Cut The Fat
Aside from selling all your possessions, working 4 jobs or winning the lottery, there is one sure way you can start padding your savings account right now.
Don’t worry, I am not going to recommend you cut Starbucks coffee or eat out less. That is just common sense. Besides, you probably already cut those things out of your life.
I am going to give you some new and simple ways you can save larger amounts of money with less effort by simply cutting some of the fat out of your budget. Trust me, fat is lurking everywhere in your budget.
Here Are 20 Ways You Can To Save More Money For Your Travel Break
Save Money On Low Hanging Fruit:
($100 – $1,000 Savings/year) To get big results fast, go for low hanging fruit. In other words, what small thing can you do once that will yield you some big or lasting results? Here are a few examples.
* All amounts are ball park figures, results may vary based on your location and situation.
1- Car Insurance
($100 – $ 1,000 /year savings)
Save money on your car insurance by using an online comparison shopping tool like Click Insure and Kanetix.com. These two sites compare insurance rates based on criteria you put in and it will give you rates across multiple insurance companies instantly. It’s free and easy, you have nothing to lose and a lot to gain. (US only)
2- Home Insurance
( Savings Can Vary)
If you own a home in the U.S. than you most likely have owners insurance. Just like car insurance, you can save yourself a few hundred dollars a year by doing some comparison shopping to ensure that you have the best deal. Try Kanetix.com and find out just how much you can save. (they also do car and travel insurance).
3- Get Additional Discounts On Car and Home-owners
( Savings Can Vary)
One of the things I did to save another couple of hundred dollars was to use the same company to insure my car and house. All you have to do is ask your insurance carrier if they insure both cars and homes and if they give a discount for insuring them all under one company. While you are at it, make sure you are getting any additional rewards like good driver discounts.
4. Double Your Deductibles
($100 to a few thousand dollars)
Want to save around 10 to 15 percent on all your insurances policies – home, health, car etc. ? Raise the amount you are willing to pay out of pocket on your insurance policies. Instead of a $100 dollar deductible raise it to $500 or $1,000 deductible. You’ll save big every month. Just make sure you put that extra savings in the bank.
5- Refinance Your Mortgage
( Amount Varies into the thousands of dollars) If you own your own home, you could save thousands of dollars on your mortgage payment by refinancing your mortgage but be careful NOT ALWAYS!.
A general rule of thumb is to refinance when interest rates drop 2 percentage points or more. For example, if you have a $100,000, 30-year fixed-rate mortgage at 7 percent, you will pay ~$980 / month and more than $140,000 in interest over the next 30 years.
But if you have a $100,000, 30-year, fixed-rate mortgage at 5 percent, you will pay $850 / month and less than $93,000 in interest over the same period.
That is a savings of $130 / month, $1,560 / year and almost $50,000 dollars over the course of 30 years.
Put Your Assets To work
6- Rent Your Home or A Room
($1,000 / year or more depending on your mortgage)
I used to rent a room out to students. I placed an ad on craigslist and found people easily..
Want something less permanent? If you live in a desirable area or near a big city, you could rent out your place for a shorter period of time to travellers.
Anywhere from a weekend to a month or more. There is a site which I use that has a good inventory of places all over the world. It’s called Airbnb.com.
It’s free to list your house but once someone books, you pay AirBnB.com 3% of each accepted application. You’re protected for up to $50k with the Airbnb Host Guarantee in the unlikely event something happens.
Oh and you can book your whole house or just a room.
On the flip side, you can use Airbnb.com to book a place to stay on your next trip. It’s cheaper, cosier and you can use a kitchen to cook on those nights you don’t want to eat out. This is a great option for families. We usually have to book 2 rooms in a hotel but with airbnb, you can get a whole house for less than the cost of a hotel.
7-Make Your Money Earn In Your Sleep
If you are saving money for your career break and you know it’s going to take you a year or more to achieve your goal than why not put your money to work? A high-yield savings or money market account is a simple way to you can do this.
Another is to put the money into a certificate of deposit (CD). You will have less flexibility and liquidity with these accounts because usually you lock the money in a fixed state for a certain amount of time from 3 months to five years. But…. the yields can be very attractive and are usually better than a savings account can yield.
Cut The Luxuries
8-Cut Your Cable
(Up to 1,000 / year in savings)
Ok, when we first cut our cable I have to admit, I was a bit traumatized. Not because we were watching a ton of t.v. but because I liked having the convenience of having it there when I wanted it.
Don’t worry, with internet t.v. like Hulu.com. I can watch almost any show I want. (this is only good in the US, sorry Canada and UK).
Hulu is free to use but I pay $7.99 per month for the premium version which gives me a wider selection and some other perks. A far cry from the $100 dollars/ month we used to pay. That’s over $1,000 dollar savings per year straight towards you goal. We just hook our laptop up to a t.v. with an hdmi connection and voila, we’re watching movies instantly.
9-Sell Your Unwanted Stuff and De-clutter Your Life
( potentially make and save thousands)
If you have stuff that’s just sitting in your garage; an old trumpet that no one uses, a bunch of baby clothes, books than consider a garage sale.
If you have a big ticket item than sell it on eBay or craigslist. It’s worth it people. One persons trash is another persons treasure, for real!
10-Stop Buying New or Stop Buying All Together
(Lots of money)
One of the ways I was able to save money for many of my career breaks was to do without all those things I thought I needed. Like coach bags, new clothes, fancy kitchen appliances……
I never bought a new car in my life. The great things is, I actually had nicer things when I bought things used. I once bought a beautiful leather couch and a sweet set of golf clubs which cost me a fraction of what they would have cost brand new.
Save Money On Your Normal Purchases
11-Get A Rewards Credit Card
I know that people say you shouldn’t have a credit card but If you can spend responsibly and pay off your credit card monthly than having a rewards credit card can pay off big. I use my card for all my expenses and ever year I have about 1 or 2 free airline tickets. I have a friend who bought her ipad and laptop using her rewards points. It doesn’t cost anything to have this type of card so look for one with rewards or cash back rewards.
12- Use A Shopping Portal And Get Instant Rebates
There is a shopping portal called BigCrumbs.com which lets you access your favourite places that you normally shop at anyways only you will earn cash back on all your purchases.
It has a list of over 1,000 retail stores that you can shop at. I especially like to use them for their travel affiliates like car rental companies and even discount airline companies like Cheap-O-Air.
Save Money AND Go Green
13- Save 90% Off of Your Laundry Detergent
(Up to $300 / year)
How much do you spend on laundry detergent per year? 20, 30, 40 or more dollars per month? The average family spends around 15 to 30 dollars a month?
I know it sounds odd and extreme but you can save 90 percent or more on detergent by making your own. So instead of paying $360 year, you would spend $36 / year on a huge bucket of detergent that will take you less then an hour to make.
That’s a pretty big savings and the extra effort to make it is worth the $300 dollar a year savings to me.
I watched a video and it looks pretty straight forward.You make it once from products you can easily find and it can last over a year. A few bloggers out there have blogged about it and say it works and cleans your clothes just fine.
Watch this video where one fellow shares his recipe. He claims you can make your own detergent for 2 dollars and it can do 600 loads. Whoa! See for yourself..
14-Save Energy and Save Money
(Save 11% of your electric bill)
One really easy thing you can do today is change your light bulbs to CFL bulbs (compact fluorescent light). On average, lighting accounts for 20 percent of your electric bill.
A CFL bulb consumes about two thirds less than a normal light bulb. So on average, you can expect to save around 11% of your electric bill by switching to CFL light bulbs.
In other words, If your electric bill is around $100 per month you will save around $11 per month or $132 per year. Not bad for just changing a bulb. You don’t even have to change all the light bulbs in your house.
To save the most energy and money, the U.S. Environmental Protection Agency recommends replacing standard bulbs in areas where lights are used frequently and left on for a long time, such as family rooms, living rooms, kitchens, dining rooms, and porches.
Plus, your doing the earth a favour by consuming less electricity.
15-Eat Healthier and Save Money
(I personally saved over $200 / month)
By eating lower on the food chain, you not only save money you also eat healthier. it’s a win win situation.
A few years ago, I decided our family would eat healthier.
No coke, no pizzas, no bags of chips or convenience foods. More water, less meat and plenty of fresh fruits and veggies. Result, we saved several hundred dollars a month for a family of five.
Work Related Ways To Earn and Save More
If you’ve cut, negotiated and sold all you can and you want to do more to increase your savings there is always the option of working more or getting a second job.
My suggestion is to try to take a second job that you enjoy doing. A coffee shoppe at a department store during the holidays. A library if you like books. My dad loved tools, so he would work at home depot in the tools section for fun during the holidays.
17-Skip The Holiday And Save Your Paid holidays from your employer
If your employer gives paid holidays or vacation pay, see if you can accumulate them and get paid in lieu of taking your vacation.. I have done this several times.
It ads up. One of my companies even let me cash out my sick days. Yahoooooo….
18-Start Your Side Hustle
Have you ever wanted to freelance, or start a web based business.
If you have a skill, maybe you can teach other people. Teach violin, English lessons. You might surprise yourself and discover you have a talent for teaching.
You could even teach your courses over the Internet using skype. You can then run your business from anywhere in the world with just a computer and an Internet connection. It’s what I’m working on myself. Warning, it takes hard work and may be years before it will fully support you.
19- Move And Or Downgrade Your Home
If you are really motivated to sock as much cash away as you can, then think about getting a smaller home, or moving to a different area where the cost of living is less. In California lots of my friends moved to other states when the recession hit or moved further away from big cities to cut costs. Drastic but necessary for some people ourselves included.
20- Sell your blood
Ok this last one was just thrown in for fun. Don’t sell you blood. Donate it for good Karma.
How Much Can You Save By Cutting Back?
I’ve only listed a few ways you can save money for your career break or travel plans. If none of these work for than find a way that does work for you.
The key is to start by knowing where every single penny of your money goes and start evaluating your biggest expenses first.
Then start drilling down on those to see where you can cut and save. You will always find some kind of fat you can trim.
You could save an extra thousand dollars to ten thousand dollars a year depending on what you are willing to cut to make your travel dream and or career break a reality.
I know it doesn’t sound like much and it is not the magic bullet that will make your travel plans happen instantly.
The reality is, most of you will probably have to save for a several years to be able to afford a year off to travel or live abroad.
Don’t get discouraged by this. I personally know of hundreds of people that saved for several years just to make their travel dreams happen. Some people have even gone so far as to sell their homes and all their earthly possessions.
The question is are you willing to do it?
You’re not going to regret missing out on a few movies at the cinema, or skipping a few nights out a month so that you can enjoy a longer career break doing world changing things. But you might regret not trying to at least achieve your savings goals so that you can take that trip across Russia on the Trans-Siberian or about backpack through Egypt and Tunisia, or live in France for a year with the kids.
Examples of people who did it or are doing it!
Warren and Betsy of www.MarriedwithLuggage.com saved for years also before finally taking their own break to travel the world. They are on their fifth year of travelling the world.
Warren and Betsy also wrote a book on the subject of saving to achieve your dream called “Dream Save Do”. A Step-By-Step Blueprint for Amassing the Cash You Need to Live Your Dream. I highly recommend their book if you are serious about saving for your dream..
How much do you think you would have to save to take your career break? Leave your comments below.