pay off your debt to finance your rtw

(Originally posted on my other blog, www.littleadventures.wordpress.com)

Planning for the RTW has already helped my life in so many ways.  The chief one being financially.  It almost seems counter intuitive as it costs a decent chunk of change to travel long term.  But a result of this travel planning is that I have become vigilant about my finances.

In order to prepare for a RTW trip, you pretty much need to have no debt.   At least no credit card debt.  It makes it very hard to travel if you owe money.

I cleared out $25K in 1 year.  Yeah.

I make a very decent salary but I wasn’t going to be able to travel if I still had to pay off my debts at the same time.  Many people make tons more than I do and many have no debt to begin with.  These people are in a much better position than I started it.  But with some hard work and commitment, it is totally doable.

Some things that I did:

I started to walk to work rather than pay for parking, netting me $400/month.  Parking  in Downtown LA is expensive.

I took a side job, earning $2000/year.

I cut out a very expensive hobby.  A large part of this hobby was just me acquiring more and more materials.  I had enough materials but always thought I needed more.

I cut down on shopping significantly, almost to nil.  I’m a better teetotaler when it comes to shopping rather than doing it in moderation.  One of my biggest vices is online shopping.  So I add things to carts now and leave them there for a week.  Usually, I never end up buying them.

I transferred credit card balances.  That made me focus on paying it off within the timeframe, otherwise that low APR goes to 14.9%, 19.9%, 24.99% and that starts from the day you applied for it.

I kept my little $550 apt because the rent was affordable.  I never upgraded.

Same with the car, which was paid off a long time ago.  Yeah, it’s not cool but it gets me where I want to go and now I don’t even drive it much because I walk to work.  I’ll be doing something way cooler when I’m on my RTW.

I paid more than $2000/month towards debt.  It was hard.

You may need to make major changes in your lifestyle that I’m you may not be willing to do.  It won’t be easy.  You have to be honest with yourself and really devote MAJOR sacrifices in how you spend your money.

Are paying off debts your number one priority?  It should be.  Traveling can be number two for a short while until you are debt -free or close to it.  If it isn’t your priority, its easy to screw up.  For example, you say you want to pay off debt but you see the newest HDTV or gadget-y smartphone.  If paying off debt isn’t your actual priority, you will likely choose to buy the HDTV or gadget-y smartphone over paying off debt, rationalizing all different kinds of scenarios.  You do this much more easily than you would if you could remember that paying of debts is priority number one.

If traveling and  paying off debts are some things you REALLY want to do, you need to take control of it.  Refinance.  Stop talking about it and do it.  Do NOT hire a cleaning person.  Do it yourself or let it go for a while longer.  Or make it a very rare occurence to hire them.  Cut out or have fewer dinners with friends.  Cut out drinks from the bar.  Or cut out one drink from the bar.  Transfer balances on to a lower card asap and stop using credit.  Make sure that the transfer fee is reasonable and maybe even has a cap (like $75).  Generally these days they charge 3% fee to transfer and there is no cap ( I don’t really think this is a good deal unless you know 100% that you will pay off the cc before the APR kicks in).  It used to be different and there is a chance that you can still find something like that.  Be more strict on parking rules.  Don’t lose $300 a year to parking tickets and moving violations.  Consider how much you are spending on a car that might not be what works best for your lifestyle, even if you can afford it.  Maintenance and gas costs are significant.  Try not to drive for two days in a row.  Then try a week.  Combine your meetings so that a bunch of people you need to meet with could be done at one time and you can stop doing them one on one.  Meet with people for a coffee or something cheaper (or even free) rather than food and/or drinks.  Just stop suggesting all together that you and so-and-so need to get together.  You probably get invited to enough events as it is that you don’t have to suggest it yourself.  Talk to people via phone or email, which already has the cost budgeted in since you pay monthly plans, rather than an in-person meeting if that in-person meeting is going to cost you.

You don’t have to cut out everything but if something is important to you then you need to cut something out elsewhere.  If a standing date is important to you, then cut out meals out when you are on your own.

The point is every bit helps.

Do you have any money-saving suggestions?

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3 responses to “pay off your debt to finance your rtw

  1. I still struggle with this! : / Maybe your trip & blog will give me the inspiration I need to focus. 😉 OR maybe Burning Man will change my life, like everyone says, and I’ll start working harder to be FREEEEEE of debt!!!

    • Do it! It is really an amazing feeling to be rid of all that weight! I hope I can inspire you but I know you know that it’s already within you.

    • I’m proud of you, but I forgot to ask what your side job was. Also curious salary wise what you think I’d need to clear to make it happen. Feel free to tell me that offline of course. You are definitely an inspiration.

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