Welcome to FAQs, a new weekly series that is exactly what it sounds like, answers to the most common questions I’ve gotten here, on social media and IRL since I started paying down my more than $20,000 of debt one year ago. Have a question you want answered about debt, personal finance, budgeting, mental health, life in New York on a budget, Che Diaz or literally anything else? Send them on over to realgirlproject@gmail.com and come back every Wednesday to see the answers.
Personal finance consultant and radio host Dave Ramsey has said, famously, that when you’re in debt, the only time you should see the inside of a restaurant is if you’re working there.
There are so many things I find wrong with the shame-based approach Ramsey (and others like him) take on handling consumer debt. But today, let’s just state the obvious regarding the above assertion, written live from the end of a month of travel abroad: I disagree.
I’ll preface this post by saying that this position is, of course — only my own, based on my experience and financial situation. It is a privilege to a) have discretionary income and b) use it on travel. I am a single woman, without children, whose extra funds (when I have them) are only spent on myself. Which usually means they’re being spent on travel.
I don’t believe in budgeting as restriction — I believe in it as prioritization. Over the past year spent paying down around $20,000 of debt I realized that, while nice, the money spent going out to a mediocre dinner to catch up with a friend is better served accumulating in a travel-specific bank account. It has meant a lot more walks, picnics, hangs at home or missing out on some things. But it has also afforded me the ability to travel. My priority.
It doesn’t always work out that way. My emotions sometimes get the best of me and I forget about the whole prioritization thing entirely. But mostly, sticking to this mindset has made it so, for the first time ever, I know how much money I have to spend on a trip when I plan one, instead of putting it all on a credit card and hoping for the best.
With that, here’s a peek into how I manage to enjoy traveling in tandem with debt consolidation.
how I saved for travel while paying off debt
I know a lot of people won’t want to hear this but I gave up a lot of the things that were part of my regular life last year. There were a lot of difficult decisions and a lot of getting comfortable with the word “no” (scary!) but from where I’m sitting today, taking this initiative has changed my life in ways that go far beyond financial. The money I used to spend on big group dinners, excessive Ubers, one single bank-draining cocktail in New York City started going, instead into a special account I opened specifically to save for travel.
I opened a Chase savings account, with an automatic $25 transfer monthly, and named it the travel fund. This was in addition to two Ally High Yield Savings Accounts, where I keep my tax savings and emergency fund money. Of course, as you may already know from the amount of times I’ve talked about it, I also use Tiller to manage my budget.
Last year I landed myself a well-paying contract gig, during which time I focused on paying my debt down aggressively, while also contributing to retirement, building an emergency fund and building up a travel fund, too. Whatever money I had leftover after my bills, debt repayment, groceries, living expenses, etc. — I put in that savings account. I dug into it in May when I went to Romania with my mom, and planned to use the rest during this month long trip. When I get home, I’ll start saving in there all over again.
how I budgeted for this trip
Before I left on this trip, I looked at the amount that had accumulated over the year, and divided that by 30 — the length of the trip. With what I’d saved, I was looking at about $50 per day. Of course, my goal was to not spend that much each day, but I knew at least what I had to work with — so if one day I went over, I knew I could cut costs a bit over the next few days to try and balance things out.
how I stuck to the budget
I… didn’t always! If you’re a paid subscriber, you’ve already seen the lengths to which I was and was not always able to stick to my pre-planned budget. For instance, there was the serious moment of weakness in a French pharmacy.
But — simply knowing I had a budget at all was helpful. I looked at menus at restaurants I’d wanted to try beforehand, and decided which, if any, were my absolute non-negotiables. For all other meals, I either cooked or grabbed something small, on the go. I mostly abstained from shopping and ate a lot (so many) $1.50 croissants.
How I kept costs low
By traveling to three places I’ve already been, I didn’t necessarily feel as much pressure to go, go, go and spend, spend, spend. I left my days open to wander, to relax, to sometimes do nothing at all. As a person who experiences time anxiety often while traveling (and just in general) — this approach was not only cost effective, but also helpful to my mental wellbeing. I stayed in six-person dorm hostels in Portugal, at a friend’s place in Paris, and with friends in Israel.
I also picked locations where I knew there’d be many inexpensive / free things to do in summer. I spent a week on the coast of Portugal known for its beautiful beaches, breathtaking hiking views and inexpensive wine. In Paris, I swam laps at the public pool for $4 entrance fee, stocked up on $1 baguette and cheese and $5 bottles of wine. In Israel, I stayed with family and friends and raided their refrigerators, and existed mostly on falafel and hummus, the best (and most affordable) option.
what I’d do differently next time
I’ll be honest: traveling this way, for this long, was pretty stressful. I am eternally grateful for this experience and for the time, funds and freedom — but sometimes I think having the freedom to do whatever I want makes figuring out what I actually want a bit unclear.
I know I can travel, so I feel like I should. But living out of a suitcase for a month and feeling unsettled, without access to the systems I’ve put into place that are best for my mental health, was maybe not the best idea.
Next time, I might opt to go for a shorter time, or to save for longer to have an experience that is maybe a little less roughing it.
If you’re a paid subscriber with a question on any of the above, feel free to leave them in the comments and I will answer you directly! Otherwise, see you (stateside) next week!
XOXO,
Jamie AF