up for any box subscription? Or magazines? Or online learning courses? Limit the number of subscriptions you sign up for to save an extra $20-$100 per month.

    2. Things will last

    Can you make your cell phone last an extra year? I’ve had my iPhone for 4 years and it’s still going strong. I’m not getting rid of it until I absolutely need to. Make your items last instead of replacing perfectly good items with new ones.

    3. Find a cheaper gym

    Exercising is important, but sometimes gym memberships can cost more than $150 per month, which is $1,800 per year! You can cut down on this cost significantly by finding a cheaper gym to go to. For example, Colin and I had a gym membership and paid $20/month – $240 per year. That saves us $1,560 per year, which is the cost of almost one month worth of traveling.

    Save Money To Travel

    After reading this, you should have a few ideas on how you can reduce your monthly expenses. Make sure to do the exercise and calculate your expenses over the past few months to see where you are spending your money – I guarantee that you will be able to find costs you can cut out each month.

    Once you start putting this into practice, you should start seeing more in your savings account each month. This is how Colin and I saved money to travel – we found ways to live cheaply and frugally. It’s not rocket science – it’s just learning to spend your money wisely.

    Let us know how your savings journey is going below in the comments!

    3 COMMENTS:

    1. Great post! I love your recommendations to spend less where you can! We need to take a look at our budget to see where we can save.

      Biking is a great way to save on transportation (and potentially a gym membership); it might also save you time on specific commutes. We saved a lot of money by not owning a car for a few years (no insurance, gas, or car payment).

      For us another thing that was very helpful was learning how to use credit cards and points. Redeeming points for plane tickets made it possible for us to travel abroad even when we had very little income as students for many years.

      1. One Year Around The World

        Hey Renan! Those are both great ideas. I already added the bike one into our post. I’ve talked about credit cards in our other post about saving, but we will write some more about points since they are a great resource!

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