Whilst I talked about the idea of working/studying overseas so you can generate an income whilst travelling, it’s always good to have some savings on you if not only for the initial ‘start up’ expenses, but you might still need some more money to travel even if you’re earning money abroad.
If you’re smart you’ll have already figured out a budget like I previously talked about and how much money you’ll need to save before you head overseas.
The best way is to allocate a set amount of your wage every week to a separate savings account, that you cannot touch or withdraw money from an ATM when you feel like it.
Some people are not good at savings, I like to think I am not one of those people 🙂 Ever since I started my first part-time job when I was 15, I allocated a small amount of money to my savings account every week. Even when I’m not working towards a savings goal I still allocate at least 10% of my wage to a separate account.
Making Savings a Weekly Bill
When people struggle with savings they’re often people who pay all the bills they need to pay – rent, electricity, insurance etc and then if they have any money left, they’ll put it into savings.
I believe this is the wrong way to go – especially if you want to save to travel. I don’t believe, despite what people say, that the average person does not have any money for savings, it’s just not a priority. There’s always room for the other bills in your life, no matter what comes up – so why not your personal savings?
If you can save $25 a week for a year you will have $1,300 not including the interest gained. How quickly does $25 go into non-essential purchases? Buy your lunch once a week, grab a few take away coffees, buy a chocolate bar and a packet of gum at the supermarket and – bam! There’s $25 instantly gone.
Many of us (myself included) let money fall through the cracks in small amounts of less than $5 at a time, but if you allow yourself to see those cracks – you can often find more money than you think and decide to put it to good use.
If I think about if I’d rather buy take away coffee verses seeing the Eiffel Tower – the choice is simple.
Can’t manage to save $25? Save $10, $5 – just save something consistently. If you’re having a good week financially put that bit extra into your savings.
If it’s not there – you won’t miss it
One of my teachers at high school was also a qualified financial planner and offered to run a free money course for students. One thing he said that always stuck with me was that if the money you save isn’t there in the first place, you won’t miss it.
This means that any bank can organise an automatic transfer to come out of your every day account on a certain day every week (or you can organise it yourself with internet banking). The best date will be the date you get paid, so your bank is automatically transferring $20 from your account on the day you get paid into a separate savings account.
If it’s the day you get paid, you’ll likely be feeling comfortable with the comfort of a new pay check and your ‘savings’ has already been done for you. If it’s not there – you can’t miss it.
When to Touch Your Savings
We all know that sometimes – shit happens. Shit that involves spending money and you might have to consider touching your savings for it, but what situation warrants withdrawing from your savings?
To me my personal savings is not money I allow myself touch easily – not only because I can’t withdraw the money from an ATM but because I’m very strict on what I can use it for.
The only time I will touch my savings, is if it’s between using my savings or being in debt (i.e. not paying an important bill, rent etc)
So going to a concert doesn’t make the cut, buying a new dress doesn’t make the cut – I have to use my weekly wage to fit those things into my life. If I can’t – I can’t have it.
Keeping Yourself Motivated
I personally like to stick up a vision board of what my savings plan will get me. On the inside of my closet I write up where I want to go, I add pictures of the places I will see, the things I will experience – it keeps me motivated to keep saving.
I’ve also seen friends stick on their fridge the amount of money they need to save for a trip away so they can remind themselves of their goal every day. They also write motivating messages like ‘we can do it!’ ‘keep saving!’ – all great ideas.
If you can make saving a priority in your life, you will soon be seeing that bank balance fattening up nicely.