Travel is simple and cheap if you let it be. I’m not a CEO, I don’t have a pyramid scheme to sell, and I work full-time as a peasantly bartender. In an effort to educate others about my frugal, jet-set lifestyle, I’ve put together a breakdown of my own spending habits and how I afford to travel. This guide will illustrate how I’ve changed my day to day, in order to afford a lot more epic days. Are you lacking in funds? Do you have a perpetual longing to fulfill your nomadic desires? If so, you’ll quickly re-evaluate what is important to you. I did, and you can too.
Step 1 – Reduce or Eliminate
A typical lifestyle in the U.S. involves wasting hundreds of dollars a month on things that you truly don’t need. I’m the first to admit that I was once a victim of this consumer driven lifestyle. By cutting out a lot of useless things, I know that I can go places and experience things that I normally wouldn’t be able to afford.
Here are some of the things I’ve cut out of my monthly budget:
- $200 Social Drinking – aka partying because you’re bored at home, save it for events & occasions. If you want to be social, invite your friends over.
- $200 Dining Out/Fast Food – Okay, so I’ve never spent that much on fast food, but I’m definitely guilty of splurging on brunch or a nice dinner out with friends.
- $70 Gym Membership – If I want to workout I can go for a run or hike outside, or just look up something on youtube. You can workout at home just as easily as you can at a gym.
- $40 Tanning – cutting back on my cancer risk
- $50 Starbucks habit – Even if you’re only going twice a week, it adds up.
- $150 Hair & Nail salon visits – I can live with natural nails and hair (sometimes)
- $150 Unnecessary retail purchases – Eliminating the random H&M and Forever21 trips. I never knew how horrible fast fashion was on the environment. Now when I shop, I splurge on things that come with a warranty and are sustainably sourced.
- $50 Smoking – I’ve never been a smoker, but I know people who spend a ton on their habit.
Total Saved : $900 per month or $10,800 annually
As you can see, lots of the little unnecessary things add up fast. Most of the items listed don’t apply to everyone, so challenge yourself by making your own list. Changes don’t happen overnight, so take things slow and thing about your day to day spending habits. I was able to cut out about $400/month or $4800/year from my random spending habits.
Step 2 – Take Advantage of the Bankers
This section is all about understanding travel rewards and earning free flights. Let me start by saying that I’ve earned 160k points in the last two years; enough for a free round-trip flight anywhere in the world. You may already have a rewards credit card or two, but are you taking advantage of the points game? A couple years ago, I started researching various travel rewards programs. As it turns out, there are tons of companies who offer bulky points bonuses after the first 90 days the account is open.
Understanding the Points Game:
- The goal is to find obtain a large sign on bonus – Sure, you can earn points on day to day purchases, but you’d have to spend $100,000 to get 100k points. There are dozens of cards who offer point bonuses over 30k just for opening the account. Those are what we’re looking for.
- Choosing the right card – I like to use The Points Guy when I’m comparing different cards. He gives a great breakdown of the fine print. Each company or bank sets specific parameters in regards to earning large bonuses. There are a lot of things that you need to keep in mind when you’re picking out the right card. Obviously, the sign on bonus is the most attractive/influential factor, but remember, banks want to make money off of you.
- Is there an annual fee? If so, is it waived the first calendar year?
- Is there a spending minimum in order to get the bonus?
- Is there an international transaction fee? I try to choose cards that don’t have one.
- What’s the Bonus offer?
- Evaluating a Good Deal – I currently have 4 rewards cards, and I just deactivated a different one. Below is a breakdown of how I chose each one:
- Wells Fargo AMEX 360 Propel – 20,000 points after spending $1000 in the first 3 months. So 20,000 points isn’t a lot, but this deal was too good to pass up. The annual fee and interest is waived the first year that you have the card and since it isn’t associated with a specific airline, you can book with anyone on any flight. I used 17,000 of these points for a free flight to New York.
- U.S. Airways Barclay Mastercard – 40,000 points after spending $1000 in the first 3 months and paying the annual fee. Impressive and well worth the $89 annual fee. Since I opened this account, U.S. and A.A. have merged. I’m not sure if this particular sign on bonus is still in effect, but Barclay does offer other travel rewards cards with large bonuses.
- United Rewards with Chase – 30,000 points after spending $1000 in the first 3 months. This was my very first travel rewards card and I chose it because the 90 day spending minimum was low and the annual fee was waived for the first year. I was surprised when I was accepted into the program because I had a pretty lacking credit history. I recently cashed in most of these points for a round-trip flight to Mexico, and subsequently closed the account.
- Citi Platinum AA Advantage Card – 50,000 points after spending $3000 in the first 3 months. Yikes! I just got approved for this card, and $3000 is a lot to spend. To help me meet this amount, I’m adding my mom as an authorized user. She’ll use the card to pay her bills, then reimburse me with cash. If you have trustworthy people in your life, they can make a significant impact just by changing the way they pay bills. Between her and another friend, I can spend about $1100/month without making real purchases.
- Alaskan Airlines Visa Signature – 25,000 points upon approval and a $100 statement credit for spending $1000 in the first 90 days. So this card is tricky for a couple of reasons. There are different levels of Visa cards, and what you get approved for determines the type of bonus that you’re eligible for. If I got approved for the lower level “Platinum Plus” version, I would’ve only been eligible for 5,000 miles, aka a whole lot of nothing. The next catch is the $100 statement credit. There isn’t a direct link that includes that bonus offer, so you have to actually start a booking on the airline website for it to show up. Don’t worry, you’re not actually buying a flight, you’re just trying to get to a confirmation page with a banner link. Click on that link and you’ll be redirected to apply. I like that the points are instant, but I’ll still try to spend $1000 in the first 90 days to cancel out the annual fee. This card provides enough points for a free round trip flight to Canada. Oh Yeah, Canada.
- Hit the minimum spending for the bonus – If you don’t hit the minimum spending amount for those first 90 days, you won’t earn the bonus. Don’t sign up for a card that won’t work for you or your lifestyle. One option that I’ve considered is to buy bulk amounts of gifts cards that I can use in the future. Unlike Visa and Amex gift cards, gift cards for gas stations, grocery stores, and restaurants typically don’t charge a fee for purchasing them. If I find myself $1000 dollars away from my spending goal, I could just buy a bunch of these cards for use in the future. I usually keep at least one 0% APR card on hand. This comes in handy for times like these because I could potentially transfer a balance to the card. If I find myself struggling to pay off the amount on a card, I could always transfer the balance to my card that doesn’t accumulate interest. Different companies have different rules, so always be aware and have a plan.
Understand, that this concept takes a lot of patience, a little effort, and great timing. It’s easy to get into trouble with credit cards, so never spend money that you know you can’t pay back. I have pretty great credit, because I’ve played my cards right. Remember, credit card debt can put you further away from your travel goal.
Step 3 – Travel Smarter
Wanna travel cheaper, and for longer? There are a lot of methods for achieving this goal, but you have to be willing to compromise and approach things with an open mind. Here’s a list of things to consider when you’re planning your next great escape.
- Flights are the biggest cost in your travel budget – If I don’t find a great deal, I don’t go. I plan my trip around the flight rather than the flight around the trip. I’ve flown round trip to Iceland for $330, one-way to Amsterdam for $185, and round trip from Charlotte to Dublin for $590. Check out my posts: Best Budget Airlines, and Finding Cheap Flights for more tips.
- Re-Think your accommodations – Remember, by staying cheaper, you get to stay longer. Europeans and Australians look at travel as a rite of passage rather than a scary, taboo, experience. That’s probably why they’re more comfortable with hostel dorms and airbnb than we are. I put together a Budget Accommodations Guide that describes how you can stay for cheap, or even free, while traveling.
- Plan Ahead – I’m all for spontaneity, but waiting til the last minute can cost you big time. Buy tickets, flights, rental cars, and lodging as far out as you can. This will give you more time to focus on the fun aspects of your vacation rather than the logistics.
- Watch your dollars – Banking fees, conversion fees, international transaction fees, the list goes on and on. The best thing you can do is familiarize yourself with currency conversions, then use a credit card for everything imaginable. I DO NOT travel with cash. If I need foreign currency, I’ll pull it out of an ATM using my debit card. Taking bulk amounts of cash, to convert it into foreign currency, is unwise. Most of the places you see in airports and train stations end up taking 20% of your money, just to convert it into another type of money.
- Splurge when appropriate – Buying travel insurance is affordable and wise. It’s usually not that expensive, and you’ll be happy that you have the coverage. Allianz has great reviews, but I’ve yet to file a claim through them.
- Travel Lighter – Don’t waste time and money lugging all your stuff around with you. Pack simple outfits that are versatile and easy to layer. I only pack carry on luggage.
Afford to Travel – F.A.Q.
What’s your credit like? Given that I apply for, and subsequently deactivate, a lot of cards and accounts, my score tends to bounce around. At any given time, it’s usually between 735 and 760
But seriously, don’t you have bills and stuff? I recently paid off a student loan, and I only owe $880 on my old school Camry. Between my car payment, splitting rent, and all my utilities, I pay about $600 in living expenses. I probably spend about another $500 a month on food, gas, and the little things. Sure, I don’t really have a high yield retirement plan or stocks that I’m sitting on, but if I died tomorrow I’d die happy.
What are you doing with your life? Good question, glad you asked that. I’m living my dream 40% of the time, and the other 60% of the time I live as a peasantly bartender and travel hobbyist. I used to think that I wanted to be a doctor. The thought of earning money and helping people was really exciting. Then I decided to quit school shortly after I finished my MCAT pre-requisites. No, I didn’t fail O-Chem, or ruin my GPA. I actually did really well in those classes and ended up with a 3.7 GPA (not the greatest, but pretty awesome when you consider that I spent my first two years as a Fine Arts major). Anyway, I realized that my motivation was flawed. I wanted to achieve a lifestyle. Then I realized that doing what you want and traveling the world isn’t correlated to your salary, but instead your level of desire.
But aren’t you scared about the long term? My passion is traveling, writing, and exploring. I don’t want to waste my time jumping through hoops so that I can have free dental and 2 weeks of paid vacation a year. I think in the long term, I’d be really disappointed if I looked back at a world of missed opportunities in exchange for a mortgage and a slightly cooler car.
I’m still confused about the points thing, can you help? It’s a lot to take in at once, but there are entire websites and blogs devoted to making it make sense. Check out some of these sites for more help: Travel is Free, Million Mile Secrets, and the guy who launched it all, The Points Guy.