“One penny saved is a penny earned.” Former banker converted into a full-time traveller, I can only share the opinion of Benjamin Franklin.
Today we see… how to go on an adventure without going into debt!
Step one: Define your daily variable budget
As it is difficult to act on fixed expenses such as telephone, internet, rent… We will work to define a so-called variable daily budget that we can more easily manage to plan our trip.
Income (s) – Mandatory fixed expenses (rent, telephone …) = Variable budget
Calculation of the Daily Budget:
Monthly Variable Budget / 31
Step two: Evaluate your variable expenses
Make a list using your bank account statement) and write down all your our variable expenses (excluding rent, gas bills).
To go further = categorize your different spending areas, according to your lifestyle: cigarette, Starbuck coffees, clothes…
Analyze your budget and expenses, if your expenses are too high, take the step “to go further” where you analyze each area of expenditure to find out where you could save. Calculating your finances in a daily budget simply makes you more aware of what you spend.
Monsieur Dupont buys a black coffee every morning before going to work. The coffee is 6.50 CAD. He works 5 days a week, 20 days a month.
Calculation = 6.50 * 20 = 130 CAD / month
130 * 12 = 1560 CAD / year
You would be surprised to see the number of precarious workers or students making this kind of expense. I love coffee, but I prefer to buy a 4 CAD mug and have a good coffee at home before going to work. Which pays a beautiful holiday!
Step Three: Practical Tool
You can do this daily operation on paper, but it’s more convenient to download a daily budgeting application. Personally, I use daily budget, completely free, but there are many others.
Enter a budget that is honest about what you can spend. The best is that it is above what you estimate to be your daily expenses. You do not want to be it “red” at the end of the month, nor you want to be frustrated because your budget is too low.
Important: set aside “little extras”, this will avoid any possible frustration and will give you a sense of freedom that is paramount.
Step four: Plan your trip
Then create an upcoming expense, say a two-week trip that you plan in 6 months with friends. Let’s say it will cost you, 1000 CAD. That’s 1000/180 days or 5.55 CAD per day.
Do not be too hard on yourself. Do you have at least 300 at the end of the month? Raise your budget if you can afford it, or reduce some spending to allocate it to others.
Again, a small extra budget is important.
Doing my wholesale shopping once a month costs me less than doing it every day, so of course, the first of the month if my daily budget is 20 CAD (excluding housing, internet, insurance and fixed costs), goes into taking a cost. But on the 15th of the month, I will not make any other purchases in groceries. So at the end of the month, my account will be “green”. Hoping that this simple little trick allows you to travel and leave more serenely.