You’re scrolling through travel posts and websites, all of these beautiful & exotic places….and you’re thinking where will I find the money?
I’ve been jetting around solo for years, so how have I been able to find the money to travel? It’s called a Lifestyle Spending Plan (“LSP”). But, it’s oh, so much more than JUST a plan – notice I didn’t say budget – nobody likes a budget. The LSP is a blueprint for all of your income, expenses and financial goals. it helps establish accounts that you build monthly to pay for your needs and wants (including a travel account).
Your income should cover all of your expenses PLUS leave a surplus for your emergency fund, savings, retirement and a sinking fund. (A sinking fund is where you accumulate money for future expected expenses).
If there’s a shortfall, you’ll need to find a way to increase your income – maybe it’s time to ask for that raise or find a side hustle.
This alone can have a major impact on your finances. Not going to brag (well, maybe a bit) but reducing my expenses on a day-to-day basis using the LSP method has been my secret to finding the money to travel.
And if you can’t increase your income as noted above, you MUST decrease expenses.
Where did the money go? Look back to the last 2 months and categorize all of your expenses. You can do this on a spreadsheet or by using a pen & paper.
Do the math. do you have money left over? Terrific, use the surplus towards an emergency fund first. That balance should be the amount of your monthly income x 3, at least.
There’s no money left over? Yikes, go back and analyze each category to make changes.
Going forward. Start to track every dollar spent and record it in your LSP. You’ll quickly see exactly where your money is going.
You’re at your favorite store and about to buy yet another “thing”. Ask yourself, do you NEED this or do you WANT this.
Knowing the difference and making a conscious decision on your purchases can save you thousands over your lifetime. Don’t get me wrong, I’m all for having nice things but I have a very clear list of what I Need. And yes, sometimes I need a new pair of shoes! As for Wants, I work with my LSP and create a category for it. The LSP will also help avoid any impulse buying if that happens to be what’s holding you back from a good financial situation.
Credit cards are great to have, convenient and part of being an adult. But they are often the biggest culprit behind a person drowning in debt or having little to no savings. Credit card companies love it when you charge a purchase. In January of 2018, the average credit card debt per borrower in the U.S. was $5,472 (source: CreditCards.com). I’m not picking on our U.S. friends, the statistics are similar in the UK, Canada and Australia.
When you use cash instead of credit you will have paid for the item outright (without interest) and you have thought twice about the purchase. You can make some real progress with your financial goals using the cash approach. You may be using your credit card in hopes of accumulating loyalty points. Rest assured, those points benefit the credit card company, not you.
Notice the word, elimination not reduction. You’ll begin with reducing debt but the key is to ELIMINATE it completely.
List all of your debts. This is where you have to be very honest with yourself – but be kind too – it’s ok, you’ve started and that’s the hardest part.
As you list each amount you owe, include the interest rate for each one. There are two schools of thought on whether to pay the debt with the highest interest rate first OR pay the debt with the smallest balance. I like the latter as it creates momentum. If you owe $700 dollars on your credit card and $4,000 on a loan, it will feel good when the $700 is paid off.
They should replace Algebra with “Financial Planning for your Life” as far as I’m concerned. I’m on a mission to change this because it took me a few years and many financial mistakes to create a system that works well for me. Now that you have a better idea on how to do this, you can make better choices too because you’re either managing your money or it’s managing you.
Using her expertise & experience from her career in business, Leigh has been “unofficially” coaching women for almost 10 years in both money & overall life goals. Now, she’s taking a more formal approach to it and is thrilled to be meeting so many great ladies around the globe that have been reaching out.
Leigh loves travelling (obvs!) hiking, yoga, tennis, reading and learning new languages; she’s up to 3 now and hoping to be fluent in the 4th one soon – choose a language & say hello.
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