Here is a shameful secret: I’ve been planning to do some version of a trip around the world for 10 years, and seriously looking at where I want to go for 5, but I didn’t start making any real saving decisions til 3 years before I planned to leave. And I didn’t invest serious money til about a year and a half out. Spoiler alert: this was not smart planning. So although it pains me to admit it, here are the top 3 stupid money mistakes I made while planning for this RTW trip.
1. I didn’t automatically deduct from my paycheck until last year.
My parents had told me since college that the best way to save consistently is to have money automatically deducted from your paycheck and put into savings. This made sense to me, but my first post-college job was a classic publishing starter position in that I made less than I spent (and I only spent on rent, utilities, food, and the occasional movie out). So I was going into debt paying back loans, and by the time I got a decent-paying job in the city, I had enough debt that my new paycheck went mostly toward paying that off for a couple years.
I then looked at automatically deducting from my paycheck and putting it in my savings, but my company doesn’t deduct percentages (like 90% to checking, 10% to savings), only exact amounts. Since I infrequently work overtime that changes the amount of my income, that would cause headaches. I took out money from checking here and there and called it good, but of course that meant I wasn’t saving as much as I should have been, and not as consistently. It wasn’t until last year that I realized, hey, I could let the whole paycheck go into checking, then set it up so the bank automatically moved money into savings once a month. Voila.
2. I didn’t get an airline rewards card until this year.
I didn’t know I could have one! I got a Capital One credit card when I was 18, which my parents had to co-sign. They were taken off the card a few years later, but it’s still the only credit card I’ve ever had. Capital One sends me promotional stuff all the time, but never once have they sent me information on a card that gives airline rewards. None of the other major credit card companies have even spammed me with their offers, which is just an inconsiderate lack of junk mailing.
I always thought of credit cards as ways to accumulate debt, and maybe enough credit to do me good if I applied for a loan on a house or a car. I never thought of them as things that could work for me in other ways. If I’d had a rewards card, I could have enough miles for a couple of flights on my trip already! Oh well. I’m late to the game, but I’m in it. I got a United Airlines Visa and am putting all I can on it until the annual fee kicks in.
3. I didn’t set aside any money for my return to the States.
I’ve always joked that I’d go on this trip and come back broke, but I haven’t really put much thought into just how very broke I’ll be. Lots of world travelers are location independent earners, but I don’t have any freelance writing or editing gigs set up and I’ve found it a hard market to break into, so earning money on the road seems unlikely. This means it’ll be a blank slate when I get back, and depending on the kindness of loved ones until I can get set up with a job, home, etc. My parents weren’t keen to have me rent-free for long when I was 22, so they’ll probably be even less so when I’m 32!
I’ve set up an ING savings account and put a couple hundred in there. I’ll let the compound interest help me out, and make deposits as I’m able, but for now, this is the mistake that’s potentially going to cause the most trouble in the long run. Still, part of long-term travel is accepting that circumstances change all the time and there will be opportunities I’m not yet aware of. I’ll hold on to that for now.
Learn from my mistakes
There you have it! For all my big talk, I sure have been shortsighted and unresourceful in the numbers part of planning. It’s embarrassing to admit, but maybe by laying them out here for you, other travelers can learn from my mistakes. I wish someone had given me this advice years ago, so I’m passing it on in true pay it forward style.