How I Saved Enough to be Unemployed for One Year
One of the biggest questions I get when people find out I quit my job to travel is how I can afford it.
As mentioned in my previous post, Why I Quit My Dream Job, deciding to quit is a personal decision based on many different factors, and one of the most important factors is money.
So let’s toss aside the taboo and talk money today! In the post below, I’ll be diving into the strategy around how I saved enough money to afford to be unemployed for one year.
Budget, Budget, Budget!
The most important stage in my saving strategy starts before the process even begins: Building your Budget. Because my boyfriend is much better at finances than I am, he helped me budget tremendously by asking a few key questions that got me thinking. If you don’t know where to start when it comes to budgeting, I encourage you to ask yourself:
- How much do I spend monthly on living expenses today?
- Do I expect to be spending this much monthly without an income while traveling?
- If so, how much will I need to save in order to maintain my current lifestyle without an income?
These three questions were key in helping me decide how much money I needed to save. I tend to err on the more conservative side when it comes to saving and would rather have more money saved than not, so I overestimated my monthly spending habits in this process just to be safe.
Also a key factor in deciding your budget is where you plan on living abroad. Fortunately, the cost of living in most countries is cheaper than the cost of living in the United States. I used a resource called NomadList to estimate my cost of living in certain countries and took my monthly rent expense in Austin as a base measurement in deciding which countries to travel to.
Once you do the math, these numbers may seem daunting, but in the next section we’ll talk about spending habits and how you can take control of them.
Be Mindful of Your Spending
Let’s be honest, I think we all fall victim to how quickly our expenses add up, especially the little things like subscriptions, auto-renewals, and eating out with friends.
When I was planning my budget, I went through my bank account, looked at all of the categorizations and how much I spent in each. This was extremely helpful in giving me an idea of how much I spent on travel vs. groceries and so on. It also gave me valuable insight into where I could potentially cut costs when it came to practicing good saving habits, which we’ll talk more about in the next section. An easy way to put this into practice is to start looking at all of your auto-renewal and subscription based expenses and evaluating them.
P.S. If your online banking portal doesn’t automatically categorize your purchases, try out Mint, a free budget planner and tracker. I really liked using them a few years ago and the visual graphs they provided show the breakdown of your spending habits.
Once you know where you can potentially cut or allocate costs, you’ll automatically be more mindful of what you’re purchasing and how you’re spending. After you’ve locked down your budget and learned more about your spending habits, you can now put these two into action and start saving!
Practice Good Saving Habits
One of the easiest ways to save for travel, in my opinion, is to auto-deposit a bit of your current paycheck into a checking account designated for travel expenses. While I was working, I opened a checking account specifically for travel and would auto-deposit money from each paycheck into that account. It wasn’t a significant amount, but boy did it add up overtime! This was by far the easiest way for me to save money. I liked the fact that I never saw that portion of my paycheck, since it was automatically deposited into my travel account and I didn’t have to consciously remember to transfer that money over.
Another great way to save is to get a credit card or debit card with no foreign transaction fees or ATM fees. I use the Charles Schwab Debit card and it reimburses your ATM fees both abroad and in the U.S., which is an easy way to save a bit of cash when traveling.
Travel Saving Hacks
Aside from saving money, I often find myself looking for the best travel deals or finding travel hacks to save a bit of money on tickets or accommodation. I compiled a list of my favorite travel hacks that can hopefully save you a bit of hassle next time as well:
As mentioned above, NomadList is a crowd sourced database that aggregates information on cities around the world. It ranks cities based on cost of living, safety, internet speeds, and more. It is primarily geared towards individuals who work remotely and travel, but anyone can use the free version to find the best places to live and cost of living in each.
Use Incognito Mode in Google Chrome
Search for flights using Google Chrome’s incognito mode. This will ensure you’re finding the best flight deals. Websites will store your information and search history, so when they see you’ve been searching for a particular flight route, they may increase the price.
Find out how to browse in incognito mode here.
Check out the Google Flights Map Feature
Google Flights is one of my favorite platforms to search for airline tickets. They have a map feature that generates a map of the world with flight prices appended to each once you insert a departure city and dates. This is an easy, “birds-eye view” of the cheapest destinations. It is a great feature that allows you to explore and consider destinations you might’ve overlooked otherwise.
Invest in a Travel Friendly Credit & Debit Card
There are plenty of articles out there recommending the best travel cards but I can personally attest to the Charles Schwab Debit Card and the Chase Sapphire Reserve Credit Card. As mentioned above, the Charles Schwab Debit Card waives ATM fees and has no foreign transaction fees. The Chase Sapphire Reserve Credit Card also has no foreign transaction fees and allows you to receive 3x points for every $1 spent on travel and food related items.
Leverage Credit Card Points for Travel
Since we’re on the topic of travel credit cards, there are plenty out there that you can benefit from. I personally use the Chase Sapphire Reserve but you must do your own research to find the one that suites you best. The Chase Sapphire Reserve allows me to collect points from my purchases to redeem for flights, accommodation and more. It also comes with Priority Pass, which grants you and two guests access to over 1,300+ airline lounges around the world, as well as travel insurance coverage.
Phew! What a mouthful. I hope you found this helpful. Saving money shouldn’t feel like a chore and I’d hate for you to cut back on things you love only to end up being miserable in the end. So I hope these tips inspired you, at the very least, to be more conscientious of your spending habits and show you that it is possible to save enough to live without a steady income for one year.
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