How we saved $40,000 to travel the world for a year

Do you dream of traveling the world and never coming home? Read here to see how one couple successfully made that dream a reality.

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Many of us have dreamed of trading in our 9 – 5 desk jobs to travel the world.

But a lucky few have made it a reality.

After returning home from a week in Mexico in 2008, Nick Wharton and Dariece Swift decided they wanted to spend an entire year traveling.

So the couple spent the next eight months saving and planning for a year-long trek through Southeast Asia.

They've never returned to their desk jobs.

They now make more money as professional travelers, relying on income they generate from their travel blog.

Matthew Karsten also quit his job for what was supposed to be a one year trip in 2010.

After spending several weeks in Central America he was hooked, and decided he wanted to travel indefinitely. He learned how to travel cheaply, and wrote about his adventures.

Eventually, his blog gained enough traction to help him earn a living.

He's now been on the move for the past five years, and making six figures a year through his travel blog, Expert Vagabond.

Making the leap didn't happen overnight for these permanent travelers. It took months of planning, budgeting and downsizing to save enough money to quit their jobs and hit the road.

Here's how they did it:

Assess Your Budget

Every adventure should start with a reality check: How much can you really afford to save? And to know that, you need a budget.

"That was the first thing we did," said Wharton on creating a budget.

The pair, who have been together for a decade, calculated how much they made each month and then deducted their expenses.

Tracking where your money is going each month can help identify unnecessary spending.

Pick your destination and set your travel budget.

Some countries are cheaper to travel through than others because of factors like currency exchange rates and the local cost of living, so do your homework to find places that fit your budget and comfort zone.

"As Americans, we tend to think travel is expensive... but living like the locals can be relatively cheap," said Karsten.

Karsten settled on traveling around Central America on his maiden adventure partly because the flight was cheap and it's an inexpensive area to explore.

Wharton and Swift knew they wanted to spend their year of travel in Southeast Asia. After doing some research they calculated they would need to save $40,000 ($30,000 to spend and $10,000 to have in reserves).

Reassess and Change Your Lifestyle

Once you have a savings goal, you need a plan to reach it.

Remember that budget you created? It's time to try and eliminate as much of that spending as possible to beef up your savings.

Small changes can make a big impact on your budget.

For instance, Swift eliminated her regular $200 haircuts to save $800. The pair saved an additional $800 by ending their daily coffeehouse runs.

Not going out and eating more meals at home netted the couple a few thousand dollars.

They also cut their cellphone, cable, and internet to the bare minimum packages.

And the couple was strategic with their spending. They found the best credit card to use that offered a cash signup bonus and a high cash back reward.

But they didn't want to take all the fun out of life either: the pair allowed $50 a month to spend on whatever they wanted -- drinks, magazines, coffee. But that was it.

Sell Your Stuff

Reducing your spending will help save, but selling some belongings is really going to help beef up your travel budget.

Dariece sold her condo, which netted $20,000, which was about half of the pair's savings.

Karsten sold his car and got a bus pass. The sale brought around $6,000 and also saved him money on gas and insurance.

"I got rid of all the crap I had, the TV, DJ equipment and all the stuff I had accumulated. I sold it off on Craigslist."

Do a Test Run

Not everyone is cut out for permanent vacation, which is why a test trip can help determine your tolerance for life on the road.

Before setting off for his inaugural year-long pilgrimage, Karsten did a test run to Mexico for five weeks.

"I needed to go for longer than a vacation to see if it was something I could do and be happy doing for longer."

A trial trip can also help with packing and identifying necessary travel equipment.

Have a Cash Safety Net

Life on the road is unpredictable, which is why travel pros recommend having a safety cushion built into your budget that remains untapped.

Wharton and Swift saved up a $10,000 safety net they could tap when they returned to make sure they could make ends meet if it took time for them to find jobs (little did they know that travel would become their full-time job).

That cushion came in handy: They tapped $3,000 of it when they decided to spend an extra month in Southeast Asia.

"Once people take a trip, even just a month or two, they will see how far money goes overseas," said Swift.

"Do I need that $5 coffee? That rents a scooter for an entire day in Southeast Asia. I don't need these possessions, I want the experience instead."

Topics:
  • Making a Big Purchase
  • Saving and Spending
  • Making a Big Purchase
  • Saving and Spending
  • Making a Big Purchase
  • Saving and Spending
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This article was written by Kathryn Vasel from CNN Money and was licensed as an article reprint from August 11, 2016. Article copyright 2016 by CNN Money.
The statements and opinions expressed in this article are those of the author. Fidelity Investments cannot guarantee the accuracy or completeness of any statements or data.
This reprint is supplied by Fidelity Brokerage Services LLC, Member NYSE, SIPC.
The third-party provider of the reprint permission and Fidelity Investments are independent entities and not legally affiliated.
The images, graphs, tools, and videos are for illustrative purposes only.
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