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Although I’ve always had a desire to travel, I didn’t have a passport until shortly after I turned 23. Over the last 14 years, I’ve made up for lost time and visited over 55 countries on every continent except Antarctica (which I hope is soon to come).
At the same time, I’ve been laser-focused on becoming financially independent as I’m part of the Financial Independence, Retire Early (FIRE) movement. This financial lifestyle aims to save and invest as much as you can so that you can live off your savings as soon as possible.
While it may seem that wanderlust could get in the way of financial independence, throughout my travels, I have found ways to work towards both goals, including these money lessons learned while traveling around the world.
» Learn more: Smart ways to travel cheaply
You don’t need to spend a lot of money to have an amazing trip
If you look at social media for travel inspiration, you may fall into a trap thinking the only way to have an amazing trip is to fly Emirates first class to an overwater villa in the Maldives. While certainly enjoyable, you should remember that you don’t need to spend a lot of money to have an amazing trip.
Even if an Emirates first-class trip to the Maldives is your dream adventure, you can find ways to go that don’t involve spending a lot of money, such as using points to book your Emirates first-class flight and for your villa in the Maldives. That said, you should keep in mind that you can have some truly incredible travel adventures that won’t break your budget. For instance, some of my favorite travel experiences include staying at hostels in Japan, Australia, and France, bus and train trips around Europe, and spending $20/night for a 2-story bungalow on a rice paddy in Bali.
Be clear about your travel budget before traveling with friends
When traveling with friends, it’s always important to be clear about your travel budget upfront. For instance, you may be traveling with a friend who makes significantly more or less than you or who has an entirely different idea of how much they want to spend on the trip.
I’ve learned that it’s crucial to discuss travel budgets and expectations before booking trips with friends. Having this conversation before you commit to a trip can help you avoid ending up in an awkward situation and also help ensure that everyone enjoys their trip to the fullest.
» Learn more: A beginner’s guide to budget travel
Setting (and sticking to) an annual travel budget helps you enjoy your trips
I enjoy traveling while participating in the FIRE movement because I set — and do my best to stick to — an annual travel budget.
In creating such a budget, you should start with your income after taxes and deduct necessary expenses (like rent/mortgage, medical expenses, food and retirement savings). What you're left with is discretionary income. From your discretionary income, you should set aside the amount that you want to be dedicated solely to travel.
When traveling, you shouldn't have to worry about money if you stay committed to your travel budget and planning. Since no one wants to be poolside fretting over how much was spent on dinner the night before, budgeting is a great way to help you maximize enjoying your trip.
» Learn more: How to stick to your annual vacation budget
It’s OK to splurge if you plan for it
You absolutely can splurge on expensive trips, provided you plan for them in advance. For instance, let’s say your dream trip can’t easily be booked with points or miles. You can still make these trips happen either by setting aside part of your travel budget each year and putting that money into a travel fund towards these trips or by using your annual travel budget for that one epic trip.
Final thoughts on budgeting for travel
With a bit of effort, you can travel the world while still making financially intelligent decisions and setting yourself up to meet your financial goals. On top of that, having a travel budget in place that you stick to on your trips can help ensure that you aren’t worried about money when you travel, which will add to the enjoyment of your trip.
How to maximize your rewards
You want a travel credit card that prioritizes what’s important to you. Here are our picks for the best travel credit cards of 2023, including those best for:
Flexibility, point transfers and a large bonus: Chase Sapphire Preferred® Card
No annual fee: Bank of America® Travel Rewards credit card
Flat-rate travel rewards: Capital One Venture Rewards Credit Card
Bonus travel rewards and high-end perks: Chase Sapphire Reserve®
Luxury perks: The Platinum Card® from American Express
Business travelers: Ink Business Preferred® Credit Card