How to Travel on a Post-Grad Budget, Part 1

How to Travel on a Post-Grad Budget, Part 1

New Zealand's Aoraki / Mt. Cook region

New Zealand's Aoraki / Mt. Cook region

It is 180,000% possible to travel on a post-grad budget, and I will defend this statement in a manner that is borderline aggressive.

The world wasn’t meant to be admired from a stock desktop wallpaper; it was meant to be experienced. This is another statement that I will defend in a manner that is borderline aggressive.

But traveling isn’t always easy on entry-level wages. Here’s how to see the world without breaking the bank:

PART 1: Planning Your Trip

1. Budget.

A) Before we even begin discussing budgeting for travel, you must first know how to budget your money for all general life expenses. This post from That First Year and the blog The Financial Diet are good places to start when learning how to manage your money.

I also think in discussing budgeting money for travel, it’s necessary for me to be transparent with my own income and expenses to explain how I go about budgeting for travel. After I pay rent and other bills, I have about $900 per month to do things like feed and clothe myself and feed (but not clothe) my Poodle and kitten. After I budget for gas and groceries and overpriced vet bills and mochas, I’m left with around $300. That $300 could get me some of those oversized, blanket-like cardigans from Target that make you feel like you’re being embraced by heaven itself.

But here’s where the self-control that is required of adulthood comes into play: I don’t (usually…) spend that extra money on Target clothes; I put it away into my savings, set aside specifically for travel.

It’s about making travel a priority.

If travel isn’t a priority when it comes to creating your budget, then you will never have enough money to do so no matter how much you make, because there will always be some other material thing that you just have to have.

So when creating your weekly or monthly budget, earmark money specifically for travel, even if it means foregoing all those Target cardigans.

B) Once you’ve made travel a priority, it’s equally important to create a budget specifically for your travel destination once you’ve decided on where you’d like to go. Having a firm monetary goal will make it easier to save.

When creating your travel budget, keep the following in mind:

  • Flight or Gas Money
  • Transportation costs at your location (rental car, taxi, public transport)
  • Food and beverage costs
  • Attraction costs (concerts, museums, tours, etc.).

Once you’ve set a travel budget, save more than you think you’ll need in case you actually end up spending more than you anticipated. I usually save around $100 more than what I’ve budgeted for originally. You don’t want to constantly be checking your bank account on your trip for fear that you’re driving yourself into debt one crepe at a time, so leave some wiggle room.

Important: Take into account the exchange rate of your destination if you’re traveling outside the country. I budgeted $700USD for food, transportation and other expenses (barring flight and accommodation) for my two weeks in London, which seems like a lot (because it is a lot), but that really only comes to about  ‎£460 - or around  ‎£32 per day. Exchange rates can be killer.

2. Get a second job.

“Getting a second job” doesn’t mean “work 80 hours a week and give up any thought of having a social life whatsoever.” It can be as easy as occasional babysitting or picking up a freelance job on the side that only requires a few hours of work per week. I don’t make tons of money off of my freelance social media work and babysitting, but that extra $200 a month could cover the cost of a domestic plane ticket.

3. Purchase airline tickets wisely.

This will likely be your biggest cost, so don’t just buy the first airline ticket you see.

Use the right internet tools. Use Kayak to compare prices between airlines during the dates you want to travel. Kayak offers an email alert option which will send you a daily email of airfare to your destination, allowing you to snag your ticket when the price dips. Take advantage of Southwest’s regular fare sales (helloooo $98 roundtrip ticket to New Orleans); it’s worth it to sign up for emails from the airline. Sign up for airfarewatchdog emails, which will send you daily emails of airline costs to a variety of destinations from whichever origin airport you choose. Follow @airfarewatchdog on Twitter, as well, as they regularly tweet fantastic airfare deals.

Prices to Europe this summer went down to unbelievably low, I’m-obligated-to-purchase-this-ticket prices, where I was able to snag a ticket to London from Dallas for around $670 roundtrip. I noticed the low fares from following @airfarewatchdog, then I used Kayak to compare prices from different airlines before making my purchase.

Consider flying directly out of airports in major U.S. cities. This may mean driving to a different city, but this could save you an entry-level paycheck amount of money. For instance, it costs about $400 more to fly out of Nashville to most international destinations than it does to fly out of Dallas. So even though it means driving from Nashville to Dallas, saving $400 on airfare is worth a day’s drive and a mere $50 spent on gas to get there. So when searching for airfare to an international location, include nearby airports in major cities in your search. There is almost always a cheaper option than flying out of regional airports in smaller towns.

Get creative about getting to your destination. I had a friend travel to Iceland back in August for a very affordable price by flying Icelandair out of Boston. She then purchased a flight from Nashville to Boston, making the extra stopover worth it by staying a day in Boston to see the sites.

Consider flying into other cities close (or closer) to your destination and utilizing budget airlines in those areas. For example, a ticket to Amsterdam from Nashville in February would cost more than $1,000. However, you could purchase a ticket on WOW air - another of Iceland’s budget airlines - and fly to Amsterdam from Washington, D.C. with a stopover in Reykjavik for around $400. A flight from Nashville to D.C. is only $300, bringing your total to $700 rather than $1,000.

Looking to go to London? Consider flying into Dublin first - which is often (but not always) cheaper - and then taking one of Europe’s lowcost airlines, like Ryanair or easyjet to London.

The same can apply to domestic flights in the U.S., too. For my trip to Arizona in December, I found a flight on American Airlines that had an overnight stopover in Dallas - giving me an opportunity to spend an evening with my friends there - with an early flight to Arizona the next morning for about $100 cheaper than what it would’ve been to fly directly from Nashville to Phoenix in one day.

While it does take more time researching flights, getting creative with both outbound and inbound cities could potentially save you hundreds of dollars.

Use airline vouchers. Did you know you can purchase gift cards for airlines like American Airlines and Southwest (and likely other airlines, too)? You can. This is a very real thing. What a great Christmas gift request, am I right or am I right? (*hint, hint*)

4. Take advantage of frequent flyer programs.

I’m a member of American Airlines’ program, AAdvantage, so I can only write knowledgeably on that one. However, I would make the educated assumption that other airline programs are structured similarly.

AAdvantage (which is free to join) works like this: I accumulate miles based on distance flown. These miles can then be redeemed for flights once I have enough. If you are close to having enough miles to redeem a flight but still fall a couple thousand miles short, you can purchase miles for as low as $29.50 for 1,000 miles. So although you may not get the flight completely for free, you’ll at least be able to get it for significantly cheaper than paying the full airfare amount.

However, these rules will be changing beginning in March of 2016; miles will then be calculated based on the price of ticket purchased instead of miles flown and the amount of miles needed to redeem certain routes are increasing by a few thousand miles. Find more info about the AAdvantage program here.

This is a handy chart comparing major airlines’ frequent flyer programs.

Even if you don’t fly a lot, it’s still worthwhile to take advantage of airline frequent flyer programs. As a member of AAdvantage, I receive weekly emails from American Airlines offering discounts on hotels, car rentals and other partner companies; the 30% discount on a car rental will come in handy whenever I need to rent a car during my trip to Arizona.

Aside from discounts, there are also several opportunities to earn miles that go beyond purchasing plane tickets. For instance, shopping through certain partner retailers can earn me miles. Taking e-surveys also earns miles.

However, when it comes to choosing an airline to fly, I still always go with the cheapest carrier, unless American Airlines is only a few dollars more expensive than the cheapest option. It’s not worth it to spend hundreds more just to get the miles when I can earn those in other, more practical ways.

5. Use the right credit card.

Using the right credit card and using it correctly (aka not going into debt with it) can get you free things and free things are good. Here's a guide to credit cards basics.

I have two credit cards: Barclay Arrival World Mastercard and Citi / AAdvantage Platinum Select World Mastercard.

I pay off the balances in full each month so I avoid interest and keep a decent credit score. This is important. Going into debt with your credit card would defeat the purpose of getting the free things.

The Barclaycard Arrival World Mastercard has several perks: there’s no annual fee, no fee for international purchases (this is important for those traveling outside the U.S. as those fees can add up quickly) and you receive miles for every purchase you make. With travel purchases, like airline tickets or hotel bookings, you receive 2 miles for every $1 spent, making it an ideal card for frequent travelers.

It offers a great sign-up offer, too: spend $1,000 in the first free months and receive 20,000 bonus miles. Reaching the $1,000 spending is easy; instead of using your debit card for your daily purchases, use your credit card or consider putting your rent on the card. Those 20,000 miles translate to a $200 travel credit… so basically, the price of a domestic airline ticket… fo’ free! You can redeem these miles for any travel purchase - whether car rentals, hotel or airline purchases - making it super flexible as it doesn’t lock you into only certain partner airlines or hotels like some other cards do. Read more about the Barclaycard options here.

The Citi / AAdvantage Platinum Select World Mastercard works a little differently. Since it’s an American Airlines card, my purchases translate to American Airlines frequent flyer miles (1 mile for every dollar spent; 2 miles for every dollar spent on American Airlines purchases). There’s an annual fee of $95 on this one, but the first year is waived. Its current introductory offer consists of spending $1,000 in the first three months in exchange for 30,000 frequent flyer miles (the equivalent to a round-trip domestic ticket). Combined with the miles I already have, I’ll be close to a free flight to Europe. OH YEAH. Read more about this card here.

There are other cards available which might be more beneficial depending on which airline you frequent the most. This list provides a great rundown of some of the major travel credit cards.

When it comes to spending while traveling abroad, I tend to keep a low amount of cash on me - between $150-$200 simply for things like market purchases where only cash is accepted - and stick to mainly making purchases on my credit card. I find it easier to simply withdraw foreign currency from an ATM there rather than getting it from my bank beforehand, as Regions charges me a $15 fee and requires that I change over a minimum of around $250 (I can’t remember the exact amount), which is more than I need. However, Regions still charges a $5 other-ATM-withdrawal fee and a small percentage (I believe 3%) of the total I withdraw from ATMs abroad, but since it’s usually only a one-time withdrawal, it’s not a huge cost.

***

See How to Travel on a Post-Grad Budget, Part 2 on ways to save at your destination. Happy planning!


How to Travel on a Post-Grad Budget, Part 2

How to Travel on a Post-Grad Budget, Part 2

We're All Doing Alright

We're All Doing Alright