In the lead-up to our big around-the-world adventure last year, we wrote extensively about the various strategies we used to save the money needed to fund several months of travel. The end result?
We saved over $30,000 in just 12 months.
People often ask us how the hell we managed to save so much in such a short amount time and the truth is it wasn’t really that difficult. Boost your income, significantly slash your expenses and have a lot of self-discipline and you’ll be following in our footsteps in no time!
Here is a comprehensive guide detailing the five primary ways we saved that much money in just twelve months time.
1. Use A High-Interest Savings Account
Living in Australia where the economy is strong compared to the rest of the world, we were fortunate enough to receive 6.51% interest on our savings accounts with UBank. When our savings accounts were at their peaks, we were receiving over $150 in interest per month between us, which was a major bonus for any savings account.
ALWAYS put your savings into a separate account that pays some kind of interest! Not only does it make it harder to access and spend, you’re also missing out on easy money that is generated by your savings.
2. Pay Yourself First
This is one of the best personal finance strategies you can use. When looking at your monthly bills, the first bill you should pay is to “yourself” (or better yet, into your High-Interest Savings Account).
Calculate how much you can afford to save from each paycheck and transfer it as soon as you get paid – no excuses! Regardless of how much you’re putting away, you’ll be able to watch your savings account grow at a consistent rate and that will motivate you to save even more.
3. Suck It Up – Move Back In With Your Parents
(aka Eliminate Your Rent/Mortgage)
When we started saving for our trip, we were living in a nice apartment together and our monthly living expenses were around $2,000 (including a monthly rent of $1300). The two of us moved back in with Amy’s parents in December 2010 and slashed the majority of that expense which boosted our savings accounts by just under $10,000 in 6 months.
There’s no way we could have traveled the world if it wasn’t for this move.
4. Slash Your Unnecessary Expenses And Bank The Savings
You’ve probably heard these all before – bring your lunch to work, skip the morning latte, cancel your cable subscription, drink ice water instead of soda, yada, yada, yada.
The difficult thing is actually putting these actions into practice. But believe us when we say that the savings do add up over the long run and if you’re transferring these directly into your savings account then you’re on the right track!
5. Generate Extra Income
So you’ve already cut all of your expenses back as much as possible but still need to boost up your savings account? Then earn some extra cash!
We sold a lot of our belongings on eBay (over $2000 worth) and Kieron did plenty of freelancing web/graphic design work where possible. The two of us also some income flowing in from advertising on this site although we could always do with more for the next adventure (hint, hint advertisers).
Every little bit of savings helps and if you follow all of our advice above then we guarantee that you’ll be on your way to your next big travel adventure a lot sooner than planned!
Some other handy personal finance tips from last year’s Frugal February:
- How many days in Thailand? – Compare your expenses to how many days in Thailand would cost. For example, that new pair of jeans might be equivalent to a night’s accommodation and food.
- Stay away from malls/shopping centers to save money! – Simple advice: if you’re obsessed with shopping then avoid temptation.
- Save money by reducing your Vampire Power – Did you know that keeping your devices on standby power can use an extra $50-$80 per month in electricity? Unplug those appliances and watch your power bill drop.
If you have any other great tips, please share them in the comments below.