Imagine this.

You have just returned from a fantastic trip, one filled with laughter, new experiences, and hundreds of beautiful photographic opportunities.

You arrive home, ready to return to “reality” with a brand new lease on life

Opening up your emails, you see your monthly credit card statement. You know there will be a bit of a balance as you didn’t save for this trip beforehand but you expect it will be easily paid off.

And then BOOM: your jaw drops as you see the full amount that you now owe the bank. How in the world did you spend so much??

How did this happen, you wonder? You know you can’t pay this off in one go. Now you will have to pay interest on top of the trip’s original cost!

All of your trip afterglow has suddenly faded away. What now?

My Experience

To date, I’ve spent a lot of money towards travel. And honestly, I’ve not always been good about only travelling when I can afford to travel. Yes, I admit it – I’ve travelled on credit before. And not in a controlled way either. In other words, for a while, I have been in debt because of my bad travel habits.

While I’m not particularly happy that I no longer hop on a plane whenever I want (#firstworldproblems), I’ve also realized a healthy peace of mind is partially dependent on being debt-free. This means I have to actually structure my approach to travel and to understand that unless I have the cash, I cannot actually afford to go anywhere.

This new way of thinking has meant two things:

  1. Embrace the idea that “travel” is not only for exotic far-flung places: Guaranteed, there are some cute towns and great landscapes near where you live that you’ve never explored. Small excursions like these can help you to travel for cheap!
  1. While you’re satisfying the travel bug with small excursions, implement a saving plan for those exotic far-flung places: Yes, I know – the word “saving” is horrific especially if you’re like most people and see the word as equivalent to “deprivation”. BUT. If you define the word as “a means to guilt-free peace of mind”, you’ll be surprised how easy it is to embrace.

So the question now, is, how do you successfully save for travel? I interviewed Pamela George, a financial counsellor who firmly believes that travel does not have to be synonymous with debt. Read on to learn four steps towards debt-free travel!

Four Steps to Achieve Debt-Free Travel

Step One: Create a budget

Figure out how much the trip will cost you. To do this, you will need to create a budget. Here is a simple example for a one-week trip:



Airline Ticket $800.00
Accommodation (i.e. hotel, Air BnB) $700.00
Local Transportation (i.e. taxi, bus, subway) $105.00
Food (restaurants, groceries) $420.00
Communication (i.e. cell phone roaming add-on) $50.00
Entertainment (i.e. tours, local shows, museums) $100.00
Gifts/Souvenirs $95.00
Sub-Total $2270.00
10% Contingency $227.00
Grand Total $2497.00


Tip 1: Always include a contingency line – guaranteed there will be that one extra day tour or souvenir you want to buy!

Tip 2: To properly estimate your costs, you will have to do some research about the place to which you want to go. Spontaneity can be a good thing but when it comes to your money, that is exactly how you run into problems. A little research can show you what to expect in terms of the various line expenses above.

Tip 3: If you don’t have to use your contingency, don’t! That way, you’ve already started to save for the next trip!

Step Two: Open a separate savings account and call it TRAVEL

Pamela strongly recommends that you open a savings account specifically for travel. If you keep the money as cash in a jar, you’ll be tempted to spend it. If you keep the money in your regular chequing account, you’ll be tempted to spend it. The additional bonus of having a savings account only for travel, is that at any point, you can view your account to see how much money you have saved so far. It can be a great source of motivation to keep going!

Tip 4: Make sure there are no fees attached to your new savings account!

Tip 5: Set up your savings account so that a set amount of money is automatically moved into it every so often. For example, I have mine set up so that money is automatically transferred into it every two weeks.

Step Three: Save in advance for the trip

In the above example, the cost this one-week trip is about $2500 – sounds like a lot of money, right? But, say you’re planning one year in advance for this trip, all you need to do is divide $2500 by 12 months. Which means that if you able to save $209 a month for twelve months, by the time you are ready to leave for your trip, you would have all the money for your trip and will not go into debt.

If you cannot afford $209 a month, then you know you will have to adjust your expectations. Either you change your trip to something less extravagant or plan your trip 24 months in advance, reducing your monthly saving commitment to $105.

Tip 6: It’s easier than you think to save. Stop buying your meals out or stop buying alcoholic drinks, skip the coffee shop, do free things with your friends… Every little bit helps!

Step Four: Buy your tickets and other travel related items ONLY when you have enough funds in your travel account to pay it in full.

Most of us swear by our credit card that collects points, be it travel points, food points, etc. So I’m definitely not going to say to never use it. This is actually a great time to pull it out. Buy all your travel related items with the points card and then immediately transfer the funds from your travel savings account to pay it off. This way not only do you avoid increasing your debt and incurring interest, you also get “paid” for your purchase!

Tip 7: Choose a points card that has no fees – that is extra money that can go to your travel fund.

So there you have it! Four easy steps to get you on your way to a guilt-free and debt-free trip!

Final note: One is never too young to start learning about financial literacy! Check out Pamela George’s book, Three Little Piggybanks. It is a fantastic tool that teaches financial literacy to children! You can also learn more about the book and Pamela herself, at her Facebook page.