I would not use the word saver to describe myself on an otherwise normal day. My closest friends or family will gladly tell you that. Yet, before I made my final decision to travel and move abroad for a career break and explore the beautiful continent of Europe, I managed to save $14000 to allow myself to live wherever the hell I wanted for a period of one year, if not more.
I didn’t take money from my parents. I didn’t get a scholarship. I didn’t take a loan. I didn’t win a lottery.
I had known the first time I did my semester abroad in 2013 in Europe, that I wanted to come back to live here. At that point, I was 21 years old barely scraping through a business school where everyone seemed smarter, more mature and hell of a lot more experienced than I was. Well, I was 21 and fresh out of my bachelor, so yes I didn’t know jack-shit. I even questioned why I was there in the first place. I mostly hated having to be in that business school, but little did I know it would give me the chance to explore a new continent I now call home and the courage to do anything I put my mind to. Sometimes, in life things don’t turn out the way you first imagined it to be, but when you look back and connect the dots it all makes sense. (Credits: Steve Jobs, I am nearly not that reflective yet).
Once I graduated from business school, I had a job most people in India could only ever dream of. Yet, I quit that job in six months and that’s a story for another post. I proceeded to work on building a start-up after taking a drastic pay cut and I have to say, even though this was one of the most fulfilling times in my career, it was also financially the most stressful. So much for following your heart, eh?
In a sum total of two years of full-time work experience after business school, I managed to save $14000 to travel and move abroad, most of which happened in a crunch period of 6 months, whilst having a $10000 student loan. How did I do it?
You see, I had promised myself in the winter of 2013, that I would move back to Europe before I turned 25, and I don’t know if the universe aligned all the stars to make it happen or it was my sheer will that gave birth to this. But everything in my life in 2016 led to this. Every single thing.
At the beginning of 2016, I got hired to lead a business vertical for another start-up with a pay hike from my previous one. Little did I know, I had jumped into a sinking boat. Six months later, this start-up was on its way to shutting down or being sold off due to a number of reasons I don’t wish to get into this post. Anyhow, what was I to do?
This was when I saw moving abroad as a perfect career break. If I didn’t follow my heart and chase my dreams, when would I? I was mentally and emotionally depleted from working day and night and managing an intercontinental relationship that at the same time had also collapsed. What did I say about the universe conspiring?
With my other alternative being moving to Sri Lanka or Philippines to lead a German start-up (funny how all signs were pointing to Germany), I blindly applied to 3 programs in the summer of 2016 that would still accept me for the winter intake. I had missed the deadline for all the rest, and every program I applied for was going to be in a small city (by Indian standards), where I would be forced to learn German and take the career break I so desperately needed.
If I were going to leave my whole life, family and career behind, then I better put myself in the most challenging position possible. Why else would anyone choose to move abroad anyway?
To be really honest, my life right now is far from a career break. I am almost done with the second Masters program, and the only reason I didn’t finish it earlier was because for once in my life, I wanted to enjoy my time off. I can’t complain since I still have more time off than I had when I worked in India, but I still worked 20 hours/week during semesters and 35 hours/week during semester breaks in the last year and half to fund my second year in Germany and ongoing love for travel. (You can read all about my travels here)
Okay girl. Get to the point.
So, how did I manage to save $14000 to travel and move abroad?
1. Set up a direct debit into my ‘Move Abroad Fund’.
Suggested to me by my best friend, and perhaps the most simple and effective piece of advice I ever received on financial prudence. For the last 6 months of my working period, I put 60% of my income in this fund. I was taking home close to $2500 after taxes, so at 60%, I saved $1500 a month for six months. That made up the majority of my savings at $9000.
I’m fully aware that this is way above average for a 20-something Indian to make, but if you read more about my background of how I got here, you’ll get the hint why. (You can read more here)
I’m in no way promoting going to a top business school in India here. Even if you did make it through the mind numbing, terror inducing, nightmare developing entrance process and somehow survived the crazy study schedule that follows, there is no guarantee you will get a great job. In fact, many of my colleagues (I’d say 50% of the students) graduated with student loans over $30000 and a job that paid them less than half as much annually.
Savings Score: $9000
2. Rented out the extra room in my apartment.
This decision is perhaps my most risky one, yet the one that really paid off. I used Airbnb to host the extra room in my flat, and I did this for 4 months. My total rent was approximately $500 a month, for 4 months this would be $2000. In 4 months, I made close to $1200 from Airbnb itself. This made my effective net rent (for the last 4 months) = $800. I saved roughly $300 a month just by renting out the extra space in my flat. Yes, I did have to invest in some furniture for the extra room, but I rented this furniture for a monthly cost of about $10 so well, I didn’t lose all that much on my extra room.
Yes, I also did this as a single girl living in my own apartment at most times. Contrary to what my recent post on women in India will make you think, India is actually quite safe as long as you’re screening people who you host well enough. If you have extra space and you haven’t already listed this space, please feel free to sign up and get my free travel credit worth $80.
Savings Score: $10160
3. Survived on home cooked meals.
It is difficult to put an exact value to how much I saved by primarily shifting to home cooked meals and not splurging on take outs. Even though food delivery business is thriving and heavily discounted in India, I did not wish to spend more than I absolutely needed to. I knew my lunch was always going to be at work, so I made sure breakfast and dinner were at home as often as possible. If an average take away meal in Bangalore cost me about $2, then I saved the money for at least 5*4=20 dinners(total cost= $40) each month by doing this. For 6 months, this was $240. (I only used weekdays for calculations since on weekends I would be cooking either way).
Savings Score : $10400
4. Drastically cut down on travel.
For the last six months before I finally moved to Germany, I did not travel anywhere. I repeat, I went nowhere. I did not even go home until it was time to leave my flat and crash at my parents to save rent right before I flew out to Germany. I’d peg my savings at about $500 for one or two small trips that I would have taken had I not been saving for travel or moving abroad. It’s important to remember the big goal that you’re saving for. My big goal was to save enough for a year abroad anywhere I wanted and this certainly would not be met if I continued to spend money when I most needed to save it.
Savings Score: $10900
5. Sold off 90% of my belongings.
I kept my phone, laptop, camera, favourite clothes and accessories and sold off pretty much everything else. I sold off all the furniture I had. I sold off my fridge and television. I gave away all my kitchen supplies for free to my helpers and apartment security guard. I sold off all the junk I didn’t need and donated the rest.
Despite selling everything and recovering a certain amount, I still made a net loss of about $1000 which came simply from the loss of brokerage for the flat, installations and difference from original prices that I had bought everything at just a few months ago.
I used Ebay primarily to get rid of old/new/used stuff.
Savings Score: $9900
6. Accumulated Tax Savings.
Tax savings is also where a major chunk of my savings came in. A lot of people like to call it a retirement fund or back up emergency fund or whatever. Put simply, I saved about $2200 per year for the two years that I worked to be eligible for some tax savings. In two years, this amounted to $4400 plus interest. I think what’s great about tax savings funds is the ridiculous interest rate you get on them. Mine averaged 8.5% but for the sake of simplicity I didn’t take interest in my calculation as this acts like my back-up fund as well and I plan to wait it out until maturity.
Savings Score: $14300
7. Stopped using Credit Cards except for flight tickets
I don’t know if this just comes from pure access or availability but I cannot emphasize how important it is to stop using your credit cards. If you don’t want to take drastic measures such as cutting the cards in the middle, setting them on fire or flushing them down, I’d say simply lock them out of sight. If you can’t see it, you most likely won’t use it.
The effort it would take to find that credit card and use it is enough to make you think twice about doing the same. As long as you don’t have it lying around in plain sight or in your wallet, you’re much less likely to use it. Use cash or your debit card exclusively except for big purchases where you can accumulate flying miles or cash back such as flight tickets. I wrote more on my travel hacks here:
8. Cut down on going out for drinks
Every little step matters. I averaged going out once a week to a pub and this would set me back at least $30 per visit if not more. I have to admit I only managed to do this for the last 3 months as I wanted to catch up with a lot of my friends that I had not seen that often since graduation. I tried my best to cut down on going out, also because I had no time in my otherwise 80-100 hours a week work schedule. (Start-up life, fellas)
Keeping at $120 for 3 months. I saved about $360 simply by choosing not to go out as often. I still had friends come over for drinks, but we would all contribute and this was way cheaper compared to going out.
Savings Score: $14560
It’s important to note that during this whole period, I continued to pay off my student debt each month. It was paid from the 40% of disposable income I was left with.
Fun fact: I’m still not entirely debt free from my great MBA degree. Hopefully one day soon, I will be.
After subtracting my student loan payments, I’d say I was actually living on less than $600 per month in Bangalore which many will tell you is not the cheapest city in India to begin with. This exercise of saving every penny I could manage with sometimes extreme discomfort made me understand that anyone can save enough to travel and move abroad. It may take you a month. It may take you a year. Heck, it may even take you five or ten years to be able to finally travel and move abroad.
Extra Tips: When Saving to Travel and Move Abroad
- Prioritize. Prioritize. Prioritize. Write down an amount you need to save and then make a monthly plan on how you’re going to reach it. Your source of income is going to be the major contributor so make sure you know what you can realistically save each month after taxes and after debts. I could manage 60%, but I know people who could manage to save up-to 80%. Do what feels right for you and your budget and don’t kill yourself by over-doing it. You’ll fall off the saving wagon fast and hard if you go way above your head.
- Notice your daily activities and daily spends. Simple things like phone bills, online subscriptions, electricity bills or a daily coffee outside can add up real fast. Cut out what you can, and save the tasks you could replace or do away with. Differentiate basic needs from wants. Revisit Economics 101. Cut down the “wants” as much as you can from your daily life.
- Depending on your time line, invest in financial or bank products that will help you to get to your savings goal faster. Read up on financial literacy and invest in the products your understand and feel comfortable locking your funds in. If you happen to be India, use the amazing savings rate that banks offer even on a simple recurring deposit owing to the good economy and stable banking network. Do you want to know what the savings rate in Germany is? 0.01% per annum. This means if I save $10000 in a German savings bank account, I make $100 as interest after one year.
- If you don’t have a job that pays enough, find part-time jobs or side hustles to finance your dreams. Don’t let the excuse of mounting student debt or limited wage potential stop you from dreaming. Find some one to tutor, bartend or wait a table, offer to clean a garden, plant flowers, clean cars, handout brochures, whatever it takes. Work is work. Money is Money.
- If you can live out of your parents house and still go to work, do that. There’s no shame in doing what you can to cut corners. Yes, you may have to give up on your privacy but there are a million other ways that would be harder to withstand than living with your own parents that fed, bathed and provided for you pretty much all your life.
- Sell your crafts, or anything else that you could potentially make money on. At some point in my life, I am sure I tried to sell some custom made jewellery online to test an idea that I wanted to see in practice at Etsy.
- Especially for girls: Cut back on going to the salon and get expensive hair or spa treatments when you could spend the same amount of money on getting a Balinese massage a few months later in some exotic island in Indonesia. I have myself been guilty of spending on absolutely random things like ‘Smoothing Keratin Hair Treatment’ which makes my hair look great for two days and then it’s back to normal. What a surprise. I’d much rather spend that money on an authentic experience elsewhere of my choosing and not one that the extremely persuasive sales person piled on me. Buy beauty/make-up products at Nykaa or MyGlamm instead, and save money by doing at home or self Treatments.
- Stop shopping for things you don’t need. If you do need something urgently and cannot do away without it then make sure to look for a good bargain on Amazon (Global) or Flipkart (for India) and save whatever last penny you can.
These are only some ways and not all the ways in which you can save money for travel. If you dig deep enough into your daily habits, you’ll find your own unique saving hacks.
In my case, it took me about two years before I could save this amount and actually be able to use all of it, even though most of my crazy measures only kicked in the last six months. I am incredibly lucky and blessed to have the means to do that.
The time line of how long it takes to save to travel or move abroad is irrelevant. All that matters is the desire and consistency of following your heart and chasing your dreams. You cannot have everything you want all at the same time. TRADE-OFFS. It’s perhaps the biggest lesson I have learnt in the last few years in my life. If you really want to travel or move abroad, then start now!