Making Your Travel Dream a Reality, Part II: Money Matters

Today I'm bringing you another installment in my series on making your travel dreams a reality. As I started roughing out my ideas I realized there was way too much to discuss in one post, so in this one I'm going to focus entirely on money: saving for a trip, how much to save, and traveling on a budget. The series will stretch into at least one post beyond this, and possibly two. I'm not sure why the first part of this series is out of order and behind my last outfit post, but if you haven't seen it yet you might want to start reading here.



A church on the Sn�fellsness peninsula, Iceland


Now that I've debunked some of the most common excuses for putting off travel, I'm going to go a step further and provide you with some tools for dealing with each of the very real challenges that travel can present. Today I'll talk about the single biggest challenge for many people, money. La Historiadora de Moda stopped by yesterday with this very valid comment:

"I don't want to be a bah-humbug because in general I do think that people should travel and make an effort and sacrifices to achieve their dreams. However, I have to say that in some cases Excuse #1 is valid for many people. Considering the unemployment rate and the fact that many people are really struggling to make ends meet, I wouldn't necessarily recommend that they travel before they pay off their credit cards, especially when banks and credit card companies are often hiking up interest rates and charging extra fees."

This is absolutely true. I would NEVER advocate running up more expenses if you're already in debt or struggling financially. But I will say this: Americans in particular often suffer from a spectacular inability to see any but the narrowest of possibilities for their lives. I've met many an Australian or Canadian in my travels who, upon graduation, took off for 6 months to a year and traveled the globe before settling into grown-up life. These were not rich kids living on trust funds; they lived on shoestring budgets and often stopped somewhere for several months while they earned enough money to continue their travels.

If a recent college grad can do it, perhaps someone who has recently found him or herself unemployed can pull it off too. Even a hardship can become an opportunity, because it might be just the kick in the pants you need to start thinking more creatively about your options in life.

I'm not saying you ought to sell all your worldly possessions and go traipsing around the globe until the economy recovers, I'm merely pointing out that there are often many other options than our narrow ways of thinking will allow us to see. Maybe you could teach English in Japan for a year; perhaps you could find seasonal work on a ship in the Mediterranean; and yes, perhaps you could sell everything you own, pay off your debts, and get the hell out of dodge for awhile. Why not? I can guarantee that there is no thing you can own, even the most fabulous pair of shoes, that will ever equal in value the amazing memories you will make while you're traveling. So at the very least, think about it before you dismiss the option of traveling, whether it be for weeks or years or anything in between.



The ruins at Pompeii, Italy


Saving for Your Trip

There are literally thousands of ways to save money, and in the end it's probably not going to be any one thing you do, but several. Here are just a few money-saving ideas off the top of my head:

• Cancel your cable or magazine subscriptions and put that money aside every month
• Sell off items you don't need anymore on eBay
• Take the bus instead of driving and put aside what you'd have spent on gas. Better yet, sell your car if you don't need it and save on insurance money too.
• Ask family and friends to donate to your travel fund instead of giving you gifts for your birthday or holidays
• Set up a free Fat Wallet account and use your cash back rewards towards travel (obviously, don't buy stuff just for the rewards unless you were going to buy it anyway!)
• Cut out your daily Starbuck's fix and brew your coffee at home
• If you're undisciplined at saving, it's wise to set up a separate savings account that makes the money more difficult to get at. If you don't mind a bit of risk, try turning your savings into a reasonably stable stock, which can create additional earnings. ETrade and Ameritrade are both easy to use, even for the non investment savvy. And no, I will not give you stock tips!

Obviously it's easiest to put aside money that you're already used to living without, so cutting an expense and then squirrelling that money away is easier than telling yourself you need to save so many dollars per month on top of your current expenses. As a last resort, there is also the option of working a part time second job until you've saved enough. That's a pretty big step, so don't jump into it lightly; your life, your relationships, your sleep may suffer if you're already working full time. Be careful with this option, but consider it if need be. Students in particular have lots of options here; grading papers, tutoring, lab assistant positions, the campus bookstore, and so on.

You might be wondering what sacrifices I make for travel. The biggest one is that I opted not to own a house or condo. Although many people will tell you that owning a house is better than renting because you can write off the interest, you're really just spending a lot to save a little if your mortgage is significantly more than rent would be. For me, owning even a small condo in San Francisco, where the monthly interest portion alone would exceed my current rent, just didn't make financial sense to me. And then, houses can be a huge money-suck in repairs and maintenance, none of which you can write off. So I opted not to be house-poor, which allows me both the luxury of traveling every year, and living a pretty fab life the rest of the time too. It works for me, because I've owned a home before and found I didn't much like the responsibility and burden of it.



The Hall of Mirrors at the Palace of Versailles, France


How Much to Save

This depends greatly upon where you're going, for how long, and at what time of year. You will first need to do some research on whatever city or country you're considering and find out what the average daily expenditure is. It also helps to prepare a travel budget; try these free online calculators to get started:
Saving For Travel
Independent Traveler
Budget Your Trip

It also depends heavily on where you're willing to cut costs and where you're not. If you're locked into traveling in high season because of the kids' school year, then you'll have to contend with higher airfare and lodging costs, and that may mean cutting back on fancy meals and shopping. If you're willing to go in the off-season then you'll be able to save more on the major expenses, not to mention the fact that things will be less crowded. Personally I prefer to travel in the shoulder seasons, when things are slower but not entirely dead either.

A good starting point would be about $3000 per person for a 2-3 week trip, but believe me you can do it for even less. Bethany and Isaac commented yesterday that she and her husband took a 3-week trip to notoriously pricey England, France, Italy, and Greece for around $2500 apiece including airfare; it takes a bit of creativity, but it can be done. Which brings me to the next topic of traveling on a budget.



A local tango band plays for onlookers at the San Telmo flea market; Buenos Aires, Argentina


Traveling on a Budget

Your two big-ticket items on any trip are going to be airfare and lodging, so let's start with those. First off is the airfare. I generally like to book my airfare well in advance, so that it's all paid for by the time I leave for my trip. And by thinking about my trip many months before I'll take it, I have time to shop around for the best fares. Sometimes you can get a last-minute fare at a discounted price, but remember that you might pay for it in other ways; for instance, affordable lodgings might be all booked up. Keep that in mind as you're searching for fares.

Finding the best fare:

• Travel in the off season, or in a shoulder season. You will undoubtedly pay less if you don't travel around major holidays or in the height of the tourist season.
• Pay attention not only to your own national holidays, but those in the place you're traveling to. Holidays and festivals almost always mean higher airfare as well as more expensive lodging.
• Sign up for email alerts from your preferred airline, or set up a saved itinerary on multi-airline search engines such as Kayak, Expedia, or Orbitz. The website will alert you when your fare reaches a certain setpoint or changes in price. For maximum coverage, set up alerts on several different sites and with multiple itineraries.
• Don't forget about airline miles. Air travel isn't the only way to earn miles; many credit cards offer airline miles, as do hotels, car rentals, and even certain retailers. Check with the particular airline to find out how to earn miles.
• You don't necessarily need to earn enough miles for a free ticket; many airlines offer reduced fares when combined with miles, which means you need to save up fewer miles to get the benefit.
• Be flexible with your itinerary. Traveling on weekends can often increase the fare, so be sure to check prices of itineraries a few days before and after your target dates.
• Consider flying into and out of alternate airports. It might be significantly cheaper to fly into a nearby city and take the train to your final destination. Sometimes those nearby cities can be destinations themselves, so you can always build in a night or two at your arrival point.
• For the greatest flexibility, consider changing your destination altogether. Make a list of the top 4 or 5 places you'd like to visit; compare airfares, currency exchange rates, and lodging to make your final decision. Assume that you will travel again; you'll get to the others the next time!

Tall, narrow houses along an Amsterdam canal


Saving money on lodging:

Lodging often ends up as the largest expense for travelers, and it really doesn't need to be. It's just plain madness to drop $200-300 a night on a hotel room that you really should only be in while you're sleeping and getting dressed. Hostels, guesthouses, and other budget lodgings are the way to go. Here are a few things you might not know about hostels:

• They're not just for youth anymore; many hostels no longer carry age restrictions of any kind.
• Many offer small private rooms, some with private baths.
• Most have communal kitchen areas where you can store and prepare your own food, which is yet another way to save money.
• Most offer lockers for your luggage (you need to bring your own lock), or even lock boxes for valuables.
• Many do not have curfews, and I haven't seen any where they kick you and your luggage out every day like they did back in the 60's. If you're booked for several days, all your stuff stays there for the duration.
• Many offer free Internet services, and some also have free breakfasts.
• They're a great resource for finding out about free walking tours and other fun things to do on the cheap.

But honestly, the best part about hostels is that they're FUN! Although I could afford hotels, I much prefer the vibrant, lively environment of a hostel, where travelers congregate in common areas to share travel stories, show off their photos, or just drink beer and play cards. Sure, most of the people I meet in hostels are a lot younger than I am, but I've never felt like an outsider even in a hostel full of college-age travelers. I've also seen people much older than myself joining in the fun, so don't worry about fitting in. That said, I do avoid places that bill themselves as a "party hostel" because even though I do like to party, I don't want to do it 24/7. Be sure to read the reviews of each hostel before you book; many of the reviews include the reviewer's age and other information that'll help you determine if they have the same priorities as you.

A dorm bed in an average hostel can set you back as little as 10 bucks a night. Ten bucks! That's very likely cheaper than what you pay for rent at home. Even in pricey Paris, I only paid $30/night for my lodging, and that was in a very new, modern hostel in a great part of town. I enjoy the dorm rooms because they're another great way to meet people, and I'll tell ya, I prefer the mixed dorms over those for women only. Here's why: a college-age gal will stagger in at 3 am, flip on the lights, rifle through her bag of toiletries, and then proceed to march in and out between the room and the bathroom half a dozen times before she finally goes to bed. A college age guy will stagger in, fall into bed fully clothed, and pass out. The next morning, guess who's up at the fucking crack of dawn, marching in and out of the room again, and who rolls out of bed fully clothed and heads off to breakfast just before the kitchen closes? Bring on the male dorm-mates any day.

Now, here are a few hostelling sites to get you started:
Hostels.com
Hostelworld.com
Hostelling International

Be sure to get yourself a Hostelling International membership; you will save money on hostel rates, and they also offer discounted travel insurance (including some health coverage), savings on international phone calls, and all sorts of other great benefits. Another way to save money on lodging is to bring your own travel sheet or sleep sack. Many hostels provide pillows and blankets but have an additional charge for linens; your sleep sheet is like a thin sleeping bag that covers you and your pillow so that sheets aren't necessary. The silk ones are the lightest and most comfortable, and are worth the investment if you're going to do a lot of traveling.



The garbage "truck" in Montevideo, Uruguay


Other ways to save money while traveling:

• I've heard tell that rail passes can be a great way to save money on ground transportation, but I haven't found that to be the case because I'm too loosey-goosey a traveler to be sure I'll use my rail pass enough times to make it worth it. If you plan on doing a LOT of rail travel then it's probably the way to go, but I personally like to park myself in one spot for awhile and savor the culture, rather than do a whirlwind tour. I could go either way on this one.
• Save money on food by hitting the local markets and preparing simple breakfasts and lunches yourself. But remember that you'd be eating at home too, so this isn't necessarily an additional expense of traveling.
• Your hostelling card will get you discounts on museum admissions and so forth, so check the benefits before you go.
• If you're not from the EU, don't forget to take your VAT (Value-Added Tax) refund when you leave Europe! Be sure you're familiar with all the steps; the refund is substantial (up to 25%!), so look for stores that have the Tax-Free sign in their windows when you shop. Read more about the process here. It's not nearly as troublesome as it sounds.
• The Rick Steves and Lonely Planet guidebooks and websites offer all sorts of tips for budget-minded travelers. I prefer to buy a travel book ahead of time and read through it before I go, so that I'm not trying to search for information on the fly.
• Packing light will help you avoid both excess baggage fees as well as a sore back. For tips on packing, see my previous series here: Beauty Products Parts 1 and 2, and Clothing Parts 1 and 2. Take light layers that can easily be washed in the sink and that will air dry overnight, which will help you avoid spending money on laundry.
• Make sure your credit card doesn't charge foreign transaction fees. You'll have to read the fine print to figure it out, but it's worth it because the fees can be as high as 3%. Consider getting a card just for travel; many credit unions offer cards with no foreign transaction fees. Aslo, find out what your ATM withdrawal fees will be, and consider transferring money around if you have an account with lower fees.

The Mayan ruins at Tulum; Quintana Roo, Mexico


In the remainder of this series I'll talk about destinations for families, planning for time off, and other considerations for traveling. Be sure to read the comments to these posts as well; there's some good stuff here!