Why Travel Bugs Need Financial Autonomy - Episode 44

What a wonderful era that we live in where holidays and travel are a regular feature in our lives. I don’t imagine that through the bulk of human history there was enough surplus of time, food, and resources to allow you to just take time off to explore the world or relax, unless you were super rich. Even as recently as my grandparent’s era the only international travel done was to fight in World War 2.

So we’re in an incredibly privileged time, where a return flight to one of our Asian neighbours costs less than your annual car rego. For the adventurous or curious, opportunities certainly abound.

But there’s two key ingredients you need to truly satisfy that travel bug within you. One is money and the other is time. And that’s where financial autonomy becomes relevant because the choices it enables, can be the solution to both.

My hopefully fairly uncontroversial observation is that people who listen to podcasts and read blog posts are those who like to learn - they're hungry for knowledge. And for many people with that trait, a curiosity of the wider world fits hand in glove.

Many people that I speak to with ambitions to achieve financial autonomy have a goal of regular overseas travel. So what’s needed to make that happen? Well the first is the flexibility to be able to take the time to travel. If you’re an employee you’ll have your normal 4 weeks leave entitlement, but is that enough, especially if you’re in a role where at least 1 week of that is gobbled up with compulsory Christmas shutdowns?

The second requirement is of course money. Sure, there are parts of the world where you can travel quite cheaply. But you still need to get there, and cheap living doesn’t mean costless living – you still need money for food and shelter no matter where you are.

So what could you do to realise your travel bug dreams, and how could a financial autonomy mindset help you succeed? Well, here’s a few ideas for you.

Rent out your place while traveling

Of course anyone with the slightest travel bug inclination will have considered using AirBnB to solve their accommodation needs when on the road. But have you thought of flipping the equation and using AirBnB (or one of their many competitors), to rent out your house while traveling? The income generated through renting your place out could cover many a night on foreign shores.

Could a Side Hustle help?

Regular readers and listeners will know that very rarely can I get through a post without mentioning Side Hustles. So how could they help you achieve your travel goals?

Well, for one you could direct all earnings from your side hustle to your holiday account, so your normal day gig can continue to be devoted to things like paying off the mortgage or saving a deposit for a home.

Your side hustle could perhaps also provide you with the flexibility needed to travel. Imagine if you built up a drop-shipping internet business that generated $2,000 per month in income for you for instance. You could run that business whilst travelling, and while $2,000 a month would barely get a roof over your head in the capital cities of Australia, in much of the world it would be enough to live a frugal but totally satisfying and fun life.

If you haven’t already done so, download my 50 Side Hustle Opportunities for Australians pdf to find a Side Hustle with your name on it.

Credit card points

Now I know credit cards are playing with fire, but we’re grown-ups here so I’m going to make the assumption that readers and listeners of Financial Autonomy are smart enough to manage a credit card without winding up bankrupt.

Maximising, or perhaps gaming credit card points schemes seems to be big in the US, but I'm sure it's possible in Australia too. Depending on whether your goal is domestic or international travel, find a credit card that provides Qantas points for instance, and then put all of your spending through that card. Just ensure you clear the debt each month, as the savings generated through using the points would be nowhere near enough to cover the interest the credit card company will charge if you run up a debt. Always remember, the bank giving you this card is not your friend.

Delay your retirement

Now I’m using the word retirement here in a broad context. Your pursuit of financial autonomy might mean you aim to retire at age 45, so please don’t think I’m talking about working into your 80’s or something unless that’s something that you really want to do.

But let’s say it is an age 45 goal. Maybe to satisfy the travel bug gnawing away at you, you push that back a few years and do some travel in your 30’s and 40’s.

I read an interesting article recently from someone who had retired early, and he noted that his need for holidays reduced once he retired. When he was working he was stressed and under pressure. So some travel was an important and well looked forward to release valve. But once he’d escaped that corporate pressure, the need evaporated.

So maybe it’s worth considering whether you can chew gum and walk at the same time by building your savings for retirement, whilst at the same time diverting some of your savings capacity to allow for travel during your working years.

Take fewer but longer trips

From Australia, just getting to your destination is expensive. We're lucky to get 4 weeks off a year, many in the world get less. But most people can't take that in a single go and so holidays for those under 60 are often 1-2 weeks. But for someone who's achieved financial autonomy - 1-2 months or even more might be possible. The important consequence of longer trips is that it brings the cost per day down, because your flight costs are spread over more days. It’s likely to also mean that you can visit neighbouring countries in the same trip. So for instance rather than flying to France one year for a holiday, and then a few years later flying to Italy, perhaps you could cover both destinations in a single trip and save on one lot of fights.

When you’re not so rushed, I’ve found you’re also more likely to book accommodation with facilities like kitchens and laundries. By self-catering, at least for breakfast, and doing your own laundry (an often overlooked necessity of travel), once again you’re bringing your costs down.

Longer trips also means you’re not trying to fit a million things into just a few days - who hasn't come back from a holiday and felt they needed another break to recover?

Well they’re my best ideas for how you could scratch your travel bug itch whilst pursuing financial autonomy. But I’m sure you’ve got other clever ideas, so jump on the Financial Autonomy Facebook page and fire them at me.