Home ยป How to Save for a Year of Travel – Podcast Episode 3

How to Save for a Year of Travel – Podcast Episode 3

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Welcome to the Travel Wrighter Podcast, where I hope to inspire you to get out there and see the world one episode at a time. I’m your host, Megan Wright, and I’ll be sharing my travel stories, tips, and advice about exploring new countries moving abroad. Solo travel, grown up, gap years, and so much more.

Let’s get started.

Hi guys. Welcome back to the Travel Wrighter Podcast and welcome to episode two. And in this episode, I really just wanna start to dive right into the topics that I said I wanted to cover in my introduction episode. And actually, if you haven’t listened to my introduction episode, I would strongly encourage you to go back and give that a listen, because that is where I introduce myself as the travel wrighter.

My name is Megan Wright, and I just give you a brief background on myself, tell you where I came from, where I live now, and where my passion for travel came. And I also start to talk about some of the topics that I want to discuss on the Travel Wrighter Podcast and just kind of give you an overview of what you can expect on the podcast as a whole, like going forward.

So one of the topics that I said that I wanted to cover was how to take an entire year off to travel the world and walking you through step by step exactly how you can do it. Because I did this myself back in 2017. And let me tell you, hands down, it was one of the best decisions. and years of my life ever.

So if you go back and listen to the introduction episode, you’ll get the full details on how this came about and why I did this. But long story short, I moved to London in 2012 from Chicago, and in 2017 my visa expired and I couldn’t work in the UK for a year. So I had to decide what I was gonna do for that year because at that time I really wanted to move back to London.

And I mean, I did, I do live in London now, but I had to decide was I gonna do. Work at another branch, was I gonna go back to the states and get a job there? And luckily I was surrounded, you know, by all my friends who love to travel just as much as I do. And a lot of them are British and here in the UK they do what’s called a gap year.

So this is actually, it’s normally when you’re younger, you take a year off after you graduate from university, so around the age of 21 and you take a year off before you start work to just go out and travel the world. So a lot of them encouraged me and said, you know what? You never did this in America when you were younger.

Why don’t you just go out and travel and see the world now? And I was like, yeah, that’s a good idea. So I have deemed this the grown up gap year. So I did this at the age of 31. And that is another thing, I don’t wanna hear any excuses from anyone saying, oh, I’m too old to do this, or vice versa, you’re too young to do this.

No. Definitely not. You are never too old to go out there and see the world and travel solo and take a grown up gap year backpack around Asia. And I’m actually gonna do an entire other episode on this, which is like breaking down all of the fears and the stereotypes and the negative things that people might be saying to you about taking a gap year in your 30s.

And I’m gonna help and encourage you and give you advice on how I got over this, because like hands down, I had these same fears. So I was 31 and I was about to backpack solo through Southeast Asia, and I just had it in my mind, this is only what 20 something year olds do. I’m gonna be like the oldest bitch out there, like nobody’s wanna be friends with me.

That was the furthest thing from the truth guys. Like, that’s not gonna happen. So anyway, I’m getting ahead of myself. That is gonna be an entire other episode in itself because, what I wanna cover in today’s episode is one of the first questions that I get asked when I say I took an entire year off to travel the world, and I feel like this is also something that really holds people back from doing it themselves because it just seems like so far off and so overwhelming. They don’t even know where to start. And this is how I came up with a budget and how I saved enough money to take an entire year off and travel the world myself. And I’m an accountant guy, so you can trust me, right? I know a lot about budgeting. I know a lot about money.

So, yeah, I’m just gonna break this down into steps for you so that it’s really easy to follow and that you can do this yourself. So go ahead and get out a pen and paper or your computer or whatever you take notes on, because I’m gonna take you through step by step exactly how I did this to myself, and I’m gonna teach you a lot of tips and advice here.

Step 1: Have a start date in mind

Okay, so the first step to doing this is that you need to have a start date in mind. When are you actually going to go and do this? Because we need to come up with how long do you actually have to save the money. So when I did this myself, I knew about a year in advance that I was going to take this year off.

So I had an entire year to budget and plan. So that is step one. We need to write down a date when you’re gonna be getting on that one-way flight to wherever you decide to go. Okay. So let’s write down our start date. Have that in mind.

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Step 2: Figure out how much you can save

Okay. Step two, we’re gonna need to figure out how much you think you can realistically save between now and the date that you just wrote down.

And we’re gonna do this by analyzing our spending and figuring out how much you have coming in each month and how much you have going out each month. And we can just do this by just looking at one typical month. So we don’t need to look at an entire year of like spending, that’s way too overwhelming.

But we can just start by looking at one month and we can project that out for 12 months. And when I say project it out for an entire year, we just multiply it by 12. That’s, I hate that when like finance people just use like fancy words. Yeah. We’re just gonna multiply one month by 12. Okay, so let’s look at one typical month.

Now you can. I would encourage you to pick one month where you didn’t have like some insane, outgoing spending. Maybe like your refrigerator broke or your car broke down, or you went on an extravagant trip. That’s not a month that we want to analyze because that’s not gonna give us a realistic picture.

We want to pick one typical month from this past year that you think gives. A very reasonable snapshot of what your normal income and your normal spending habits are. So let’s just pick a month, and what I want you to do is go into your bank statement for that month, and I want you to pull out all of the things that you spent money on, and I want you to start putting these into different categories.

And I’ve come up with five main categories that I used when I was analyzing my spending. So you can also use these if you’d like. If you think there are other categories you wanna pop on, also do the same if you think some don’t apply to you, that’s also fine. Take those off. So the first category was food.

And I did break food down into two separate categories, and I think you should do the same because this is really telling. So the first subcategory would be eating at. Like cooking for yourself at home. And then the second category would be eating out at restaurants or getting takeaways in because you’re gonna be spending more money doing that than you are just cooking for yourself at home.

So the first category is food, and the subcategories are eating at home versus eating out. . The second category is gonna be transportation, and this would be money that you’re either spending on a car that you own or trains if you take public transportation, et cetera. So anything that you spend on transportation, that’s the second category.

The third category is going to be rent or mortgage. So what are you spending on your living your house? So I pay rent. I live in London, so I pay rent. If you own a home, that’s gonna be your mortgage. So that’s your third category. The fourth category. This is gonna be what I would label entertainment. And this is stuff that you spend money on for fun.

So things like going to sporting events or the bar or movies, things that you do for fun that I think should go into the entertainment category. The fifth category, you might consider this entertainment, but I didn’t. I’d wanted to break this out. Separate and that is the shopping category. So that is gonna be spending things on like clothes or stuff that you like to go shopping for.

That’s gonna be your fifth category. Okay, so go through your bank account, label each of those into one of those five different categories, and then that’s gonna show you where the majority of your money is being spent. And maybe you’ve never done this before, and you’re gonna find that you’re really surprised that you’re spending tons of money.

I mean, I don’t think anyone’s gonna be surprised that they’re spending tons of money on rent and mortgage, like that just is what it is. But maybe you’re gonna be surprised by how much you spend. Shopping or food or going to the bar, like any of those that might be very telling. So we’re gonna look at the spending in one typical month.

Now, the next thing we’re gonna do is we’re gonna take the income after tax that we get paid each month. So I want you to look at the actual pay that goes into your bank account each month from your employer. That’s gonna be the income that we want to focus on. We don’t wanna think about before tax because that’s not actually the money that’s going into our bank account.

We want the after tax income that we actually get put into our bank account each month. So now we have our income figure and we have our expense figure, and we have our expenses broken down to categories. And I’m gonna come back to that in a second because that’s gonna help us figure out how and where we’re gonna save the money.

Okay, so we’re gonna take our income figure and we’re gonna subtract our expense figure. And that net amount is gonna be how much you’re actually saving from your income each month. Multiply that out by how many months you have until you leave. So in my case, I had 12 months, so I multiplied that out by 12 months.

That is how much money you are realistically going to save before you go on this trip. Now, if we don’t think this is gonna be. That is where we can then start to think about flexing our date, if that is a possibility. I mean, in my example, there was no flexing that date. I was getting kicked outta the country on September 3rd, 2017, no matter what I did.

So I had no wiggle room. I had to just buckle down and save and get going. But if you have some flexibility and you don’t think that that’s enough money, then you can flex your start date and you can multiply that number out by however many extra months that you wanna give yourself.

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Step 3: Figure our where you can or want go

Now that’s where I come on to my step three because like I said, you need to figure out if that’s actually gonna be enough money for you to take this year off and travel the world.

And this is going to depend very heavily on where you actually want to go. So for example, I went to Southeast Asia. This is a very, very cheap part of the world. So my money is going to buy a lot more and it’s going to last a lot longer than if I were to go somewhere like Australia or America or Europe, et cetera.

And this, again, is an entire. Self. It’s deciding where to go, and I’m gonna break that down for you. I’m gonna tell you realistically how much each of these places costs, what makes each location unique, why you might wanna go one place over another. But again, getting ahead of myself, that’s an entire other episode.

But yeah, step three, you need to pick where you want to go. And that’s really gonna be driven by how much money you have and how much you can realistically save and afford to do.

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Step 4: Analyse where you can save money

So after step three, we then come on to step four, which is that we actually need to start saving the money. And this is the hard part, and this is what I’m really gonna dive into and help you with right now, because again, I had to do this myself.

I live in one of the most expensive cities in the entire world. And I was still living within my means, but not living a boring life. So I’m just here to say, if I can save enough money to travel for an entire year, and I can do that in a year while living in London, one of the most expensive cities in the entire world.

You can do this too, and I’m gonna help you with all the stuff that I did by breaking this into real, tangible, actionable steps that you can apply to your own life. So remember back in step two where I had you create an analysis on your spending every month, and I had you break down your spending into the categories.

this is exactly where this is gonna come in handy because we’re gonna analyze all the categories where you are spending the most money, and what we’re gonna do is we’re gonna try to cut those down so that you’re spending less, so that you can save more. So the first thing that we need to look at cutting out, and I feel like this is probably going to be very obvious, but I also feel like it just needs to be said because there needs to be a little bit of tough love, but you need to stop spending your money on unnecessary crap.

Especially stuff that you are not going to be taking with you in this year off that you’re going traveling. So for instance, let’s start with number one thing that we could cut out Amazon Prime. What are you using Amazon Prime for? If it’s to buy a bunch of stuff that you don’t really need and you’re not gonna be taking with you like gadgets for your home, or home decor or clothes, et cetera, et cetera, you do not need that Amazon Prime subscription.

That’s just gonna encourage you to buy more stuff that you do not need. And the second part of Amazon Prime is like the music and the tv. Is there anyone out there that actually uses the Amazon Prime subscription? Like to watch TV and to listen to music? Because I know I don’t like, I use Spotify and I use Netflix and Hey, you way more than I use Amazon Prime.

So let’s start by, can we cut out just unnecessary spending on things like Amazon, so things that we don’t need for our house or for ourselves, and things that we cannot take with us when we go traveling. The second thing that I really had to cut back on when I was saving the money was clothes shopping.

I used to love going clothes shopping, but again, I was not taking an, an entire mountain of clothes on my back in my backpack when I was going traveling in Southeast Asia, and I was going to a very warm tropical climate where you don’t need loads of clothes and loads of layers like you might do in London or in the winter, wherever you live.

So I stopped buying all these unnecessary clothes that I just didn’t need, and I only spent money on clothes that I actually needed to take with me when I was going traveling. So, for example, I said it was a tropical climate. I spent a lot of time at the beach, and I live in London, so it’s not like I had loads of bikinis lying around or loads of bathing suits.

So I did invest in a couple like nice bathing suits for myself for the year because I knew I would literally be living in them for the entire year. And I invested in a good pair of tennis. Because that was necessary for all the hiking and the walking that I was gonna do. But yeah, I didn’t spend, I really cut back on my spending on clothes.

The other part that I really cut back spending on and where I think you will be very surprised that you are also spending a lot of money on and that you can really save if you actually pay attention to this. Is on food. So remember back in the categories where I said I wanted you to break this down between eating out versus eating in or eating takeaway as opposed to just cooking your own home cooked meals.

This is because I found that I was just spending an insane amount on eating out. And also you’ll know like if you buy wine or alcohol when you go eat. That’s usually like easily 30 to 50% of your bill right there. It’s the alcohol that really gets you. So I wanna look at your food spending and what you could possibly cut out and save.

So for example, for me, I was going into work every day and I was buying a minimum two pound 50 coffee. Like I was going to Starbucks or pre, and I was spending my money on coffee. So let’s just do some quick math there, right? So, okay, let’s say I was spending two pounds 50 on coffee every. and I was doing that five days a week for the entire year.

And I say I was doing this minimum one times a day. So if you’re doing this more, you’re gonna get more for your money here. Okay, so let’s multiply that that out. Two pounds 50 a day, five days a week, 52 weeks per year, 650 pounds that I was spending on coffee. Minimum that is easily a month or two of accommodation in Southeast Asia.

It depends what your budget is. But something as simple as just cutting out buying coffee out every day, that’s just gonna get you a month of accommodation somewhere. Like, that’s great. That’s exactly what we wanna do here. So if there is free tea and coffee at work, you’re gonna be drinking that for the year.

Okay. And I’m not saying you have to cut it out completely, but you definitely need to cut. I cut it out completely so I got more bang for my book. The coffee and the machine at work wasn’t the greatest, but I just got used to it. You’ll get over it guys. It’s fine. And you can go to Pret or Starbucks like here and there, like treat yourself every now and then.

I’m not saying like you can never go again, but you really need to scale back. Okay. So in the same vein as that, I was looking at the amount that I was spending on lunches out while I was at work. And in London it’s usually like 10 pounds minimum to go buy your lunch out. Okay, so here’s two things that you could do.

You could just buy the meal deals that they do at the grocery store. So like, I think it’s Tesco that they do the three pound meal deal, or maybe it’s like four pounds now with the insane inflation that we have. But a drink, a bag of crisps and a sandwich, three pounds, 50. You could just do that every day.

But what I did since I love cooking is that I would make my dinner, but I would make enough for like four servings and I would be really good about eating my leftovers. Let’s look at like the food for lunch. So let’s say you were spending, okay, let’s say 10 pounds for lunch. So that is 10 pounds per day, again, five days a week, 52 weeks a year.

That’s 2,600 pounds. Oh my gosh. That’s like, that’s an insane amount of money that you could be saving right there. But okay, we still have to eat lunch, right? So let’s cut that in half. So let’s say that we cut our spending down two five pounds a month. 1300 pounds right there that you are saving. Again, that’s like three months in Asia maybe, depending on your budget.

So just by looking at the money that we are spending on lunches out and coffee, we have now saved up enough money for. Three to four months in Asia, that is insane right there just from food and coffee. So again, I mentioned that I really like cooking and I really like making dinners that I would have leftovers from when wouldn’t be enough for like four people or four portions.

And I would encourage you to just go online and just Google cheap meals because there are tons and tons of websites. There are influencers that you could follow that teach you how to make food on a budget. Big meals that you’re gonna get more bang for your book and it’s gonna last a lot longer.

Literally, all you have to do is go on Google and type in cheap meals and just see what comes up. So some really good resources that I use are literally just the shop websites themselves, like the grocery shop websites like a Sansbury’s. They’ll have entire sections dedicated to meals on a budget or large meals that go further.

You could find there are plenty of influencers online where this is their specialty. One of my favorite ladies is called Fed and Fit, and she does this really good book called Cook Once Eat All Week. And that’s great for someone like me who’s just one person. Her recipes literally feed like families of four or more.

But I can make one of her recipes and it’s gonna last me multiple meals and I could like put some stuff in the freezer. And that actually just reminded me when I was talking about Sansbury’s earlier. . We do not need to be bougie grocery shoppers on our year of savings, okay? There is no reason that you need to go to Whole Foods or mns or Waitress to buy your groceries when you can get the exact same quality and the exact same thing at Sansbury’s or Asda or Little.

Oh my gosh. You guys, if you do not shop at Little and Audi. You are doing yourselves a disservice because the quality of produce and meat that you can get at Little and Aldi, and this is literally not an advertisement, but I did find that you can get very good quality stuff there. But yeah, we don’t need to be bouie grocery shoppers.

No, that is not for us. . Okay. So the other category that I told you guys to list down was the entertainment category, and this was one that I found a few good things to cut out. So I actually had a lot of subscriptions going that I never really used or wasn’t really getting that much out of. So for example, let’s see, like I mentioned before, the Amazon Prime membership, like I really wasn’t using that that often, so I just cut that out.

This one might be controversial depending on, you know, how much of a gym bunny you are. Let’s just be honest with ourselves. If we are never going to the gym and we are still spending 30 to 50 pounds on a gym membership every month, just stop. Just be honest with yourself. Go to the gym and just break up with them, and when they ask why, just say, it’s not you, it’s me because that literally happened to me when I decided to end my gym membership.

You can go outside and move your body. You can go outside for a run. You can buy a yoga mat. You can do yoga in your own home. There are so many free great YouTube videos where you can do workouts at home. You can just buy like a pair of dumbbells if you want some weights and do that at home. So I actually found a really good dance class that I loved on YouTube, which is again free, and I had a yoga mat.

I found loads of good yoga videos on YouTube. You do not need a fancy gym. You do not need a gym membership. You can do this at home if you really wanna stay fit and you’re really dedicated to it, like you’ll find a way without the gym. Other subscriptions you could cut out would be Netflix, Spotify. Hey, you.

Not that I’m advocating for illegal downloads, but you know, like things are out there online, you don’t necessarily need to pay like 10 to 20 pounds a month for this. But yeah, when I went traveling, I think the only subscription that I kept with Spotify, because when you’re in those long bus rides or those long plane rides, you’re gonna need something to download to keep you entertained.

And I used a lot of books like to keep me entertained instead of these subscription services. So, Ooh, another subscription that I cut out. This kind of ties in with food, but I was doing a lot of Hello Fresh. When I was doing my food shops because it was just more convenient, but those aren’t actually that cheap per meal.

It kind of works out to the same per meal as if you were to just go out and eat a meal out. So maybe look at the spending for the Hello Fresh or the food subscription recipes, like do you really need that? And do you do things like coffee subscriptions or maybe a flower subscription? I don’t know.

Whatever kind of subscriptions you have. Take a good hard look at it and see if you can cut it out. So the other entertainment things that we talked about before, like the bar, the movies, the sporting events, I mean, that’s really gonna be up to you. It’s like how social do you still wanna be and have that social life versus how much do you really wanna cut back on that?

I really don’t want you guys to be a hermit. I was still going out and having a social life, even though I was still trying to save money. I just cut back on certain things. So one of the other categories that we talked about before was the transportation category, and that is how much you’re gonna be spending on your car or trains if you take public transport or taxis.

So this is gonna, you probably already know what’s coming, but if you are spending a lot of money on things like Ubers or taxis, and you could be getting public transport instead, which is. Half the price or even more, then you need to just be more strict with yourself and take the public transport instead of the ridiculously expensive Uber.

And if you own a car, I mean, you probably own this car because where you live. That’s just what you need to get around. But I guess I would just challenge you here. If you have a brand new car and you’re making very high payments on it each. , do you really still need that car? Is it maybe time to downgrade, maybe sell the car and just get a used car that’s just gonna get you from point A to point B?

I don’t know. I don’t know your particular situation, but maybe one to think about. And also if you’re just driving it around a lot for fun, maybe think about scaling that back, because obviously the price of petrol nowadays is insane and through the roof. So do you really need to drive it five minutes down the street to the grocery store when maybe you could just walk?

I don’t know. Up to you. Okay. So the other category that we talked about before was rent slash mortgage and this category is a little bit harder. It’s probably the most hard to flex here because like we all need to put a roof over our head. But I guess we can like kind of think about where we can make cut.

So maybe if you have the option, and this is something that you would be open to instead if you’re just renting, instead of continuing to pay that rent, maybe there’s a family member that you could move into. Maybe you could move back in with your parents or move in with a sibling or a cousin, and maybe they could work out a deal with you to pay a little bit less rent than something that you would just be paying to like a private landlord.

On the flip side, if you live by yourself, maybe you could consider. Living in a flat share instead. Or if you live by yourself and you have a second room, maybe you could rent this out, you could sublet it to someone else so you have a little bit of money coming in. And that goes the same way. If you own a house, if you have a little bit of extra space and you wouldn’t mind living with someone, then maybe you could rent that out to get a little bit of extra money and save some money on your mortgage.

And the last tip that I wanna share with you on how to save money, and this is probably my biggest tip and my best piece of advice here. Okay, so this is how I saved the most money. This is how I got the biggest bang for my. I did not travel for the entire year leading up to my year off, and this was so, so, so hard for me guys because obviously I love to travel, but I did this for two reasons.

Okay? So the first reason was I was obviously saving money because I wasn’t spending it on flights and accommodation and you know, spending money when I go to these different countries and I was able to stick to a budget easier. But the second reason that I want you guys that maybe you haven’t thought about is if you are employed and you have an allocated number of vacation days or annual leave, whatever you wanna call it, if you do not take all of the annual leave that you are allocated for the year, by the time that you leave the company, your employer has to pay all of that money out to you in a lump sum when you.

So let’s just do a calculation here really quick. So what I want you to do is take your before tax salary, so just your whole salary that they quote you when you start, take that, divide it by 260, which is roughly amount of the number of working days per year, and then take that number and multiply it out by the number of vacation days that you are allocated during the.

And that is gonna be your pre-tax lump sum that your employer is gonna have to pay out to you when you leave, if you don’t take any of that time off. Now, to get the amount that you’re actually gonna get into your bank account, you need to take out taxes. So maybe it’s like 20 to 30%. So take 20 to 30% off of that lump sum amount.

You’re gonna get that whole chunk of money when you. And that’s what I did. I saved up all my vacation so that I would get that whole paycheck when I left, and that was a great income to have when I was traveling around Southeast Asia. So this is just a rough calculation. It might not be exact, but it’ll help you at least see about how much you could get if you did this.

Okay, so we’ve analyzed all of our spending and all the different categories, and we’ve figured out maybe where we can save a little bit more money and cut back.

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Step 5: Set a monthly spending budget

So what I want you to do now, and this is the last final step, is that I want you to come up with a realistic spending budget for yourself each month using all of that analysis that we did on what we’re spending our money on, like in food, entertainment, rent, et cetera.

So come up with a number that you think that you are actually gonna spend per. . And then I want you to take that new revised spending amount and plug that back in to the monthly analysis that we did in step two, where we looked at our income and our expenses. Plug that new expense budget into the expense number and see what the new amount is that you think you could save per month.

And then multiply that out per year and see how much your new estimate is for how much you think you can save between now and when you actually go take your. And don’t forget to add in as income the lump sum that you would be getting if you didn’t take the vacation days or all of the vacation days from your employer.

And I hope that it’s more, I hope that this entire exercise has helped you pinpoint and see where you might be spending your money and where you think you can actually cut back and save more. And I’ve actually gone a step further here and because I wanna help you guys out and because I’m an accountant and I love Excel, what I’ve done is I’ve put together a very simple, easy, interactive spreadsheet, and I’ve put that up on my website that’s gonna walk you through all of these steps and you just have to plug numbers in and it will do all the calculations for you.

So you can find that on my website@travelwriter.net. So www.travel writer.net. There will be a link at the top called Travel Budget Template and you can just download that to your computer. And again, it will be very easy to use and you just have to plug a few things in. I’m also gonna write up, All of this in a nice little blog post, and I’m gonna put that up on the Travel Writer website as well so that you can send it to your friend if they don’t really like listening to podcast.

Or you can just refer back to it if you like reading rather than listening. And that is it for today. I feel like we covered so, so much. This is exactly why I needed a podcast to discuss. This topic, because there is so much information, there’s not enough time to put this into a real or a TikTok to share on social media.

So if you like this episode and you wanna hear more, just hit the, like, the subscribe, the follow button, whatever it is in whatever platform you’re listening in, and there will be loads more episodes coming. Soon. Thanks again for listening, guys. I’ll speak to you guys soon.

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