Calculate your travel budget.
How much is the whole trip going to cost? Roughly figure that out and divide that amount by the number of months or weeks you have until you plan on going. Then you’ll have the amount you need to set aside each month.
If your travel budget is 15,000 USD, then you need to set aside 1,250 USD each month. If you are going to leave in 12 months. When I was saving up for my trip around the world. I found several websites that really helped me out. First is A little adrift, in her post she goes over her budget and how much she’s spending on her trip around the world. The quest for awesome does an amazing job in his post going over the costs of traveling the world for a year. There is also Airtreks, a travel company. They brilliantly cover how much it could cost to travel the world. Last but not least is Budget your Trip. I found it really helpful when trying to figure out what each destination could cost. They list what each destination costs per day and you can pick from three levels, Budget, Mid-Range, and Luxury. I always opted for mid-range just to be safe.
Calculate your expenses.
What are you spending on? How much of it isn’t necessary? Figure that out, so you know how much you can afford to set aside each month. Write a list of all your expenses. For example monthly expenses:
Electricity 3000 KR | 29 USD | 25 EURO Heating 3000 KR | 29 USD | 25 EURO Rent 180,000 KR | 1,742 USD | 1,475 EURO Internet 6000 KR | 58 USD | 49 EURO Gas 33,000 KR | 319 USD | 270 EURO Food 20,000 KR | 212 USD | 180 EURO TOTAL 245,000 KR | 2,371 USD | 2,000 EURO
The above is simply an example. Let’s say that for someone that makes 300,000 KR | 2,903 USD | 2,495 EURO a month. They are spending a total of 245,000 KR | 2,371 USD | 2,000 EURO a month on necessities. That leaves them with 55,000 KR | 532 USD | 495 EURO to spare. Now you know how much you can afford to set aside after all the necessities are paid.
Cut back on non-essentials.
Instead of going out to eat with your friends. How about you invite them over for dinner. It’s cheaper, especially if you do it as a potluck. Plus, it is more fun. Much like instead of going to the cinema to see a movie. You can watch a movie at home. It’s actually better since unlike the cinema, you lay in your PJ’s the whole time. Little things like eating out, heading to the movies, happy hour, etc. It all adds up fast. Wouldn’t you rather spend all that money on skydiving or even surf lessons? You know villa’s in Bali can be crazily affordable.
Start a travel account.
Having a specific account dedicated to your travels simplifies things. If you have all of your money there, then it is easy to see how much it is. It’s also safer when you are actually traveling around the world. You then simply transfer money to your main account when you need it. The reason I’m recommending this is because I did this for my trip around the world. When I was actually traveling I was so grateful I did. Loads of times, some people were trying to steal your wallet. Although mine never got stolen, people I know had theirs taken. Which made me feel safe that all my money was in a separate account from my debit card.
Sign up for an airline credit card.
Since you will be traveling around the world, you will be a frequent flyer. If you use the credit card to pay your bills and as much of your trip as possible. You can easily rack up a bunch of airline miles. If you manage to rack up enough, you can either get a discount on your flights or even get a free flight ticket.
Barry over at The Simple Dollar has you covered and listed all the best airline credit cards for this year. If you are Icelandic then I highly recommend the American Express Iceland Air card. Yes, it the yearly expense of it is pricey. However, if you use it well, then you will reap great rewards. Trust me! I have the Premium, and it is amazing. You can easily go over to Kreditkort and sign up.
Get a side gig.
Whether it is another job or maybe even selling something homemade. Are you a great baker? Brilliant photographer? Are your friends always asking you either for advice or help with something specific? If you have certain skills that you think people might be willing to pay for then doing that can earn you extra money. You can easily advertise your services on sites like Fiverr. Where you the starting rate is 5 USD but for more special stuff you can charge as much as you want.
Sell your stuff.
Is there anything you don’t use anymore, but it still works fine? Have any clothes or shoes that still look great, but you don’t ever wear? Then sell it! Everything you own and never use is simply taking up unnecessary space! Have a mini-garage sale or advertise online. It may surprise you how much money you can quickly save up this way.