Everyone makes choices in terms of how they choose to spend their money. I am usually choosing to spend it on travel.
By now, this is somewhat of a habit; I’m used to these trade-offs and don’t even really think about them anymore. To an outsider though I know it can seem a bit of a mystery. “I spend all the money in my paycheck, how can I save any?”
Simply put: stop spending money without thinking.
Everyone has a list of things they are unthinkingly spending money on. The idea is to examine each of these things and decide if that really is how you want to spending it, or if spending it on… say…. a flight to Southeast Asia is more interesting to you.
These are the things I’ve been able to examine, and cut, from my own budget:
- No cable TV. I gave up cable tv a few years ago, and have never looked back. I bought an antenna to watch local news, and have Netflix and Amazon Prime for my streaming needs. I don’t miss it at all. This represents at least $100/month.
- No landline phone. I had one installed when I first moved into my apartment, but cancelled it a couple years ago. Savings: $30/month.
- Brown bag lunch to work every day but one day a week. This saves $150/month.
- I don’t buy coffee drinks every day, I make it at home before I leave. $100/month.
- I go out for few big restaurant dinners; I do get takeout once a week and do occasionally have dinner out with friends, but it’s not as often as most folks in San Francisco. This probably saves ~ $200/month.
- No DVDs. Ever. I don’t buy them. I also buy little new music, listen to Pandora or Spotify instead. I buy few new books, usually only ones related to upcoming trips. New clothes only if I really need them. This probably saves $200/month as well.
So what does that total to? $9360 a year. Yep, I checked the math. There are probably a few things I’m not listing here that I’m not even thinking of cause I don’t regularly spend money on them, so I bet you could stretch this to $10,000 if you really tried. You save that, and you’re going to be going on a couple (or three!) nice trips every year.
It’s all about your priorities. It really is. Do you really want to travel? If you do, you can make it happen. I was doing an international trip (and a couple of domestic ones) every year when I was making less than $30k. It was rough, don’t get me wrong. I was eating beans and rice and shopping at the discount grocery store, but it’s possible.
One of the best ways to get started I think is to decide how much money per month you’re going to save, let’s say $250/month to get you started. Cancel cable, or the landline, or whatever else you have to do, then set up your direct deposit to put $250 into a savings account every month. That way, you don’t ever see the money, and it’s not there in your checking account tempting you.
Do that for a while, then cancel something else. Cut down on going to the movies, stop shopping as a way to spend your weekend or hang out with your friends. Start bringing your lunch to work. Crank the savings up to $500/month and keep going.
You should still have treats, don’t get me wrong. Get lunch with your coworkers every Friday. Get takeout sometimes. Go out for happy hour. But make these choices consciously, knowing what the trade-off is.
Then book that flight to Bangkok.