Friday, February 3, 2012

How I Can Afford to Travel the World

If you read my last post, you know that two years ago I was deep in debt and had exactly $0 in savings.

So how was I able to quit my job two months ago to plan the round-the-world trip that I'll begin this Sunday?

And how much money do I have to spend on this trip, anyway?

Here are the short answers for those of you who don't want to wade through this whole post:

  • a lot of self-control, some extra effort and a bit of good luck
  • $26,000

Interested in learning more? Read on, my friends.


LET'S START WITH THE LUCK

I was desperate to find a job after I graduated college, and in the fall of 2009, I began working as a proofreader at an advertising agency. 

It wasn't my dream job — I had studied journalism and was unsuccessful in my this-close attempts to land a job with The Seattle Times — but it was work, and I was in no position to be picky. I had big credit-card payments to keep up with, you know.

This particular ad agency paid quarterly bonuses to all employees once they had worked there for three quarters. I began earning bonuses in July 2010 (after I had already become debt-free), and I collected six bonuses during my time there.

Each bonus was in the mid-to-high four figures, and a few were five figures. Altogether, they more than doubled my annual salary.

I consider that to be very lucky indeed.


NOW FOR THE SELF-CONTROL

I could have easily raised my standard of living to meet the amount of money I was making. I could have bought a new car, upgraded to the latest iPhone every time one came out and updated my closet with nicer clothes. It seemed like many of my co-workers did just that.

Instead, I continued to live on my base salary (less than $30,000) and squirreled those bonuses away in my savings account. Maybe I wasn't the coolest kid in town with my 1993 minivan, my lack of an iPhone and my arsenal of cheap, plain t-shirts, but I had more than $10,000 in the bank by the end of 2010.

I eventually gave myself permission to spend money on some stuff — including expensive stuff — but only if that stuff was really important to me. In 2011, I bought a new laptop and a DSLR camera, entered several road races and traveled to Hawaii, Portland, Vancouver, B.C., New York City and Las Vegas.

Sure, I would have a lot more money in my travel fund now if I hadn't spent money on those things, but I don't regret a single penny. Every purchase and experience was planned and meaningful; none of it was frivolous shit.

OK, maybe this beer was frivolous, but I stand by it, too.

Plus, it kept things exciting when the ultimate goal — a round-the-world trip — seemed so far off in the future.


A LITTLE EXTRA EFFORT GOES A LONG WAY

It was awesome to watch my savings grow by leaps and bounds every three months, but I felt like I could be saving even more.

In July 2011, I took a good look at my fixed monthly expenses and realized I had no immediate need for $350 of each paycheck. That's an extra $700 a month, or $8,400 a year! (I guess I lived wayyy below my base salary.)

I immediately opened an ING Direct savings account — nickname: Freedom Fund — and set it to automatically withdraw $300 from my checking account each payday. I decided to save $300 per paycheck instead of $350 just to give myself a bit of a cushion.

Guess what? I never missed that $300 per paycheck. Not once. 

I continued contributing to the Freedom Fund all the way through the final paycheck I received on Nov. 30. The account now holds more than $3,300. That represents thousands of dollars I never missed, but easily could have wasted on a bunch of little things if it had remained in my easily accessible checking account.


PRIORITIES, PRIORITIES, PRIORITIES

I had planned to continue working through 2012 to become fully vested in my employer's 401(k) match, but I became absolutely miserable and just couldn't stick it out.

By changing my initial plan, I missed out on adding thousands of dollars to my 401(k) and tens of thousands of dollars in bonuses to my travel fund. At first, I felt crazy to give it all up.

But it just wasn't worth another year of my life. In this video, I said, "Over the course of my life, I can make the money back. I just can't get the time back."

You know what, though? I doubt I'll ever make that money back, and I'm not at all torn up about it. I will never regret my decision.

My friend Mike Krass once left this incredible comment on my blog: "No matter how rich or poor, young or old, wise or foolish you are, there is no force powerful enough in this world to recover time for those who have let it pass them by."


BACK TO THE MONEY I DO HAVE

See how easy it is to get caught up in the money you could have, no matter how much you already have? Ugh.

$26,000 is quite a bit of money and I'm happy to have it. (This is what I have after being unemployed for two months and paying for all of my pre-travel preparations, by the way). It may not be much to speak of in terms of getting by for a year in the U.S., but it's more than enough to have some fun around the world, especially while traveling in developing countries. (Check out Shannon O'Donnell's detailed RTW budget — it cost her about $18,000 to visit 15 countries in 11 months.)

I'm operating with a fixed amount of money, though, with no current plans to make more money as I go. My travel fund will only go so far, and I have to consider how much I'll need to return home, if that's what I end up doing. Who knows!

It'll definitely be a challenge to keep an eye on my spending while also making sure to enjoy myself. That's why I'm going to New Zealand and Australia first — they're expensive! I want to visit them while I still have plenty of money.

I plan to use these frugal strategies throughout my travels:

  • Stay in inexpensive hostel dorms and guesthouses
  • Couchsurf
  • Cook my own food when I have access to a kitchen
  • Seek free Wi-Fi or use my Kindle 3G to connect
  • Refill my Klean Kanteen instead of buying bottled water (and use my SteriPen in areas with unsafe tap water)
  • Use my credit card that has no foreign transaction fees (Marriott Rewards Premier Visa — also earns points that can be converted to miles)
  • Redeem points and miles for major flights
  • Travel slowly and overland as much as possible

Feel free to add your money-saving travel tips in the comments!

I've loosely planned my trip through July, and the rest of the year is open. If I still have money to travel by then and I'm not sick of life on the road, I'll keep going. If not, I'll do whatever I need to do.

I consider myself extremely privileged to be able to travel for any amount of time, let alone for a full year. I'll do my best to stretch my money far and wide, but no matter what, I'll have a hell of a time.

***

I plan to put together a post about my packing list this weekend and set it to post on Monday. After that, full blog posts will likely be few and far between due to my uncertain access to Internet.

I should be able to update my Twitter and Facebook page via the Kindle 3G, though, so check them for updates!

There are only two days to go until I depart. While many of you are watching the Super Bowl, I'll be in the air heading to New Zealand!

Let me know who wins. : )

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25 comments:

  1. Hey Devon,

    As someone who is embarking on the pay off debt/save to travel journey this post has been super helpful.

    As someone who has been to Australia twice I can recommend the really great tourist centres where you can pick up a ton of vouchers for exhibits, restaurants and trips. That saved me lots of money and I got to do all the 'must do' things. Also if you end up in Melbourne hit up the excellent markets for fruit, veg and meat which are just amazing and so much cheaper than the stores. If you need any more Melbourne tips or recommendations then just drop me an email.

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    1. Thank you for the tips, Laura! I'm excited for you to head back to Oz. : ) Seems like a lot of people move there or are extremely enthusiastic about living there, so I really look forward to discovering what all the fuss is about!

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  2. Devon

    Super excited that your plans are finally coming to fruition!

    Check your email -- just left you a present for Australia. Don't ever hesitate to ask for anything should you need it.

    Best of luck,

    Mike

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    Replies
    1. Mike, you rock. I'll definitely be taking advantage of your email! Thanks so much, friend.

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  3. I am so excited for you! Can't wait to read all about your adventure!!

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  4. Very excited to follow your trip. I've been to Australia but never New Zealand or SE Asia. I have no doubt that your pictures and posts will be phenomenal.

    I get the same question about traveling and money, most recently from one of my students (the subtext being, "you're a teacher, how can you possibly afford it?") My answer is always: traveling doesn't have to be as expensive as you think.

    On the road, I often buy food from supermarkets and eat picnics in parks. If I can find a way to get my trip paid for, I do that, like the time I spent five weeks in South Korea teaching English. I can also absolutely vouch for couchsurfing.org I've been on the site since 2006, and I've used it to surf all over America, once in Peru, and I've hosted several times here in New Jersey. It's saved me thousands of dollars in hotel/motel/hostel fees and put me in contact with all kinds of fascinating people from all over the world.

    When I'm home, I live frugally by having a small wardrobe, cooking most of my meals at home, owning the same car for the past decade, etc.

    Best of luck on your trip!

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    1. I think being frugal with food is going to make a big difference in my spending. And I've heard such great things about couchsurfing.org — I need to create my profile and start looking for places to crash! Thanks for your tips, Scott!

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  5. I am so excited for you! You are young and smart, and I have no doubt you will have no regrets. Excited to read along and see where you land. Seattle will miss you!

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    1. Thanks, Emily! I'll miss Seattle, too... it'll always be home to me. : )

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  6. I can't wait to read about your adventure!! Also, our conversation about credit card debt when we met last summer (and reading about how you did it) is inspiring me to do the same.

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    1. Thanks, Theodora! I can't even tell you what a load off it is to pay that last debt down to $0. It's worth every sacrifice. Good luck to you!

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  7. Hello! A friend told me about your blog and I love the name. Mary Oliver is one of my favorite poets and that line is one of her best.

    My husband and I live in Portland and are also about to start a trip around the world (in May).

    I just wanted to say hello and wish you the best of luck. I'll be following along.

    Kim- www.so-many-places.com

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    1. Thanks for saying hello, Kim, and good luck on your trip as well!

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  8. HUGE congrats! I'm heading out to Southeast Asia tomorrow for two months (maybe more? who knows) so if our paths cross in Thailand (especially if I can make it through Songkran) I'd love to say hello! Have a blast down under!

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    1. Thanks, Monica! I'd love to meet up. I hope to spend quite a bit of time in Thailand, so I bet we could make it work!

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  9. Congratulations and keep the good job: you deserve it!

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  10. Good luck ,you seem like a great girl with a Big heart.
    Niall Doherty linked me here and I'm glad I followed the link..I'll follow your adventure.

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    Replies
    1. Thank you for the wonderful compliment. : )

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  11. Devon,

    Lovely story.

    I was looking for a way to send you an invite to my blog ivblogger.com as a guest on ma show couldnt find any.

    Sheyi

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    Replies
    1. Thanks, Sheyi! You can email me at devmills5@yahoo.com to figure something out if all else fails.

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  12. Congrats on your RTW trip! Saving is one of the hardest parts of pre-trip planning, especially when you're not leaving within a year. I'll be following along! Happy travels!

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    1. Thank you! Yes, saving was tough, and it's also tough to watch the one-way outward flow of money as I travel... eek!

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  13. This all sounds really awesome but reality is that once there's no more money there's also no more travelling.
    I was wondering if you had any plans on what to do once you're back home and left with little money.
    Are you planning on going back to work again or are you planning on making an income while traveling to keep going on?

    Best of luck on your travels!

    ReplyDelete

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