Can I be completely honest with you? I've always been a good saver. I know, that's not something that people usually admit. Among friends, it's far more socially acceptable to lament living paycheck to paycheck, but the truth is that during my 20s, I've learned some incredibly valuable skills that have allowed me to chase my dreams in a way I didn't realize was possible—one of which was saving to travel the world for six months.
It's a romantic dream for many, but the reality of being able to live without an income for months on end requires serious saving skills. In other words, before you can be that relaxed, carefree traveler, you have to be the exact opposite, scrutinizing every expense and tracking your progress to make sure you hit the goal.
If you're ready to give up on your bucket list at the thought of skipping your morning latte, don't. Serious budgeting can sound daunting, but in the yearlong lead-up to my trip, I learned a few financial hacks that helped me reach (and surpass!) my goal. Here's how I managed to save $20,000 in one year to wander the globe. You can too.
1. Set Two Budgets
If you can relate to the two-thirds of Americans who struggle to stick to a budget, there's one pivotal mistake you're likely making: over-restricting yourself. Why? Writing a budget often triggers optimism. We believe that by penning a strict financial plan we'll somehow magically stick to it, even if our savings data suggests otherwise.
To combat the gap between reality and expectation, I wrote two budgets: one that had an aggressive savings plan and a second budget that was more realistic. Start by implementing the achievable budget and aim to nudge your savings goal every week, until you reach your dream budget. By gradually changing your spending habits, you'll find it easier to work toward the goal.
2. Think Big
The most common (and infuriating) budgeting advice is to start cutting out small, nonessential lifestyle costs, like that occasional Barry's Bootcamp class or iced coffee. Minimizing unnecessary costs is important, but if you're trying to save big, it won't dramatically change your bank balance. Instead, I kicked off my year of saving by scrutinizing base costs like rent, transport, credit card fees, and health insurance. Even small savings can have a huge long-term impact when it comes to reoccurring bills.
3. Focus on Milestones
Articulating a budgeting goal is crucial, but once you've decided on that monetary figure, it can start to seem extremely daunting. If someone had told me that I would save $20,000 at the start of the year, I would have told them that it was impossible.
To make your end goal seem more achievable, focus on smaller milestones. For example, mark the dates in your diary that signal the quarter, half, and three-quarter milestones toward your savings goal, and attach a monetary figure to each to show that you're tracking toward success. Focus on reaching these smaller milestones, instead of the end goal, and you'll feel your budgeting anxiety lift.
4. Stagger Purchases
A huge 65% of millennials say that impulse shopping is their biggest budgeting downfall. Rather than take an all-or-nothing approach to shopping, which is sure to end in disaster, pledge to stagger your purchases. If you're tempted to splurge on a new bag, screenshot the item and give yourself one month to think about it. By making yourself wait to buy the item, you'll minimize unnecessary impulse buys and will start shopping with purpose.
5. Boost Your Income
The majority of budgeting advice focuses on spending less money, but one way to supercharge your savings is to scrutinize the flip-side: your salary. Your ability to earn money doesn't just end with your paycheck. There are a ton of ways to boost your earnings that require little experience or effort. Be proactive by searching for opportunities outside of your 9-to-5f job, like paid mentoring, becoming an Airbnb host, or embracing your creativity via an Etsy store.
6. Initiate Social Plans
One of the biggest challenges presented by a yearlong spending hiatus is socializing. It's unrealistic to forgo every dinner party or cocktail event, but entertaining costs can prove a massive hindrance to reaching your savings goals. The solution? Always be the first to initiate plans. Organize a picnic for a friend's birthday or invite guests over for a potluck night. Initiating the event means you won't have to awkwardly decline an expensive dinner and can suggest fun and affordable alternatives.
7. Visualize the Prize
Your ability to stick to a budget lies in the way you perceive it. If you view the process as restrictive, chances are, you'll give up in the first week. Instead, flip your attitude to focus on the reason you're saving money. For me, this meant swapping out my computer desktop image to a stunning photograph of hot air balloons drifting over Cappadocia, Turkey, and unfollowing bloggers who encouraged me to impulse shop for those who inspired me to chase experiences. By curating my social media feeds to include travel images, I was constantly reminded of my end goal and that my efforts would eventually be worth it. Now, looking back on that year of saving, I can promise you they were.