Curiosity about how we fund Our Wayfaring Life is fairly common. It is something we have been asked from time to time and there is likely some intrigue given we are in our early 40s. Having had discussed this topic with other caravanners and campers has taught us there are a variety of ways to fund a trip caravanning or camping around Australia. Most common methods are savings, superannuation, pensions, profits from a property sale, passive income from investments, working, running a business or a combination of these. What every traveller says, is regardless of how they are financing their traveling it took determination, prioritising and commitment. Non will tell you it was “luck”; it was hard work and sacrifice.
HOW WE FUND OUR WAYFARING LIFE
Most of the money we are currently using is funds we saved before we set off to travel indefinitely in our caravan. In addition to our savings, we receive rental income sufficient to cover all property expenses including mortgage repayments, rates, insurances and so forth as well as provide us with a small income. This income is not enough to fund us in full so once our savings are depleted we will need to work.
So savings, how much, how long to save and how did we save?
HOW MUCH SAVINGS?
On the day we drove away from what had been our home for 10 years in the Blue Mountains west of Sydney we had purchased our tow vehicle and caravan from savings as well as had sufficient fund to pay for 12 months of traveling and additional funds for incidentals such as major car repairs.
How we determined our travel budget is explained in our article Budgeting for Ongoing Travel Around Australia. The article also provides tips on how to determine your weekly budget for caravanning Australia.
Our choice to have sufficient funds for 12 months of travel was made for the following reasons:
- we wanted an extended break from working and 12 months seemed adequated
- we wanted to be able to enjoy some time traveling before having to commit ourselves to going to where we can find work
Really what it has given and will continue to give us, is the freedom and choice to do what we want and go where we want for the first 12 months. What traveling and or living on the road means to you and how much savings you will need is something only you can decide.
HOW LONG TO SAVE?
Nine months it took us to save the funds we decided we wanted. Nine months of working full time, living to a very strict budget, increasing our income and saving every single cent and dollar we could. Initially we had given ourselves eighteen months to reach our savings goal but when it became apparent we would achieve it sooner and with my work was having a negative impact on my mental health it became an easy decision to bring the date of departure forward.
It may take you less time or longer to save or get your funds ready depending on your resources and current financial commitments but one thing is for certain you have to start saving.
HOW WE SAVED?
Essentially we did three things to significantly increase the money we had to go into our savings:
- we reduced our spending and costs
- we increased our income
- we created a strict budget and were disciplined about sticking to it
Ultimately the aim is to be in the situation where you are living well below your means because the more money left over after meeting your financial commitments the more that you will have for savings.
1. Reduce Spending and Costs
- Assess Current Spending:
The very first things we did was we very closely and honestly looked at our spending for the previous 12 months. Daryl and I use our debit cards for 99% of our spending so while it was a process we were able to assess our spending by methodically going over our bank statements.
I literally had multiple bits of paper and I wrote down every expediture and expense under one of the following categories:
- Car maintenance
- Eating out and entertainment
- Mobile, home phone and internet
- Memberships and fees
- Odds and sods
- Home maintenance
Once the information was collected and calculated we looked at where we could reduce our spending and cut our household costs. Here some ideas for you to consider:
Mortgage is very often a household’s largest expense. Large amounts of money can be saved by having a loan product that suits your circumstances. There are so many options available when it comes to home loans, my advice is speak to a mortgage broker and at the very least explore your options.
If your savings goal is likely to take you a year or more to achieve you may wish to consider moving into a cheaper rental property. Or perhaps moving into shared accommodation. There are even situations where want to be caravanners have found some where cheap or free to park their caravan and they then live in their caravan while they are saving. Consider all your options.
- Credit Cards:
I am not a fan of credit cards so I don’t have one. In these circumstances of saving to travel around Australia it is about living below your means so you have money to save. Credit cards are contradictory to this because you’re spending money you don’t have. Still many people have them and if you are one my tips are:
- get rid of them if you can
- stop using them unless you can comfortably pay off the full balance each month before any interest is payable
- if you have credit card debt pay this off before building your savings
Car, home, contents, health, income and other insurances are very often necessary expenses. Insurance policy costs can add up especially if you have multiple policies like we do. There is, as I learned potential to save some serious coin where insurances are concerned by reviewing each and every policy you hold to determine:
- How much cover you have
- What it is costing
- Is the policy still the best one; then
- Getting online and check if there are better deals that would suit your needs at a cheaper price
- Armed with the online quotes call your current insurance providers and offer them the chance to either match or better the quotes
When I did this we ended up with more cover and reduced premium costs for all except one car policy which was as good as I could find. In all but one instance our current insurance providers match or bettered the competitors quote. Where they wouldn’t at least match the quote I changed our provider. Overall while a little time consuming and I had to use my best negiotation skills we were able to reduce our insurance costs significantly.
- Phone and Internet:
Not everyone will be but we were in the position of no longer being locked into any contracts for our phones (home or mobile) or internet. Taking advantage of this I contacted our providers and negotiated cheaper deals with no ongoing contracts.
- Electricity and Gas:
There are comparison websites to help you find the best and more affordable energy providers. Personally I looked into this but found because our gas costs were $10 per week and electricity $25 per week that there was very minor savings to be made and could only be achieved by signing 2 year contracts. Your circumstances may be different and it is something you should explore for yourself.
- Subscriptions and Membership Fees:
We did not have any of these except Daryl’s golf membership. We chose to continue his membership because he was still actively using it and while saving for our travels was a priority so was having some life in the meantime.
I suggest cutting off all unnecessary subscriptions such as Foxtel, Netflix, magazines and so on. While they are a nice luxury they are not necessary. Alternatively especially with Foxtel it can be well worth negiotating a cheaper deal. My tip based on two different friend’s experience is tell Foxtel you want to disconnect your service and then stand your ground. Both friend’s over a couple of days or weeks were given numerous offers each cheaper than the previous with more extras than the last. Each saved in the end over 60% on their Foxtel account each month.
- Reduce Your Food Bill:
When going over our bank statements we soon discovered (or at least I did) that Daryl was spending over $100 per week on takeaway food. We also came to realise that we were throwing away a lot of food simply because it was perishing before we had a chance to eat in other words we were buying surplus to our needs. So with this information:
- Daryl started taking lunch to work and stopped buying takeaway food
- We meal planned every week
- Shopped to a shopping list based around our weekly meal plan
- We ate leftovers (usually becoming Daryl’s lunch at work)
By doing these simple steps we cut our food bill by half!
- Break A Habit
Think about giving up a vice or pleasure you regularly enjoy that is making small but significant impact on your budget. Buying a coffee every day is something that comes to mind. Many people enjoy a takeaway coffee or two every day and at (approx) $5 per coffee, that’s $35-45 per week or $1820-2340 per year. Twice that if two of you are drinking takeaway coffee every day and four times that if both of you are having two coffees a day.
Maybe it isn’t coffee. It might be a snack bought in your lunch break to get you through the afternoon. A beer every afternoon on your way home from work. It might be another item for your collection of frogs. It could be anything. Now is the time to think about your priorities and while giving something up completely may not be the answer, being more selective about when you enjoy them could be.
- Buy Nothing:
This was an agreement Daryl and I had with each other was that we would stop making incidental purchases. That we would make do with what we already had and if it became necessary to buy an item that we would discuss it and do our research to find the best price.
2. Increased Income:
Opportunities to increase your income will vary significantly from individual to individual and family to family. Increased income or money can come from a variety of resources such as:
- taking a promotion, a higher paid position or working additional overtime
- selling goods you have but no longer need
- renting out space you don’t need or use
- sell items online or at markets
- move savings into higher interest savings accounts
- some sell their house
What we did ourselves was:
- sold some household items (we also gave away countless amounts of things)
- sold our cars
- for 6 months we rented out our granny flat as a holiday rental managing it ourselves through Airbnb; this ended up being more successful than we had anticipated
- Daryl took a higher paying job
These all brought into our household sufficient income to really boost our savings.
3. Created a Weekly Budget
A realistic but tight budget that had all our expenses was 100% essential to our savings success. We knew down to the dollar how much to put aside each week for all our expenses and we built in a limited amount each week for things like entertainment. Then we stuck to our budget and lived like poor people.
One of the things we did to help us to stick to our budget was we had all our income from our jobs and the rent for our granny flat paid directly into our savings account. We then, each week withdrew our budgeted weekly amount to live off and pay our bills.
Overall between our reduced spending and costs, increased income and strict budgeting we were able to live off one income and save the other plus save the earnings from renting out our granny flat. With commitment and prioritising you too can significantly improve your chances for saving towards your dream of caravanning Australia by doing the things we suggest. You may even have your own ideas too.