Quitting Your Job to Travel: How to Prepare Financially
If you buy something through the links on this page, you’re helping me pay for my next adventure—thank you for clicking! Learn more.
Sharing is caring:
How I’m Preparing to Quit My Job and Travel the World
I’ve officially set a date for quitting my job to travel: December 18th, 2020.
That’s going to be my last day of work in the corporate world as a consultant at a Big Four firm.
Now that I’ve set a date, it feels so much more real. I’ve decided I’m going to write a series about all the logistics of quitting my job to travel in the coming months leading up to when I actually do it!
First up: this post about how I’m preparing financially (and tips on how you can too.)
Why am I quitting my job to travel?
There are a million reasons why (which I’ll cover in-depth in another post one day) but the main reason I’m planning to quit my job to travel is that I want to see more of the world than possible with just three weeks of vacation each year.
This is something I have been planning for YEARS now.
There has literally never been a time in my life when I’ve gone on a trip and felt ready to come home at the end of it. I leave short trips feeling like I didn’t get to see enough of the destination and I ALWAYS want to stay longer. So I figure traveling long-term is going to be the best solution for me.
So how am I preparing for long-term travel?
This is exactly how I’m preparing financially for long-term travel.
Now that I’ve set a date instead of just planning to travel the world “someday” I need to make sure I have all my finances in order before I leave.
This is just what I’m doing personally, and keep in mind that I have my salary from my day job as a consultant and the money I earn from blogging.
You might not be able to save as much money each month, have more debt, have different expenses, etc. than me but it’s absolutely still possible to save money for long-term travel. I’ll include some tips that I think everyone can benefit from at the end of this post.
So here’s how I’m preparing to quit my job and travel:
Step 1: Paying off my student loans
Is it possible to travel long-term even if you have student loans? Yes, absolutely.
Plenty of travelers make it work. They just factor in the cost of their monthly student loan payments when they are saving up for long-term travel. So don’t let it hold you back!
But for me personally, I could not stand the feeling of having debt and I wanted to just get rid of it all as soon as possible. So I committed to aggressively paying down my $30,000 student loan debt for nine months, and I finally paid it off in February 2020!
If you don’t have student loans, congrats, you can skip this step. If you do have student loans, I would strongly consider paying them off before you travel. Otherwise you can just factor your monthly payments in with your travel savings. Either way, plan for it.
Step 2: Save for retirement
Saving for retirement is another really big priority for me.
Since starting my full-time job in August 2019, I have been contributing the maximum amount to my 401k and Roth IRA retirement accounts. By the time I leave to travel in December, I will have a healthy amount of money invested in my retirement accounts.
I’m a huge believer in starting to save for retirement while you’re still young, because you will have the power of compound interest on your side.
Most people who are quitting their job to travel will have no income or reduced income while they’re traveling. It’s a smart idea to have at least some money saved for retirement before you leave for long-term travel. The earlier you start, the more compound interest helps you.
Even if you can only contribute a small amount each month, it’s better than nothing!
Step 3: Save for travel fund
My top priority for a while, aside from saving for retirement, was paying off my student loans. Once I did that, I then saved $3,000 for an emergency fund (optional but highly recommended.)
Now that I’ve done that, I am redirecting all my extra money into my designated travel fund!
I use a Charles Schwab checking account for my travel savings account, which I love because it’s perfect for travelers. There are no foreign transaction fees and they reimburse all ATM fees so you can withdraw money from any ATM in the world for free.
Note: You can get a $100 bonus when you open an account using my referral link.
I set an automatic direct deposit from my paychecks to go into this account. I also send over any additional money to this account every month.
Related: How to Start a Travel Savings Account
My goal is to save $30,000 for a year of travel. I got this number by multiplying my planned monthly expenses ($2,500) by 12. This number is probably WAY higher than what I’ll actually need (plenty of people travel the world on $1,000 a month even!) but I’d rather have extra money leftover.
Spoiler alert: It was absolutely not way higher than what I needed, and I actually ended up averaging closer to $3,500 per month. Oops. So the lesson here is take whatever amount you THINK you’ll spend, and save at least 1.5x that amount instead.
Step 4: Keep growing my business
One thing I’m really looking forward to about quitting my job to travel is taking my own business with me on the road, and having a source of income while I travel.
Right now I’m making what you could technically consider a full-time income from blogging on Wander Her Way and two other websites I run, but I definitely want to increase my income further and I have a lot of plans for how I’m going to do that over the next nine months until I leave.
I’ve been making money from blogging for almost two and a half years now and though it’s taken a lot of hard work, it’s nice to know I’ll have guaranteed income coming in while I’m on the road.
If you want to learn how to start your own travel blog, read this post.
I want to grow my business to the point where I can comfortably earn enough money to travel and save each month, while still only working 15-20 hours a week on my websites.
Related: How to Make Money with a Travel Blog
Step 5: Getting rid of my stuff
As I get closer to my departure date, I plan on selling/giving away most of my stuff (like clothes and furniture) and putting that money in my travel fund.
When I leave my current apartment in New York, I’ll also get back my security deposit, which will be an extra $1,395 that I can add to my travel fund.
Selling your stuff can be a great way to make money for long-term travel fast, especially if you have some larger possessions (like a car) that you can sell. You can either have a big garage sale or just sell your things online on websites like Facebook and Craigslist.
How can you prepare for long-term travel too?
So those are the five main things I am personally focusing on right now as I prepare to quit my job and travel at the end of this year!
You might be thinking, that’s great and all for you, but I have a ton of debt/don’t make much money/don’t have my own business so there’s no way I can swing long-term travel.
Well, even if our financial situations are totally different, here are seven tips that everyone can follow to make their long-term travel dreams a reality:
1. Create a budget and track your expenses.
I use the free monthly budget template in Google Sheets to create a rough budget each month and then track every single one of my expenses for the month. It takes maybe fifteen minutes a month to set up and then less than five minutes a day to update.
I also use Personal Capital for tracking my net worth, including all my bank accounts, retirement accounts, credit cards, etc. This is also a 100% free tool to use.
Knowing exactly how much money I spend and make each month and what I’m spending my money on has been very critical in helping me to save more.
2. Decide on a date you’ll leave for long-term travel.
Once you decide on a departure date for your long-term travels, it will make it feel more real and you’ll have a definite goal to work towards and a set timeframe to accomplish it.
Whether it’s six months, a year, or three years from now, choose a date that you’ll officially quit your job to travel and mark it down on the calendar!
3. Decide how long you’ll travel for and where you’ll go.
I’ll admit I don’t know either of these things yet, but I am anticipating at least six months of travel and I know that Europe, South America, and Southeast Asia are at the top of my list right now.
Once you have an approximate idea of how long you’ll travel for and where in the world you’ll go, you can figure out a rough savings goal for your trip.
For example, if you want to spend six months backpacking Southeast Asia, you can probably budget $1,500 a month, plus $1,000 for flights and $1,000 for incidentals for a total savings goal of $11,000.
There are plenty of great resources online about how much it costs to travel in different countries/regions, so do your research and make sure you’re budgeting a realistic amount.
Once you know your savings goal, divide that amount by the number of months until you leave. So if you need to save $11,000 for your trip and you plan to leave in 18 months, you will need to save $611 a month in your travel fund to reach your goal.
4. Reduce your expenses.
One of the easiest ways to save money for long-term travel is to reduce your expenses.
Unless you’re living on an absolute bare-bones budget already, you can probably find some ways to save at least a few hundred dollars a month to put away for travel.
Here are a few things I do to reduce my expenses:
- Never take Uber or Lyft (I only walk or if it’s too far to walk I take the subway)
- Buy the same cheap groceries each week and eat the same meals over and over
- Never order food delivery (delivery fees and tipping add up fast)
- Limit going out to eat with friends to a few times a month
- Don’t have cable or any type of streaming service like Netflix, Hulu, etc.
- Live with a roommate to save money on rent
- Still living like a college student (even though I graduated over a year ago)
- Never buy a lunch when I go into the office (always bring it from home)
- Rarely ever go shopping unless I absolutely need something
- Never get haircuts or manicures or basically anything that’s a splurge
- Take advantage of free entertainment like museums, going for walks, etc.
Related: 10 Things to Stop Buying to Save Money for Travel
5. Increase your income.
The next best thing you can do aside from reducing your expenses is increasing your income. Yes, this one requires more time and effort than simply cutting your expenses, but it’s worth it.
This can be as simple as working overtime at your current job or picking up a side job like:
- Waiting tables
- Teaching English online
- Driving for rideshare apps
- Walking dogs
- Grocery/meal delivery
- Selling old stuff
Or you can start your own business. I’m obviously an advocate for starting your own business (especially an online business) because of the flexibility and freedom it provides, but it’s not for everyone and it’s definitely not an “easy” or quick way to make money.
Related: How to Start a Travel Blog for Beginners
But whatever the choose, the more time you spend working, the more money you can save for travel and the less time you’ll have to spend money. 🙂
6. Automate your saving.
If you know you can save a certain amount of money from each paycheck for travel (for example, $200) go ahead and automate that action!
Instead of manually transferring the money from your regular bank account into your travel savings account, set up an automatic transfer every two weeks or however often you get paid.
Putting your savings on autopilot will reduce the temptation to spend any extra money you have.
7. Plan for re-entry.
One very important thing to consider is what you’ll do when you return from your long-term travels.
If your goal isn’t to run your own location-independent business or perpetually work abroad, then chances are you’ll need to come home and get another job at some point.
In some professions, taking six months or a year off to travel won’t matter at all and you’ll easily be able to come home and get another job in your field.
For other professions, a gap on your resume for long-term travel might raise a few questions, but you can usually spin long-term travel into a positive thing and it’s definitely a conversation-starter!
Regardless, make plans for what you’ll do when you return home and save some extra money if you think it will take you a few months to find another job when you get back.
I know I’m lucky to be in my financial situation, but even so, you really don’t need to make a ton of money in order to reach your savings goals and travel long-term.
Especially if you are in a similar situation to me: in your twenties, no kids to support, no mortgage, etc. This is the best possible time to save for long-term travel!
Here are a few of my favorite posts from other bloggers about how they saved money for travel:
- How I Saved $13,000 for Travel in Just 7 Months from Adventurous Kate
- How I Saved $44,000 to Travel the World from Heart My Backpack
- How We Saved Over $50k to Travel the World from The World Pursuit
- How I Saved $50,000 to Travel the World Full-Time from Eternal Arrival
- How I Saved $35,000 to Travel the World from The Traveling Spud
These bloggers go to show that you can save a lot of money in a relatively short amount of time, even on a lower salary and living in an expensive city.
I hope you enjoyed this post and found it helpful!
The countdown to quitting my job and traveling the world is on. 🙂
Save it to Pinterest:
About Denise Cruz
Denise is a marketing executive who escaped corporate to travel the world… twice. A Brazilian native living in the U.S., she’s lived in 4 countries and visited 35+ others. After side-hustling her way to financial independence, she curates solo destination guides, slow travel tips, and travel blogging advice on Wander Her Way. When she’s not on the road, you can find her in Miami with her dog Finnegan.