*It doesn't cost $100k to travel... it doesn't have to even cost $10k... but a long time ago Tim and I decided after we got married we were going to depart on a "long honeymoon". To where and for how long had yet to be determined, but we started saving anyways and now, 3 years later, here we are.
What People Ask
"Wow, you guys are just taking off and traveling? I wish I could do that!"
We hear this all the time in response to sharing our story. Yet, what surprised us the most is the number of people who ask "how are you able to do thi$?"
"I dunno, we saved a bunch of money!"
It seems like such an obvious answer to us yet people still think we won the lottery.
THE REAL ANSWER: we sacrificed for years, made smart decisions, and planned far in advance. But ANYONE could do the same thing.
Though we do not have kids or own a home yet .......... there are loads of people who incorporate travel into their life that do still have those life responsibilities. Do not use your children/marriage/mortgage as an excuse NOT to chase your dreams. That's not healthy and you and your family deserve to be happy!
What We Did
We did everything we could to avoid "Lifestyle Creep".
What is Lifestyle Creep? The tendency to naturally increase spending habits as salary increases. The issue? If a new raise or promotion only means a better car, a larger apartment or more expensive food then your bank account will never realize any of your salary increase! That's cash flow, baby!
Tim and I choose to celebrate our raises and promotions over dinner at home and a bottle of Kirkland Cabernet, not new apartments, furniture or fancy watches.
Projecting Our Savings
The real celebration of earning a higher income came when we sat down together to review our shared Google Doc budget-projecting spreadsheet. We recognize how "nerdy" that sounds, but does bungy jumping in New Zealand sound nerdy? Using that self-made spreadsheet Tim and I could actually see and predict how much money we could have by a certain date. "Oooh! Now that I make $X I should have $Y amount saved by August 2015!" (We've been having that conversation since 2013). We used "today's" cash-flow and estimated that if our incomes and expenses stayed the same, we could see how much money we will have saved at the end of each coming month! Talk about INCENTIVE on keeping expenses low!
To our specific story, in the spring of 2013 when we looked at the money we had already saved and then started projecting what we could save, we would scroll to the future, pick an arbitrary date and say: "Look! By Aug 2015 we could have $X!
But YEAH RIGHT - it totally felt unrealistic at the time. "$X? No way! That's more than I make in a year!" But, it was incentive enough to stay the course...and here we are. We projected our own success. Just like the spreadsheet promised, $X in the bank August 2015.
It Took Sacrifice.
We're not extremists, crazy or hermits. I don't even think our friends would describe us as "frugal". We lived in a nice 1br apartment in Lakeview, a beautiful neighborhood of Chicago along Lake Michigan and lived what would probably be described as a "normal" life.
BUT this was the apartment that I moved into, alone, when I was making $40k/year. I stayed in that apartment longer than 3 years and even got a roommate (my husband!) even though I have changed jobs and earned promotions and raises. Because of this one choice and a few other smaller sacrifices we ended up with our target. (Cash held in savings accounts and invested in mutual funds; 401k and Roth IRAs.)
Little things add up to big rewards.
Inexpensive Rent (Share a 1br @ $1100/mo = $550/pp)
Subsidized phone and internet bills through employers (pay ~$90 for Tim's phone (Allison's phone is covered through work, ~$30 for Comcast Internet)
Netflix instead of cable ($8/mo)
Meals at home and bring lunch to work (savings on savings on savings)
Avoid taxis and Uber unless we are saving a significant amount of time ($2.50 for the bus please)
Owe zero debt (if you are in debt, use your savings to eliminate it first!)
Have zero car payments (we own both of our cars...stay out of debt and buy something you can afford!)
Work side freelance/weekend jobs on top of our professional careers to earn small additional income (Mostly Tim, good job babe)
Use our Savings Projector to continuously make sure we're on-track (makes it easier to avoid impulse purchases... but damn you Groupon!)
Wait patiently (the hardest)
Note: We also contributed between 8%-12% to our 401k although neither of our employers offered any match. Sad face.
--If you're a numbers person (we are too!) check out this post with more details. How to Save Enough Money to Travel
Our Day to Day
While we watched our savings account grow and grow, we became more financially comfortable and confident. But that's when the crazy mind-warp started to happen. We HAD money but couldn't (wouldn't) spend it!
"But we need a new coffee table. I hate this rug. I have nothing to wear! A $50 top isn't even going to put a dent in that $10k of savings!"
Says the devil on my shoulder.
"But you can LIVE on $50 a day in many places in the world"
The Nomadic Matt Angel on my shoulder reminded me. Each top I didn't buy is another day of travel.
Yes. We got sick of our 1br, 700 sq ft apartment with no dishwasher or garbage disposal; using quarters for laundry; only owning two chairs and moving one from my desk over to the kitchen table every night to consume another Costco-created meal. We constantly felt in each other's way and like we didn't even have enough space (or chairs!) to have friends over. (Sheesh, on paper that all does sound pretty ridiculous!) But the most ridiculous part was sitting there feeling like that when we were looking at $30k in the bank. Then $50k. Then $65k. Things could be different.
We lived like this together for 2 years. (I was in that apartment for 3!) But let me tell you not a day went by that we weren't proud of what we were doing. Yes, it was hard, and we had to continuously remind ourselves that we had money and that eventually this would all pay off (pun!).
At the end of June 2015 our lease on our apartment ended. We temporarily crashed around between our parent's houses (thanks) and although this is not the dream of many newlywed couples, overwater bungalows, Mediterranean road trips and Philippine beaches called our name.
YOU CAN DO IT TOO
Don't be Jon.
1. First, get on track financially. Click to download our free Savings Projector
2. This article should help: How to Save Enough Money to Quit Your Job and Travel