December 13, 2013
I know making your ‘bucket list’ dreams come true isn’t easy. Life — and bills, and work, and all kinds of other things — keeps getting in the way of our best-laid plans. But if we let life keep getting in the way of our dreams, we find ourselves one day looking back with deep regret at a life not lived according to our passions and dreams. So I thought I’d write you with a few tips for making those dreams come true. Hope you enjoy ’em! —
Mike Brcic, founder/Chief Happiness Officer Sacred Rides
How to Finance Your Adventure Dreams and Other Tips
1. Open a Dedicated Savings Account
If you are serious about your effort to fund your travels directly and methodically, rather than out of whatever is in your bank account when your travel date comes around, this is a critical step. In most cases the cost to set up an account is zero, save for a bit of your time. If you go this route, make sure you do not face any minimum balance penalties when you actually start to use and spend down the money you’ve saved. It may also be useful to have ATM and online access to the account, which will let you draw money directly from the account when booking and while you travel; this keeps you from mingling your regular accounts with your “trip money,” guaranteeing that the money you set aside for the trip is the money you actually spend. Using a single, dedicated account will also help you keep on budget during your trip, as the easiest way to know how much you are spending is to track the balance of your specific travel account. You can keep an eye on your balance as your trip progresses, and track the true cost of your trip without too much effort.
2. Then Set Up Automatic Transfers
Once you have a dedicated account set up, you have to fill it up. If you don’t trust yourself or family members to do so, set up an automatic transfer at a regular interval to do it for you. This is easy to set up and can really add up over time. A transfer of $20/week (~$3/day) adds up to a tidy $1040 by the end of a year; throw in a bit of interest in a high-interest savings account and you’ve got almost $1100. Within a couple of years you’ve got enough for a pretty awesome trip. Once the transfers start happening you won’t even notice the missing money, and your dream trip keeps getting closer and closer to actually happening. “2 years! That’s a long time to wait!” I hear you say. Well, if you don’t set up a fund for your travel dreams, then you may be waiting a whole lot longer… like maybe never. If you’ve set up a recurring direct deposit for your paycheck, often you can work with your employer to have your deposits split among multiple accounts. So you could have 1 or 5 or 10 percent of your paycheck go straight into your dedicated travel account — without having to move it yourself or being tempted to spend it.
3. Let Someone Else Do It for You
If the preceding approach sounds like too many trips to the bank branch, you can do the whole thing online — and even have someone twist your arm. To that end, check out SmartyPig.com (see a video of a family saving for a trip around the world below), where you choose a savings goal when you set up your account, and let SmartyPig keep the transfers going until you reach your goal. Subsequently you have several options on how to collect the money, including transfers back to your banking account, a debit card or even gift cards. On top of that, it seems that SmartyPig offers one of the highest interest rates in the country, so your money works for you as well.
4. The Trusty Change Jar
I finally filled up a large pretzel jar of spare change recently, and took it to a local bank with a change machine (avoid the supermarket machines, which take 8 percent of your savings). I discovered that we had accumulated over $500 of spare change — yeah! Seem impossible? Not at all — it only takes $1.36/day to get to $500 in a year. If most families have two adults emptying their pockets into a bucket every day, the silver adds up fast.
5. Do a True Budget
It sounds like a government budget office tactic, but I encourage you to do a budget that accounts for money you don’t spend while on your trip. This includes food, lower energy bills, weeknight movies, Netflix or on-demand rentals, suspended paper delivery, etc. This will give you a much more honest cash-flow analysis of how much your trip is going to cost you. Don’t forget to factor in non-travel costs like boarding for pets and hiring the neighbor kid to mow the lawn; in the end, for plus and minus, you will have a better sense of what the trip actually costs. Check out mint.com for a great online way to set up a budget.
6. Rent out your place while traveling
Short-term rental sites like airbnb.com allow you to post your apartment/house/room online and rent it out to people looking for a short-term place to stay in your area. If you have a 1‑bedroom apartment in a desirable neighbourhood in a big city, then you can probably get about $100/night while you’re away. If you have a whole house to rent out, you could get up to $300/night. If you’re going on a 10-day trip and manage to rent out your place for the entire duration, that can mean up to a few thousand dollars toward your trip, perhaps even offsetting all of the cost of your trip!
7. Liquidate Directly into a Travel Fund
Almost everyone I know has a plan to get rid of a ton of stuff on eBay or craigslist, and almost all of them have yet to get to it. They need motivation; the decision to put all monies collected directly toward a travel fund can provide just that. Once you set up an account of some type per the above, start emptying out your closets of all your extra stuff, and fill up your dedicated travel accounts with the income. I recently sold a filing cabinet for $50, a dishwasher for $150, an old “Sports Illustrated” magazine for $37 — there’s a couple nights’ stay at a decent hotel right there.
8. Start Collecting Points
Chances are your dream adventure involves a flight, and flights can be pretty expensive and often form the biggest part of your dream trip budget. If you aren’t collecting points yet, start now. First off, get a credit card that allows you to redeem points toward flights, unrestricted (i.e. you can book with any airline, any flight). Many travel rewards credit cards also offer additional perks such as free baggage insurance and travel medical insurance. Put as many of your daily expenses as you can onto your credit card (but be diligent about paying off your balance every month — interest rates on credit card balances will wipe out any advantage of any rewards you earn). If you travel frequently for business, then sign up for a loyalty program with your airline(s) of choice. Most of the big airlines now belong to airline networks so that points earned with a particular airline can be redeemed towards other flights within the network. Make sure you use your loyalty card for every flight! Once it’s time to book your ticket, even if you don’t have enought points for a free flight most cards will allow you to use some of your points balance towards your flight, saving you at least a few $.
9. Plan — and Commit — Way in Advance
Whether you’re saving up for that dream mountain bike trip in Nepal, a surf trip in Costa Rica, or a month along the Camino de Santiago, start planning way in advance, even 2 or 3 years out. Make one small but firm commitment to actually making the trip happen. Whether it’s putting a deposit down on a guided trip, booking a hotel, or even booking a flight, making that small commitment means you have to actually back out of something in order to change your mind, which means that you’re less likely to waffle and change your mind, and more likely to actually make it happen! Have any additional tips for making your adventure dreams come true? Share them in the comments below!