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 some additional intrigue given we are in our forties well below the age of retirement. During our travels, in conversations with other caravanners we have discussed how they fund their travels and laps around Australia. What we have learned is there is a variety of ways to fund your travelling or caravanning. The most common methods are savings, superannuation, pensions, profits from a property sale, passive income from investments, working, running a business, personal loans or a combination of these.
We funded our first year of Our Wayfaring Life from our savings and this article we will share with you how we saved enough money for a year of travelling in less than a year.
- How We Funded Our First Year
- How Much Savings?
- How Long Did It Take Us To Save?
- How Did We Save?
- Tips for Saving Money
- Increase Your Income
- Created A Weekly Budget
- Keep Your Savings and Spending Accounts Separate
- Reduced Your Spending and Costs
How We Funded Our First Year
Our first year of caravanning around Australia was mostly funded through savings we had racked up in the year before we started to travel. In addition to our savings we also used money from my paid leave (8 weeks of leave) and a small income we receive from investments.
It was a deliberate decision by us to save enough money to travel for our first year so that we wouldn’t have to pick up work along the way. The reasons for this decide was that we had both left highly stressful jobs and wanted a year of travelling to rest and recover, also we wanted to be to adjust to our new way of life, go where we wanted, when we wanted without being tied to responsibilities like a job.
How Much Savings?
On the day we drove away from what had been our home for 10 years in the Blue Mountains NSW to start our life on the road we had purchased with cash our tow vehicle and caravan, had enough money in our savings account to fund a year of travelling plus had money in our emergency fund. So how did we save $35000 (our yearly travel budget) plus save enough money to pay cash for our caravan and tow vehicle all in less than 12 months?
After making the decision that we wanted to travel Australia for year without having to work we then figured out how much in savings we would need for that year. As discussed in our article Budgeting For Ongoing Travel Around Australia, which provides tips on how you too can determine your travel budget, we determined our budget for a year of travelling. Then we got busy, busy saving as much as could, as quickly as we could. Keep reading to learn about how we did and learn some ideas/tips that could help you too save for your travels or lap around Australia.
How Long Did It Take Us To Save?
Nine months it took us. Nine months of living to a very strict budget and saving every single cent and dollar we could. In addition to the strict budge and squirrelling away every cent we could we also worked as much as humanly possible and found other ways to increase our income (which I will discuss later in this article).
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 our departure date forward. For you it may take you less or more time to save than you had planned or hoped but one thing is for certain the sooner you start the sooner you will give achieve your savings goal.
How Did We Save?
Essentially to save as much money as we could as quickly as we could we:
- We increased our income
- Put money in our savings account before our spending account
- We created a strict budget and stuck to it
- We reduced our spending and costs
Ultimately to save and to save quickly, we put ourselves in the position where we were earning as much as possible, we knew where all our spending money went and had a realistic idea of how much we could save each week. We made absolutely sure we were living well below our means. So by doing all these things we were able to save over 50 per cent of our net income.
Tips for Saving Money
Increase Your Income
Opportunities to increase your income will vary significantly from individual to individual and family to family. Some ideas for increasing your income include:
- work more, take a promotion, a higher paid position, take a second job
- 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 specifically did to increase our income was:
- We rented out our Garden Studio as a holiday rental. We invested some initial money into fixing up the studio and setting it up with the furniture and supplies needed. (Daryl did all the improvements himself and we used second hand and budget items where we could). Then we took on the job of running it ourselves through an online holiday booking website. This meant our time managing bookings, dealing with guests, cleaning and ensuring we had the necessary supplies. In the end, it was well worth it with the studio having a high occupancy rate at prices we were very happy with. This helped us significantly to increase our overall income.
- We sold household items we no longer needed. Somethings we sold pretty much immediately and other things as time got closer to our leaving date. It wasn’t possible to sell everything so we also gave away a lot of items but of the things we did sell we were able to make a decent addition to our savings.
- We sold our cars. Neither of the car Daryl and I drove as our daily drive was suitable for life on the road. We sold Daryl’s car when we bought our tow vehicle (this became he drive to and from work) and mine in the week prior to leaving for our travels around Australia.
- Daryl got a higher paying job. More pay, more money for savings.
- We accumulated our annual leave. During the time we were on our savings journey neither of us took any leave from work (other than a very rare sick day). When we actually started our caravanning around Australia our initial months of travel were funded by our annual leave which was lovely.
Created A Weekly Budget
Not everyone is a fun of budgets. And even more people find them difficult to stick to. However a realistic but tight budget that covered 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 and needing to replace the brakes on one of our cars. Then we stuck to it and lived (by choice) like we barely had two cents to rub together.
That said, we did after about the first month of living to the budget we had determined for ourselves, have to make some adjustments particularly to the overall amount. So we did, but we made sure we understood why we needed the additional funds each week and where they money would be spent. Just randomly increasing your spending budget at regular intervals without understanding why it is needed will only lead to you having less and less money for your savings. For me, being completely aware of where all my money goes is necessary for me to able to successfully stay on budget and save.
Keep Your Savings and Spending Accounts Separate
Having at the very least two accounts – a savings account and a spending account – is essential, it was to our savings success. It is also just as or more important that you use each account as it is intended.
When we got to the point, after a month or two of being confident we were on a budget that meet all our spending needs, it was then fairly easy to use each of the accounts as they were intended. Put simply money in our savings account was viewed as solely for our future travels and couldn’t be touched for any other reason and our spending account was viewed as having the only money we had to live off.
Something else we did, which I also give credit to being part of our savings success, once we got used to living to our budget was we had all our income paid into our savings account and each week (on Mondays) from our savings account we transferred into our spending account our budgeted amount. This helped us on our savings journey because we had multiple sources of income, some which changed week to week, and it meant any additional income we had earned for the week would be in our savings account as soon as we received it. Otherwise if our income was paid into our spending account we would have to work out each week or fortnight what was surplus to our budget needs and then move that amount to our savings account. That just seemed like too much work.
A benefit of only having your budgeted amount going into your spending account each week is that it is much easier day to day to see how much money is remaining of your budget. We often spoke about feeling rich on Mondays and poor by Sundays. We chose Monday as the day we transferred our budgeted amount into our spending account so we knew we could put petrol in our cars to get to and from work for the week and we knew if by the weekend there was money still in the account we could use it for things like a cheap date together.
Another benefit of having the two accounts and having your income go into your savings account is that you can see your savings account grow. There is something rewarding, at least there is for me, to see the amount in the savings account go up and up knowing with each dollar saved I was closer to being on the road and travelling.
However you decide to manage your spending money and your savings, try to keep them separate and be clear which is which.
Reduced Your 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. It took some effort but in the end we found savings on our mortgage by negotiating with our lender and changing our home loan product.
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.
I am not a fan of credit cards so I don’t have one. Credit card debit can be crippling at the best of times and is not a noose you want when travelling so my tips when it comes to credit cards and credit card debit are:
- get rid of your credit cards, literally, 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 that we have. They are for us. 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
- Often it is significantly cheaper to pay annually than monthly, so pay annually if you can
After doing our research and getting quotes from other providers we ended up with more cover for less money for all our policies except for one car which was as good as we could find. In all but one instance our current insurance providers matched or bettered the competitors quote. Where they wouldn’t at least match the quote I changed providers. Overall while a little time consuming and I had to use my best negotiation 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 kind of 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 negotiating 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. Both ended up saving 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 it. In other words we were buying food 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.
An agreement Daryl and I made with each other was that we would stop making incidental purchases and impulse buys. That we would make do with what we already had and if it became absolutely necessary to purchase an item that we would discuss it and do our research to find the best price.
Set Limits For Gift Buying
Buy gifts for those you care about and are important to you but time the time you add up buying birthday gifts, Christmas gifts and other gifts throughout the year it can really put a dint in your budget. That said there is no reason to be a Scourge either, instead of focusing showing you care by how much you spend buy or make gifts that are thoughtful. Also you can buy gifts for each other and or your children (if applicable) that will be useful when you travel.
Put Your Tax Return Into Your Savings
If you are fortunate enough to receive money back on your tax return don’t spend it put into your savings. Remember you will get to spend it, eventually, when you are on your lap around Australia or travelling ongoing.
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.
Originally written and published: 26 April 2018
Edited and republished: 13 December 2019