Balancing Travel with Your Financial Goals
Sometimes people assume that because I spend money on travel I’m not setting other financial goals. Not true!
Here are some tips for still being sensible with finances while also spending money on travel.
– Life is all about trade offs. Know what tradeoffs aren’t a big sacrifice to you. For example, you might not care about having a styley car or a flash apartment. You might be quite happy to watch TV on your laptop rather than have a big TV. Know what doesn’t matter much to you.
– Live with people who share the above values e.g., it’s hard to avoid contributing to a giant TV if you have roommates or a boyfriend who wants to buy one.
– Don’t have subscriptions – you’ll only end up paying for things you don’t use.
– Negotiate your salary. Saving money is all well and good but how much you earn is the biggest factor in what sort of lifestyle you can lead and still save.
– Minimize gifts. Wedding gifts, baby shower gifts… they all add up. If you’re not a “stuff” orientated person, it can be very frustrating to be budgeting $500-1000 a year to pay for gifts for friends who are. Try to figure out a way to keep your “gifts” budget under a certain level without being a douche.
– Start investments now! Google “Cost of Waiting Calculator” and punch in some numbers if you don’t believe me.
– Prioritize your credit score above all else. It will effect the interest rate you pay on a future mortgage and your ability to get those sweet credit card sign up bonuses.
– If you’re in the US, max out your contributions to a Roth IRA. With this retirement account you can take your money out ANY TIME without tax or penalties. You only can’t withdraw the profits. You can only withdraw the profits after age 59 1/2 or if some conditions are met, to pay for college or your first house (or else you’ll pay tax on the profits and a penalty). To withdraw the profits for college, you need to have had the account open for 5 years, so just open the account and contribute something!
Note: I’m not a financial advisor, the advice here is just my personal thoughts.
I think lots of people assume that people who spend money on travel are irresponsible but travel teaches you lots about how to save money, and of course, for most people travel isn’t their only priority.
I agree that people often assume that people who are spending money on travel aren’t being sensible with investments and retirement but lots of us are. Sometimes this means spending less on travel but putting even 100 quid a month into retirement is essential.