Raising Money. How to Save a Large Lump Sum, to Travel, or For Any Reason
How to save a lump sum to fund long term travel or any work free period.
Saving enough money to not work for a year, or longer, is possible, I have done it before.
I took a year long Round The World Trip, saving up enough cash to have a brilliant time and not work at all.
I wasn't on a particularly high income, but I was determined and cut every expense possible to put money in the bank. This is how I did it.
Set a Goal, Make a Plan, Fix a Budget
That Round The World trip is probably going to be the biggest and best incentive you will ever have to improve your financial habits. Work out how much you will need to save and set up a time frame. Set regular dates for paying money into your separate savings account, make graphs and charts, they all help us to keep it real, to see the progress we are making and get a kick out of it, every dollar takes you closer, it feels good!
Fix a budget, work out how much you can afford to spend in a week and still put the required amount into your savings account. Have a fixed day of the week to take that money out of the bank and only spend cash. That way you cannot miscalculate credit card spendings or allow yourself a little splurge and intend to make up for it later. Cash only from now on!
Those weeks when you come in under budget will feel good, either bank the cash or keep it as an emergency fund for unforeseen expenses. Maybe even buy yourself a treat, after all, this is your money, excess to your savings target, do whatever makes you feel good with it!
I find that a weekly budget works best, that way, if you are running short by the end of the week there are only a couple of days to wait 'till your next "pay day". A monthly budget can turn life into a long, penny pinching, struggle.
- Change your job. I had a safe, permanent position, my career was progressing, but the travel was more important to me. I switched to temping through an agency, temping paid far, far better than my permanent post, I was doing the same job, for more money. One great advantage of temping was that I was paid by the hour, so any extra time in work saw financial rewards, I worked as much as I possibly could. I moved around a lot, each time you move, you can negotiate a higher rate of pay. In those days there were tax breaks for temps, you could set yourself up as a limited company and pay a reduced rate of tax. I don't know if this loophole is still open. Obviously, not everyone can do this, but look around for a better paying option that maybe sacrifices long term career stability.
- Find additional ways to make money. Other than making money on the internet, which i'm not going to touch on here, What about making money through your hobbies? Can you paint, draw, sew, grow amazing aubergines? Can you make something you can sell, either through craft markets or online stores such as Etsy? Could you provide a service in your spare time, mending, face painting, gardening help?
Making Money on the Internet
- An absolute beginners guide to making money online.
Hubpages, Squidoo, Google Adsense, affiliate programmes, monetised blogging, they are all out there waiting for you to sign up and just have a go. No sign up fees are involved, it's all profit.
- Stop Buying Stuff! You don't need to be feathering a nest that you will soon be leaving. Don't buy anything, at all, clothes, make up, soft furnishings, DVDs, nothing, at all. You don't need them. Forget about your house looking great or dressing up to go out, it's all superficial, people can just love you the way you are. Everybody has loads of unworn clothes in their wardrobes, now is the chance to use them, wear them out and then chuck them in the bin. It will make you feel better to have them gone. If you really can't wear them, sell them.
- Cut Your Own Hair. This may seem extreme to a lot of girls out there, but I did it, I looked a bit daggy and I wore a hat a lot, but in 12 months I saved around $800. That's based on a haircut every 6 weeks. Cut your partner's hair too, buy a set of clippers, they will set you back $20, about the cost of one, cheap, haircut for him. If you have kids, do theirs too. It's pretty easy to learn, I've been doing it for years now. Savings soon run into thousands.
- Stop buying Coffee and Food while you are Out.. Say you buy a coffee every day, say it costs $3, that would be cheap, over a year it costs you about $1000!! Stop! Make some before you go out, take a flask or an insulated cup. The coffee stays hot for hours so I can make one and have it when I feel the need, later. Sometimes I substitute a cold caffeinated beverage for a coffee, if you buy in bulk a can costs less than 50c. Take those out with you too, never buy them on the fly. If you are going to be away from home, take snacks or make sandwiches, bake a cake to have with that coffee, you will save a fortune. Always carry a water bottle and refil it. Bottled water is not only expensive, it's bad for the planet.
- Cheaper Accomodation. If you rent, rent somewher smaller or in a less desirable area. If you own you have quite a few options. You could get a lodger, this pays well, or if you don't fancy somebody staying long term , how about advertising a room in your home on Airbnb. I've done this, we had our first booking within 24 hours, that's another $300 in the bank, all it costs me is a little extra cleaning. How about renting your whole house, short or long term and moving into a tent or a small flat, you will save a fortune on utility bills that way too.
- Cut Food Costs. Obviously, switching from steak to baked beans will save you a lot of money, but we like our food so we have to get smarter than that. Use supermarket vouchers and offers, not the ones that are designed to entice you to buy more, the good ones. I have three big boxes of Earl Grey in my cupboard, bought because they were half price that week, it was a big chunk out of my weekly budget, I economised elsewhere that week, but it's a saving of $20 long term. I drink Earl Grey all the time, maybe I shouldn't, but it's an expense I'm not prepared to sacrifice. that's the trick, don't make yourself feel deprived or hard done by, you need to stay happy! It may sound silly, but, go on a diet, eat less, lose weight, save money, it works. Become more vegetarian, cook from scratch, make your own yogurt, there are so many ways to save on food, staying within your weekly budget is key. you'll probably find that cheaper eating turns out to be healthier eating too. Use your garden, even if it's tiny you can grow herbs and tomatoes in pots, it all adds up.
Sell your stuff
The more stuff you can get rid of, the lighter your storage costs will be, storage is expensive.
Ebay and other internet based sites are great for this but local Facebook groups are better, the need for postage is removed, that complicates matters and high postage costs put off potential buyers. If you don't have one in your area, start your own and start recruiting friends and family, everyone has stuff they want to get rid of or stuff they could hire or swap. Buyers pick up their purchases or negotiate a drop off.
See the link below for a few more creative ways to shift the junk.
Sell it and put the money in the bank, watch that lump sum grow!