Have you ever wished you could put your life on hold, pack a bag, and spend a year exploring the world? It’s easier than you might think. And, with a little financial preparation, the trip of a lifetime can actually cost less than living at home.
In the span of three years, I visited forty states, bunking everywhere from disaster relief warehouses and lively hostels to gorgeous private estates and wilderness haunts.
I worked offbeat jobs that were adventures in themselves, or I slept, ate and traveled for free as a volunteer. Most of the time, I could go wherever I wanted, whenever I wanted – all on a yearly income of less than half the poverty level.
Anybody can do it. The hardest part was getting started. Here’s what you’ll want to consider before launching your own escape.
Determine how you want to travel
Everybody has their own style of travel, but they all follow the same financial rules. Generally speaking, the faster and more comfortably you travel; the more pre-packaged experiences you choose; and the less you share major costs like housing, transportation, and food—the more you are going to pay.
Spending money on speed and privacy, greater comfort, and ready-made experiences is not at all a bad thing if that’s what’s important to you. Just like in everyday life, smart travel budgeting isn’t about not spending. It’s about spending on loves, not likes.
It’s important to note that you don’t have to stick to just one style of travel. You can mix and match. I’m the kind of guy who enjoys sleeping in a tent, or a stable, or on a buddy’s floor for a couple of weeks at a stretch, then spending the savings on a few nights living large in an urban paradise. Every style has its own particular pleasures.
Slash your expenses
If you haven’t already made an everyday budget with a tool like Mint, Cleo, or Charlie, do that first. Once you’ve got your everyday budget, take a look at your current expenses, especially housing, utilities, food, and transportation costs.
During a long trip, you’ll want to avoid paying for anything twice in these categories. Paying rent, utilities, and insurance on an apartment in your hometown, and paying for an Airbnb in San Diego on the same day is a double cost.
If you have a home lease, sublet your place or plan your trip to coincide with the end of the lease. If you have a vehicle you won’t be taking with you, sell it, or ask your insurance provider to switch your coverage to storage insurance. Eliminate gym memberships, magazine subscriptions, and any other location-dependent services and roll those funds into your travel budget.
Preparing for a long trip is also an excellent opportunity to downsize your stuff. Why pay to store things that are so unimportant you don’t care if you see them for a year—especially if they could be sold to fund your trip?
Automate your financial life
The last thing you want while you’re skydiving over the Badlands is to be worrying about whether or not you paid that health insurance bill. Once you’ve slashed your expenses and determined exactly how much you’ll be paying each month for nonnegotiables, set up your bank accounts and credit cards so that your bills pay themselves.
Set up passive income streams
There’s nothing like waking up to find money in your accounts that you did nothing (or next to nothing) to work for the day before.
Passive income can be used to extend and enrich your travel experience or pay off debt while you’re on the road. I’m a writer, so I use my blog and book, but there are endless ways to do it, from investment dividends and rental properties to affiliate marketing programs and digital products.
Setting up savings automation and passive income is one of the best things you can do to make both your everyday and travel finances easier. Don’t skip this one!
Build work into your travel schedule
It’s possible to extend travel indefinitely by working on the go—4.8 million digital nomads can attest to that.
Even if you only need a little extra income to supplement your savings, a working holiday can be a great opportunity to try new things and meet people you wouldn’t normally encounter while extending the amount of time you’re able to stay out.
Many people choose to travel and work in blocks of weeks or even months; others split up days in the week, or hours in a day. You can work for yourself, or find short term employment opportunities on the road, many of which are experiences in themselves. I got gigs building porches in the inner city, designed websites, and wintered as a farmhand.
If you’re friendly, honest and industrious, doors will open to you. I’ve met people who make a living part-time as van-dwelling illustrators, nomadic podcast hosts, seasonal off-roading guides and everything else under the sun. There’s a whole world of offbeat jobs (AKA, adventures that pay!) just waiting to be discovered.
Prepare your budget
You should now have a good picture of what your goals, expenses, and income streams will look like during your escape. Use those numbers to create your travel budget and start working on hitting them today—then you’ll be well on your way to a kind of freedom many people only dream of.