How do you save?

Money is what I'm saving up for, who isn't?
I'm really stuck on how to save, as the money I'm currently saving is taking a long time.
I know each of our cases are different, but how do you do it? How much of your earnings do you put aside(in percentage) for rent, food, saving, stuff you want to buy? What sort of things do you 'comprimise'? Such as very rarely going out on Friday nights; survive on bread and canned tuna; live with your parents??
Do you have a funds manager? Have you bought some shares for investment?

Also, when do you know its time to start booking your plane tickets?

Many people save to become 'wealthy'. Is that your goal?

[ Edit: Edited on May 11, 2007, at 5:22 PM by bennnn ]

I only save to my next ambition, whatever that may be. I live with my parents and stick to pretty much the same plan every pay check.... $200 to savings ( a separate high interest account that costs $5 to withdraw from... ouch), $100 for spending, $200 to bills, $100 for groceries and $100 leftover for whatever may be needed. I do have a "financial advisor" who helps me stay on track and helps me plan for various payments.

As for the actual savings.... I keep an envelope in my purse, it's covered with pictures of my next trip (right now it's Australia) and I put the money to save in there.... so then, whenever I think of "borrowing" money from my savings, I have to look at the pictures and that reminds me why I should NOT borrow the money! I know the envelope system works for a lot of people. Some even have multiple envelopes..... savings for flights, clothes, entertainment.... it's an easy budget if you can restrain from taking from the envelopes.

Overall my total expenses are 10% of my take-home income each month, so I'm saving 90%.

I've been living cheap for years, so I don't even really feel like I 'compromise' at all. The two major expenses that suck most peoples' money are housing and their car. I minimize both of these by living in a cheap apt with a roommate and driving an old car without a payment. Other than housing and transportation my expenses are pretty minimal - food, internet and cell phone. I don't go out often because I work seven days a week to maximize my income.

I'm saving to become comfortable where I can travel on my investment proceeds and not have to work. Won't get wealthy because I'll stop working before I ever get to that point.

Quoting vxmike

Overall my total expenses are 10% of my take-home income each month, so I'm saving 90%.

You either earn a lot, or are a Buddhist monk.

I opened up a savings account and put all my extra funds in there. I've locked it so that I can only access that account from my bank, so it's safe from any impromptu shopping sprees (although I'm pretty careful about money, in general). I also take on freelance work when I can. That often means working weekends, but it lets me save up even more so the sacrifice is worth it. Other than that, I'd suggest cutting out those little extras, or limit yourself to $X per week for a few pints after work.

You can also sit with a financial planner, who can show you how to make the most of what you earn and give you tips on good ways to save for the short and long term.

Good luck!

The way to save funds for travel is being a scruge even to the point of saving 5 cents on an item. If their is a certain thing that you feel you can't go without ie chocolate, set yourself a maximum price (preferably a special price). Like chocolate is my weak point and I have set my maximum price of $3.29 (which is the special price). If it is even 10 cents more than that I will not buy it, but when it gets to $3.29 or lower I buy a number of blocks to keep me happy until they come on special again. If you were to eat McDonalds for lunch instead of getting a large fries you'd get a medium fries ie downsizing. Instead of buying cordial drink tap water, instead of going out every Friday go out every 2nd or 3rd Friday, instead of spending $50 at the bar every Friday have 3 beers and be done with it. Stuff like that will save you a fortune. If you do that sort of thing and are strict with yourself like that, you will save up. It especially helps if you can live with your parents and only pay board. Like with my scruge ways I manage to save about 80% of my fortnightly money (which isn't particularly much money, but it helps when my daily food other than chocolate costs me $1.00 and my transport costs $0.60 a day on bus fares instead of spending a fortune on petrol or food). Also you have a net based savings account (so that you get a higher interest rate with no monthly fees) and then after you reach your first $1000 or so you take it out and put it in to a termed deposit to get an even higher interest rate (it pays to shop around when doing that).

When you know it is time to book the tickets would depend on how long you wish to stay away and if you wish to work on the way. If you want to have a great RTW trip covering loads of countries and be away for 6+ months then $10,000AUD not including your RTW airfare will be a safe limit. If you have less than that but still over $5000AUD after you've paid for your RTW ticket, then it will just mean you have to be a lot more careful with your money while you are away and save where ever possible even if it means staying in a $20US a night hostel instead of a $22US a night hostel in the same area. Also when you're away eating supermarket food instead of takeaway is a way to save a lot. When you need to use the phone while you are out for a local call instead of using your mobile find a pay phone if possible and call from there. If you do that, then your monthly mobile bill will be reduced by heaps.

Start being strict on yourself and taking away a lot of luxuries. Set your priorities and goals straight ie do you think it is more important to have a bit of fun at home spending all your money or having the time of your life travelling the world spending your money. If you sit their with all these dreams but wasting all your money at home and basically having a few hours of enjoyment and then pissing all your money out in to the toilet from drinking expensive alcoholic beverages every weekend, you will never fulfil any of your travel dreams.

Believe me it is better to have a fairly boring life at home for a while to save up to have life experiences that most will only ever dream of. When you are urging to buy this luxury think do I really need it, then when you think to yourself no I don't NEED it but I would LIKE it, then don't buy it only buy it if it is a NEED. Delay getting your haircut a couple of weeks and then over the course of a year you will have saved the amount of money of one haircut. It doesn't sound like much, but if you do those sorts of things with a lot of stuff the money soon adds up. When you do save up a sum of money DO NOT urge to buy this thing you want until it means you are ready to buy your RTW airline ticket.

My dream when I was in primary school was to become a millionaire and travel to every country in the world. I'm about 1/7 of the way through the country list, but unless I win lotto I'm afraid my travel bug will not get me wealthy for any prelonged period of time.

[ Edit: Edited on May 12, 2007, at 7:59 AM by aharrold45 ]

Quoting james

Quoting vxmike

Overall my total expenses are 10% of my take-home income each month, so I'm saving 90%.

You either earn a lot, or are a Buddhist monk.

Combination of both. I do have a pretty good income, but I live very cheap/simple. I have the same lifestyle at home now that I had when I was earning 25% of what I do today.

Quoting aharrold45

Believe me it is better to have a fairly boring life at home for a while to save up to have life experiences that most will only ever dream of. When you are urging to buy this luxury think do I really need it, then when you think to yourself no I don't NEED it but I would LIKE it, then don't buy it only buy it if it is a NEED. Delay getting your haircut a couple of weeks and then over the course of a year you will have saved the amount of money of one haircut. It doesn't sound like much, but if you do those sorts of things with a lot of stuff the money soon adds up.

This summarizes my feelings EXACTLY. Totally worth the sacrifice in my opinion.

I have a friend cut my hair for FREE. Best deal ever!

Overall I do not spend that much for luxury, i.e.: going out on the weekend, buying new clothes, travelling, etc.
What I do instead is, to hire DVD movie, read travel magazines, surf internet, cooking inside my home.
I save my money in order to buy better camera equipments, as I am semi-pro artist photographer.
You could check my site and find it by yourself:
-snip-

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[ Edit: Removed website link. ]

Hi all
This is what we did for our first RTW trip:
- first, we figured out approx what the trip would cost and how long it would take to save for it - about $5000 plus at home expenses while we were away, another $6000 at least, and a cushion for when we got back home jobless and broke $3000 -- it would take us 6 months to save that much
- canceled cable TV ($30 per mo)
- canceled phone options like voicemail, etc ($20 per mo)
- opted for the cheapest long distance service we could find
- reduced car insurance by shopping around for a better rate ($50 per mo)
- paid off car as there were only a few more payments
- stopped going out to dinner ($50 to $80 week!!)
- cut back on the liquor store trips & groceries
- stayed home and partied by ourselves (we had a big house with a large record collection and room for dancing)
- only bought stuff for our trip (except for our wedding expenses - and for that we had the wedding and reception at home, I borrowed a dress, had a friend do the catering, and since it was the day after Christmas, the house was already decorated...El Cheapo wedding that was the blast party of the year!)
- we both worked full time and then some (I had a high paying job so that helped)
It worked out, though we did end up using the credit card on the trip towards the end.

Our second RTW trip was under quite different circumstances. My musician husband had a year long gig in Hong Kong and we lived on the cheap because all expenses were paid plus he got a very nice salary. We saved most of it, went on a 5 month trip and had plenty left over to lounge around here for a while.

I guess everybody's situation is different. The best thing to do is to find creative ways to earn extra income as you can't cut back on everything.

Martha