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travelouge

A travelogue chronicling the adventures of Shane & Julie - a husband and wife seeking to travel out of the country every year of their marriage

travel affordability // part 1

Julie Murphy

Great tips for saving & budgeting for travel // The Murphy Atlas

When Julie and I first started telling people that we were going to quit our jobs and travel for five months, a very common question that arose was: "how the heck can you afford something that…absurd." We don’t make piles of money and we haven’t fallen into any sudden windfalls. Don't get me wrong, we were both blessed with stable, full-time jobs. However, our salaries were lower than most of our friends and we lived in the country’s most expensive city - it took time to save. We were able to take this trip because exploring the world can be affordable when it’s a priority and planned for.

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Long-term travel becomes surprisingly do-able when you don’t have the burden of rent or utility payments (except for those darn student loans) but we understand that it’s not easy for most to find a clean break in your career to up and leave.  Therefore, we will try to outline some tips for planning shorter-term travel without breaking the bank. There’s a ton of info here so we will be dividing this topic into multiple installments. Here we go:

Set your goal: This is where you inspire yourself by picking the next corner of the globe you want to visit and how much vacation time you are willing to allocate to it. This is a starting point to estimating what sort of costs to expect for your trip of choice. I would highly recommend putting together a spreadsheet itemizing things like lodging, food, transport, visas, and activities. Definitely don’t overlook that last one. This goal-setting stage is a great time to decide what sort of unique experiences you want to be able to have while abroad (we will be doing a whole post later on how we choose where we want to go and what we hope to experience there). After all, why travel all the way to Venice and not take a gondola ride just because you forgot to budget for it.  I would recommend using the Lonely Planet website to start gathering cost information for the specific country you are thinking (e.g. this is the page for Thailand) or a more specific breakdown on BudgetYourTrip.com but don’t be deterred by the bottom line just yet…the next few steps should hopefully make the total amount a little more attainable.

Don’t pay for your flights: This is often the largest cost to a trip so why not have someone else foot the bill? Even for the extensive amount of flying that Julie and I are doing on this trip, we are only paying for a fraction of these costs thanks to the power of credit card points/airline miles (to this point in our trip - currently in Cambodia - we have flown over 22,000 miles to 7 countries and 14 cities for just a couple hundred bucks). There are piles of credit card companies willing to give you the near equivalent of a round-trip ticket just for signing-up and using their card.  Commonly referred to as “travel hacking” (even the stodgy fellas at Forbes are now using this term), you are given the ability to use these sign-on incentives and other loyalty perks to drastically reduce the overall cost of your trip.

We personally chose the Barclay Arrival+ as our primary card for the amazing 50,000 miles sign-on promotion (equivalent of $500 towards any flights—no specific airline loyalty), 10% bonus back when redeeming miles, 2 miles per dollar spent, and ease of use worldwide with their chip and pin system. We have also been using the CapitalOne Venture Card that we got for an equally as appealing deal but is missing the 10% kickback when redeeming miles. Both of these cards give you the ability to find a cheap flight (we will have a whole post on how to do this later!) and have all OR a portion of the cost reimbursed right back to you. We then supplement these with a US Airways card - again, with a great starting bonus, especially when signing up inflight - in the case that they have any real steals on their routes. Regardless of the card, make sure you get a great bonus to start off with AND pick one that won’t charge you any international transaction fees. Deals and promotions are always changing and revolving so I would recommend keeping an eye on blogs that aggregate this information. Here are a few good ones:

-       http://thepointsguy.com/credit-cards

-       http://www.flyertalk.com/

-       http://boardingarea.com/

Keep in mind that most cards require a set amount of spending within the first few months to earn these rewards. This is why it’s important to start planning and racking up points well before you need to book your flights. We had been storing up points on our cards for the past year to really boost the amount we would be reimbursed back. The earlier you start planning, the cheaper it can become. However, here are some creative ways to meet that required spending or just boost points:

-       Charge everything to your card. This sounds simple but I mean everything – utilities, mortgage, cable bills, student loans, etc. Many of these companies may already offer payment by card but, if they don’t, check out the website Charge Smart that can help facilitate these payments for you. As long as the transaction fee is less that the percentage of points you're earning, you still come out on top.

-       Pay your taxes by credit card.  Forget about planning for a huge tax return - otherwise known as an interest-free loan to the government. Make sure you owe (a responsible amount of) taxes at the end of the year and then pay with one of your cards (here's the process on how to do this). Our tax bill this year will be paying for our flights from Siem Reap to Chiang Mai in a couple weeks.

-       Fight poverty.  It’s really hard to beat earning credit card miles and helping alleviate poverty at the same time. Over at Kiva.org you can meet your minimum spending requirement on those credit cards by providing small loans to entrepreneurs in developing countries and help empower them and their families. It will take some time to get your money back but they have a 99% repayment rate on the funds provided. As someone who previously worked in this industry, I cannot impress enough how powerful of a tool microfinance loans like these can change the lives of individuals and their communities. Or for those looking to donate towards this cause (can also be done by credit card), I would highly recommend Hope International who, in my opinion, truly understands the needs of the people it helps.

-       Don’t spend anything. There are a ton of nuances to the game of travel hacking to really make the most of these credit card rewards…but the rules are constantly changing. Just recently, credit card providers cracked down on manufactured spending (sending regular payments to friends by credit card through Amazon, buying gift cards and having them deposited back into your bank, etc…all very legal but frowned upon by credit card companies) which were huge contributors to our mileage accumulation. However, there appears to be one stronghold left for earning miles without actually spending any money using the Target REDcard. I have not yet tried this one (so proceed with caution) but here is a great rundown of how it is supposed to work. 

HOWEVER, we would strongly discourage carrying over any balances on your credit cards. Ever. It’s very hard to justify the rates that most cards charge especially if you have to maintain payments on that debt while traveling. It’s best just to pay those suckers off each month and reap the benefits they offer. And please be responsible with the number of cards you open at once. It’s best to space out your applications to avoid too many credit pulls at once and then keep a close eye on your credit score through a website like the free (and awesome) CreditKarma.com.

This is just the beginning, friends. We don’t claim to be experts but we have a whole lot of information to share that made our travel possible. Next up in the series, how to choose your bed wisely and making the most of your travel budget.