Traveling is expensive, whether you stay in hostels or not. Further more, life is expensive, which is something that I’m coming to understand more and more as I’m about to graduate from college and enter the real world. In my previous posts, I’ve written about why now is the time to travel and how you can spend less by staying in hostels. But now might be difficult for you financially, even if you cut down on travel costs with hostels. This is something that I myself am coming more to terms with as I think to myself, How am I even going to even afford rent?
With this financial stress looming over me, I decided to teach myself more about personal finance by reading the book I Will Teach You To Be Rich by Ramit Sethi. After reading the book, I’ve learned several lessons that I think can help you too in saving up and using money wisely to finance your travel goals. By no means am I a financial expert, but here are some things that I’ve learned:
1. Use an online savings account.
Did you know that you actually lose money while it sits in a regular big bank’s savings account? Interest is less than 0.1% per year, yet inflation is usually around 3%. Reading this book opened up my eyes to online savings accounts, which give you higher interest rates (around 1%) due to their lower operating costs. Personally, I’m trying to decide between Ally, the top-rated online bank with excellent customer service, and Barclays. I like that Barclays has a feature that easily lets you separate out your savings based on different goals. It’s certainly handy for saving up for travel. Even sending as little as $50/month will add up over time! Also, just having your money sitting in one of these accounts will help it grow much more than it would sitting in a big bank’s savings account.
2. Use travel credit cards (wisely).
I need to do more research on this one, but using travel credit cards can help out a lot with travel expenses. Here’s an article on the best ones right now. One of my favorite podcasts, the Extra Pack of Peanuts Travel Podcast, actually did a segment on this as well.
3. Think consciously of where you’re putting your money.
Ramit’s big philosophy of this book is that you should be frugal when it comes to the things that don’t matter to you so that you can spend extravagantly on the things that do. Keep this philosophy in mind when setting your savings goals. One way to help you keep track of this is to use the app Mint, which keeps track of your spending under certain spending categories and goals that you set for yourself.
4. Don’t be fooled by anyone.
Everyone is trying to get your money. Credit cards, banks, car dealerships. Don’t let them rip you off. Be smart, and when in doubt, you might as well try with a phone call. Ramit goes into great detail on this in his book and even has dialogues written out to help you negotiate, get money back from credit card companies and more. In the end, this can save you tremendously.
5. Get a side gig.
This is the #1 thing I’m going to work on once I’m up in D.C. All of us have hobbies and skills of some sort that we can use to make extra money. It may be challenging at first, but it can be worth it later and help you to save so much more extra money for things like travel. Currently, I’m contemplating teaching English online (one of my friends is doing this and is making great money), tutoring kids, or using my photography or graphic design skills. Ramit has great resources on this on his website as well.
Overall, whether you want to travel or not, Ramit’s book is an excellent read for anyone, particularly other young college students like myself. I knew very little about personal finance until now, and now I’m feeling much better about financing my future life and my future travels.
What are your strategies for saving money and budgeting for travel? I’d love to hear from you in the comments below!