“Oh, That’s Always Been My Dream!”
If I had a dime each time I heard this. . . As a matter of fact, I hear it so often that I thought I would post a blog how we achieved this dream, a life of travel. My typical response is, “dreams are worth chasing, it takes work.” I typically lose them with the “it takes work” part. Some reason it’s assumed by some twist of goofy circumstance I am able to travel full time. Another misconception, many people assume this translates to vacationing full time, which is different than traveling.
Vacation travel is (almost) by definition an excuse for extravagance. On the other hand, take camping across the country as an example: we prepare all of our meals, we hand wash pots/pans/dishes, we don’t just hop into a shower with fluffy white towels provided – we have to checklist items in a shower caddy, then huff them to a shower stall – this is what travel looks like. Certainly, this is no vacation, but it is tremendously rewarding.
Granted, there are a million opinions on this topic, I’m here to share mine. Ours.
1. Determine Your “WHY”?
You need to know why you want this lifestyle. This is an important first step. It’s the way you stay motivated to save money for it. At one point, I had several visuals posted throughout our house with my “whys”. The visuals helped me stay focused on my objective.After thoughtful answers to the question, and writing down your “whys”, you may discover it really isn’t your thing.
2. Expand Your Income and Live Below Your Means
Look at ways to build your income. For us, it was decades of corporate America income, big picture investing in real estate, and making interest on small home loans (even to this day). Then, for about five years, we steadily sold everything – well, almost everything. Generating income is key, but equally important is saving your income. Overtime pay, tax refund, pay raise, bonus income – we almost always banked. (Here’s a tip: even saving 50% of your pay raise helps, you can enjoy an increase in lifestyle, and bump up your savings.) It’s easy to fall for instant gratification, congratulate yourself by splurging, heck you “deserve it”. But, go back and visit your “why”. Bank your rewards and let them grow for future travel goals. The bigger the difference between what you earn and what you spend, the sooner you’ll find yourself with enough money to do what you want with your life.
3. Take Advantage of Employer Benefits
Assuming you are working in corporate America, there are often overlooked ways an employee can reap income benefits. Does your employer contribute/match your 401K? – that’s FREE money. Don’t leave it on the table. At a minimum, contribute enough to get that match. Do they contribute to a Health Savings Account (HSA) if you go to a screening? – GET that screening done, that’s FREE money. Both of those options are tax-free contributions as well – max them out, what the Feds don’t get, is money in your pocket. Does your employer offer an employee stock purchase plan? That can be a good way to get instant growth on stocks.
4. Expense Control
This point could be a blog on to itself. If you are not familiar with “The Latte Factor” – oh yeah, you know where this is going – those seemingly small, insignificant expenses add up. Lattes, fast food, bottled water, magazines, chewing gum, paperbacks…. Determine where your chump change goes, and check out this calculator: David Bach’s Latte Factor. Alarming, isn’t it? (A $3.00 latte four times a week, for 10 years is $4,171.17 in cost & lost earning potential.) On a monthly scale, it seems so trivial to cut the latte…but the big picture baby, it’s a BIG frickin’ DEAL.
5. Expense Control
Expense control deserved two spots on my list. I want to address the less frequent purchases: car, furniture, computer, etc. In a general sense, we justify these big ticket purchases as a one-time deal. What we fail to consider at the point of purchase, is that these new things eventually become ingrained in our standard of living. In other words, luxuries transform themselves into necessities. I have fallen in this trap, confusing “need” from “want”. I always drool at the latest iPhone and think I need it. But, I suck it up (literally) and make do. I revisit our “why” and I’m actually grateful for my 4 year old iPhone.
6. Practice A Lifestyle of Travel
Through the years of building our dream, we did some test driving – confirming this goal was everything we thought it to be. We took as many opportunities as possible to travel (remember, this is different than vacation.)
We encountered situations which may deter others from having the same dream: we’ve been pick pocketed in a Rome subway (gypsy & children found the water bottle – wha wha!), we’ve slept in a train station (ugh), we’ve been stuck penniless without a way to get cash (at least temporarily) on a couple of occasions, including Yankee Stadium! and we still managed to see the game. Then there was the time we had a flat tire in Costa Rica on Christmas Eve. These tough situations only strengthened my resolve – I love an adventure.
7. Bigger isn’t Better and Less is More
I wish I learned this one earlier than I did. We’ve heard the adage, “buy the largest, most expensive house you can afford.” And, I drank that Kool-Aid. Along with that biggest house we could afford, our taxes were higher, our insurance was higher, heating, cooling, repair, water – you name it – cost more. In most situations, the better advise would be, “buy the least expensive house you feel comfortable in.” When I say “comfortable,” I mean with the neighborhood, size, level of quality, etc. By heeding this advise, you may have less house, but you will have more wiggle room for savings and those dang surprises which almost always come along with life & home ownership.
8. Ditch the Monthly Payment Concept
Other than home ownership, we would only buy something with the money we saved. Cash for cars, computers, mobile phones, appliances and the like. I often hear people justify a purchase based upon how much the payment is each month.
Unless the payments are with ZERO interest, it’s not a good deal. Carli learned this lesson when she got Invisalign. She had to pay out-of pocket, and the total cost was $3700, but if paid in full on day of first treatment, it would be $3,500. Or they offer 12 payments of $324, or 18 payments of $216 (and so on.) No where is the cost $3,700 – it’s either chopped by a 5% discount, or you pay interest. Man, it seems so affordable looking at those monthly numbers – especially the 24 month plan! Ultimately you are losing money in any of the alternatives if you don’t “pay today.” Paying in full is almost always the best option. And keep in mind, this is even the case with things like car or homeowner insurance – if you don’t pay the entire invoice, they tack on a “billing fee.” It’s outrageous.
9. Pay Attention To The Nitty Gritty Details
This step is one of the more grueling, and even I want to throw in the towel sometimes. Handling Fee, ATM Fee, Transaction Fee, Late Fee – and my all- time-despised, Convenience Fee – do not let them happen. Read the fine print before you pay. I discovered if I paid my property taxes online, they would charge me a “convenience fee” – now exactly WHO is this convenient for?
Find the “right” ATM – without a fee (or find a bank that covers the expense – they are out there.) Be sure you’re “never late”, but if it happens once, pick up the phone and plead your case – they will waive it. Look at your bills – Woody noticed Comcast was charging $7.50 month for “modem rental”. You can buy a modem for $25, which is exactly what we did. It takes attention to detail. It requires the suffering of talking to not-so-helpful customer service agents, navigating the layers of a phone tree – but the end result chops those bills.
10. Do Your Homework
Here’s one I thought I totally had in the bag, but no, I missed a big piece of the homework assignment. In a word: taxes.
Uncle Sam still wanted a regular cut of my pie, even after I was unemployed. I had the impression I could file/pay in April, like I always had. But it doesn’t work that way. Other than that lesson of hard knocks, the homework was one of my most enjoyable steps of creating this lifestyle. I found bloggers who had created their own travel lifestyle. I identified the ones who aligned with my dreams and my “Why”. What tricks did they learn? How did they get there? Once we cut the cable & internet (6 months before we launched), the library became a valuable resource. They had countless travel magazines – ooh pictures! – volumes of travel books, and free wifi.
Well, there you have it, my top 10. But I can’t stop. . . ideas are flooding: choose destinations where your dollar goes a long way, like Chile, Portugal or Thailand. Become a digital nomad – working wherever there is wifi. Offer humanitarian efforts volunteering on projects, wildlife conservation, healthcare opportunities, or positions for teaching abroad. Oh, and I failed to mention capitalizing on airline rewards. I haven’t tried to obtain credit (cards) since I launched, but while employed I would reap thousands of points simply for signing on… BUT REMEMBER: read the fine print. It may not be worth it if you are paying interest and/or fees to keep the card!
OK, I’m stopping now.
Thank you for following!