How Regular People Afford to Travel
I’m going to build on Jenni’s previous post (view it here) about budgeting. How many times have you heard “You need to budget!” I want to call out some people who say to budget but do not technically know how to do it and understand what are reasonable expenditures. Saying you need to budget is completely different than actually executing a budget and knowing what percentage of your income is fair to spend. I really love the way Jenni gave examples of where you can save your hard earned income and how to prioritize savings to make your travel dreams a reality.
Even if you run through my exercise here just once, I think you will learn a ton and subconsciously to put my advice to use. Just so you know, I only recently learned how to budget professionally. So do not feel like this is out of your abilities. I’ll teach you more as I learn!
These are the recommended percentages which I personally use to manage my monthly income. Remember you cannot spend more than then budget; you can only shift the money and balance your budget.
|Income (100%)||Sample Recommended %||What Chase Budgets|
|Food (Groceries & Restaurants)||10-15%||10%|
|Transportation (Gas/Insurance/Other)||10%||0% – See this article of how|
|Entertainment/Equipment/Other Necessities to do business||5-10%||10%|
|Utilities (Cell Phone/Gas/Hydro/Internet)||5%||0% – See this article how|
After you find out your first paycheque for the month enter it onto a spreadsheet and this will be your reference cell to take your percentages from! Ensure when you choose between the ranges I suggested above that you are adding it up to 100%.
My savings % is extremely high right now and if you want to find out how click here to view my article on how to do this. Within my savings percentage this is where you need to determine what % of your income you are willing to dedicate to travel! I currently dedicate just 5% of my budget to travel, and then if at the end of the month I am under my budget for total spent then I just roll that remaining dollar value into my travel savings account.
To make it obvious and easy for your different categories of savings I would set up free separate savings accounts at your current bank. I have 5 savings/investment accounts: a General Savings Account, a Tax Free Savings Account (TFSA here in Canada), an Emergency savings account (equates to 6 months of gross income), and my Travel/Entrepreneurship Savings account, and a Registered Retirement Savings Plan (RRSP). In the past I would have a difficult time dipping into one account, and into another and this would give me a false sense of confidence that I had a lot of money. When you do not separate savings, you may ruin your chances to achieve mid to long term savings goals to do something bigger and greater with your travel or life in general. Having 5 accounts just for savings is the easiest way for me after failed attempts to budget so find out what works for you.
Comment below if you would be interested in my excel document tool that you can use to budget each month. Also I’m interested in hearing how budgeting has worked or failed for you in the past so comment below and I can write more articles to help!