S3, E6: Budgeting for Travel Regardless of Your Income

When discussing travel, personal finance rarely gets attention beyond the best credit cards for rewards or amazing travel deals. In this week’s episode of Unpacked, we chat with a podcaster who has successfully combined personal finance with travel, offering invaluable insights on spending aligned with your values.

Transcript

Aislyn Greene, host: I’m Aislyn Greene, and you’re listening to Unpacked, the podcast that tackles a challenging topic each week. This week, we're diving into a subject often considered taboo: finances. We’ll be hearing from Danielle Desir Corbett, a podcaster and writer who explores the intersection of personal finance and travel. Through her podcast and website, The Thought Card, she equips travelers with tools to earn more, eliminate debt, and build wealth—all while exploring the globe. Here’s Danielle.

Aislyn: Hello, Danielle, how are you doing?

Danielle Desir Corbett: I’m doing well, thanks so much for having me here to chat!

Aislyn: Absolutely!

Danielle: I believe the connection between personal finance and travel is incredibly important, and I’m excited to dive in.

Aislyn: I completely agree. It’s fascinating because I asked our office Slack channel yesterday what questions people had about personal finance, and it sparked a lengthy discussion. Clearly, there are many thoughts and feelings on this topic.

Danielle: Yes, definitely.

Aislyn: How did you come to combine travel with personal finance?

Danielle: I began traveling in my mid-twenties after finishing graduate school. It was a bit tough back then, as I was dealing with student loan debt and had dreams of homeownership. I quickly recognized the significance of both travel and managing my finances to make it happen. This realization sparked a lifelong passion for creating content that blends travel and personal finance.

Aislyn: That’s incredible! It’s a topic that doesn’t get enough attention, right? Everyone wants to travel, but how do you finance it without derailing your other goals? Did you receive a positive reaction when you launched your [business]?

Danielle: Not at all. I launched my site, Thoughtcard.com, in 2015, and there was some curiosity, like, “Why is a travel creator discussing personal finance?” Conversely, there were questions like, “Why is a personal finance creator discussing travel?” In the content creation world, you're often told to narrow your focus and choose one niche.

However, I believe the intersection of travel and personal finance is beneficial because both are crucial aspects of life. To me, they’re two sides of the same coin; I can’t discuss travel without considering the financial aspects. Many people hesitate to talk about money due to its negative stigma, but we must embrace it. Once you do, travel transforms from merely a hobby into a lifestyle, which was my primary goal from the start.

Aislyn: I believe transparency is crucial. As you mentioned, discussing taboo topics can be uncomfortable in our culture, but when someone steps up and shares, it creates a safe space for others to join the conversation.

Danielle: Absolutely, I completely agree.

Aislyn: To start, I have a straightforward question. How do you incorporate your travel expenses into a monthly budget if you’re someone who budgets? What advice would you give to others tackling this seemingly simple yet challenging task?

Danielle: Yes, exactly. It can seem simple in theory, but actually writing it down and following through can be the tough part.

Like with any financial goal, it starts with a decision to prioritize travel, recognizing it as a significant part of your life you want to pursue. Once you’ve committed to making travel a financial priority, you can begin to include the numbers and examine your spending plan or budget, as it's commonly referred to.

When people think about travel, they often have a few things in mind: either spontaneous spending, like charging it to a credit card, or not incorporating it into their budget. I like to view travel as a necessary expense, similar to a bill. It’s not just discretionary spending; it’s a vital part of my lifestyle that I contribute to each month, just like my mortgage, rent, or gym membership.

By treating travel as a recurring bill, I’m essentially investing in my future adventures instead of paying someone else. There are mental barriers to overcome, like the belief that saving has to be painful, or that small savings of $25 or $50 a month aren’t worthwhile. I encourage you to make it a habit to pay this 'bill' to yourself every month, regardless of the amount. It’s about establishing a consistent practice.

You can easily automate this process. If you have a regular job, consider opening a separate bank account for travel. This way, you can quickly see your available funds without mixing them with other expenses. When a flight sale comes up, you won’t have to search through multiple accounts; you’ll know exactly how much you have at a glance.

Often, we complicate things by trying to allocate funds from a single pool of money. To keep it straightforward, have a dedicated travel fund where you allocate money each month. This simplifies the mental process of budgeting for travel.

With automation, I preferred to set up direct withdrawals from my paycheck into this travel account. This way, I never had to see the money and was removed from the saving process. I set it up once, which helped me avoid the temptation to skip saving for travel when other spending opportunities arose. By creating this financial system for myself, I eliminated the mental stress around saving.

Thanks to that system, I could embrace more travel opportunities without hesitation. I was able to plan ahead since the funds were available, and I felt no guilt about traveling because I had put in the work. It didn’t feel like a struggle to save; instead, I knew I was saving guilt-free money meant for travel. I made sacrifices, allowing me to pursue my passion for travel repeatedly, and I continue to do so even today. While things look a bit different now that I have a family and am an entrepreneur, the core of that system remains unchanged.

Aislyn: I love that! It’s fantastic that you can start small, even if you dream of a six-week adventure. Just begin with what you can realistically set aside, even if it’s just $25 a month. That’s a smart approach.

Danielle: I believe if you’ve traveled and returned home with debt or in a poor financial situation, it’s crucial to work hard to pay off that debt. I’ve been in situations where I traveled despite having financial systems in place, and I came back to disorganized finances.

That experience motivated me to ask, “How can I improve by just one percent next time to avoid feeling overwhelmed or working excessively hard to pay off debt?”

I think it’s beneficial to let emotions guide your personal finance decisions at times. While some advise against being emotional, emotions can truly drive you to seek change. If you feel unhappy with your situation, it can inspire you to take action and make a difference.

Or you might think, “I’m so proud of my progress, or I’m really enjoying this, so let’s keep it up.” Emotions play a crucial role that we often overlook in discussions about personal finance and travel, yet they can be instrumental in helping you adjust and establish your own system.

Aislyn: Absolutely! Emotions definitely influence our spending habits, even if we don’t always acknowledge it. Overspending can often stem from not realistically budgeting for a trip. How do you approach determining your actual expenses, like flights, travel, and those unexpected but exciting opportunities?

Danielle: One advantage of having a travel fund and saving consistently is that you accumulate savings, allowing for more spontaneous travel options. If you have a planned trip coming up, begin by examining your major expense categories, which typically include airfare and transportation. Accommodations also fall under this.

Those two areas are usually our primary focus when booking, making them excellent starting points for noting down potential costs. Several websites can help gauge average spending, and one I find particularly useful is Numbeo, which provides insights like the average cost of a meal in a place like Iceland.

Aislyn: That sounds great!

Danielle: Now you can start calculating figures and envision what your expenses might look like for things like food and activities. That’s practical, but let’s take a moment to reflect on your travel style.

Your travel style reflects how you prefer to travel and what you prioritize during your trips, allowing you to say no to less important expenses. This is crucial because, as we build our budget, we can clearly identify, for instance, that we want to spend more on a hotel with a spa that we love, while opting out of tours or museum visits that hold less value for us.

Creating a list of what matters most to you is essential. Do you prefer business class, or are you okay with economy? These choices lead to different budgets and amounts. It’s a solid starting point.

Once you have a destination in mind or are considering your options, it’s time to get practical and conduct research. The final point I want to emphasize about budgeting is establishing a baseline. A baseline is essentially your target savings goal; it’s the price you aim to book your travel for. If you find a deal below that price, great!

We often hear about travel deals or discounted flights—they do exist. But to recognize a deal, you need to know your baseline. I advocate for creating a travel budget so you can pinpoint what you need to beat and identify areas for potential savings. When you achieve those savings, you can redirect that money towards things that truly matter to you. It’s a crucial step in the process that often gets overlooked. Sometimes we just have a vague idea of wanting to spend around $2,000, for example.

Aislyn: But that’s not very realistic.

Danielle: Exactly, it’s not realistic, and there’s plenty of uncertainty and unexpected expenses that can arise by the end of your trip. Those are some important considerations to keep in mind. Additionally, many travel creators, including myself, share our budget breakdowns on our websites.

On my site, Thoughtcard.com, I feature sections detailing the costs of trips to places like Iceland, China, and Portugal, among others. This allows travelers to see how I approach travel—balancing affordable luxury, splurging in some areas while cutting back in others. It gives a realistic expectation of what they might spend.

This makes everything feel more tangible and clear.

Aislyn: I love that! And once again, it highlights the importance of transparency.

Danielle: Absolutely.

Aislyn: How do you manage to stay grounded when you're traveling? I often find that, while I’m on vacation, money seems less real. It’s like, “I’m here now, I can’t miss out on this chance; who knows when I’ll be back?” Do you have any tips for keeping that in check?

Danielle: Definitely! One strategy I use is to remind myself, “I will be back.” It’s important to believe that this isn't a once-in-a-lifetime chance and that there will be more experiences to enjoy in the future.

This shift in mindset helps me enjoy my trip without going overboard and regretting it later. Another way to think about it is that if I manage my finances wisely now, I can plan another trip soon. So, I find a balance between savoring the moment and recognizing that I can have more adventures down the line.

For instance, I visited Iceland in 2017, and it was breathtaking. I felt a strong urge to do a glacier hike, but I was also mindful of my time and budget. Fast forward a few years, and I’ve returned to Iceland three times, each time adding new experiences to my list.

We often desire things instantly, wanting to afford everything right away. Yet, there’s a unique satisfaction in working towards those goals. I remind myself that I don’t need to feel pressured; I’ll return to these places. It's a mantra I repeat to myself regularly.

Aislyn: I really appreciate that! It sounds like a lot of this is about changing your mindset—how you perceive travel and yourself. Once you adopt a responsible attitude, you can enjoy future trips even more.

Danielle: Exactly! That's so true.

Aislyn: Do you use any other tools? How do you manage your budget? What’s your method?

Danielle: I really enjoy using spreadsheets, but lately, I keep it simple with my iPhone's Notes app. I start by jotting down expenses, whether I’m researching flights or browsing blogs with various price insights. Having a family and a partner complicates things a bit since you need to accommodate different travel styles and preferences.

Effective communication is key, whether you're traveling with your partner, family, or friends. It's crucial to openly discuss your budget and comfort levels to align expectations before the trip.

Communication is vital when traveling with loved ones. You value these relationships, so finances shouldn't create barriers. Being transparent about financial situations helps alleviate tension, allowing everyone to plan together without misunderstandings.

Aislyn: That brings us to another question: How do you handle trips with friends outside your close family, especially with income differences? For instance, a single person traveling with someone who has children or different financial situations may have varying priorities. How should you approach this?

Danielle: Absolutely, communication is essential. Additionally, it's about dividing responsibilities. In my friend group, I'm the one who finds the best flight deals, which takes that pressure off everyone else. They can focus on other trip aspects without worry.

I have a friend who loves handling accommodations, so when she's with us, we count on her to secure bookings. When she presents options, she always checks in with us: 'I found this deal; what do you think? Does it work for you?'

Always communicate clearly about the costs of flights, accommodations, and car rentals upfront. Let everyone know the total amounts and deadlines for payments to avoid misunderstandings.

It's crucial to set clear expectations to prevent disappointment and conflict. If you're booking with points or miles, consider offering to cover a friend's flight with a few extra miles if it's within your means, especially if they might struggle with costs.

That's why I appreciate using points and miles; it allows for more generosity since it's not actual cash. I also recommend booking smaller activities early, like museum visits or tours, to enjoy your trip without financial stress. Early bookings often come with discounts and perks, so I like to present options to the group and see what everyone is interested in.

Another idea I enjoy is organizing no-spend days, similar to a no-spend challenge. While exploring a new place, we aim to spend nothing on entertainment or activities. We look for free museums, strolls, or window shopping—there are plenty of enjoyable free options. I've done this in various locations, including Las Vegas recently.

Aislyn: Wow.

Danielle: I felt like Vegas was just about spending money everywhere, but I wasn't sure what I wanted to spend on. So, I decided to explore and see what options there were. I believe we can adopt practices that limit expenses, keep things enjoyable, and foster open communication. It's important to ensure no one feels overwhelmed or embarrassed about financial matters during the trip.

Aislyn: Absolutely! I love the concept of a no-spend challenge. It seems like a great way to spark creativity and experience the destination in a unique way.

Danielle: It really is enjoyable.

Aislyn: Do you use any apps, like Splitwise, to help manage expenses when traveling with friends?

Danielle: Not really. I prefer when we can pay separately. I often suggest we split the costs evenly to avoid complicated calculations. That way, everyone can use their own cards, and I can earn points and miles, which is ideal for me.

You have options like Splitwise, Venmo, and Zelle to help keep track of expenses, making it much simpler to manage shared costs. Additionally, there are travel budgeting apps available for those who prefer to monitor their finances directly from their phones.

Using tools can be incredibly helpful. Whatever makes you feel comfortable and in control of your finances is beneficial. If you prefer a traditional pen-and-paper method or want to use a digital format on your phone, that works too.

Aislyn: Since you're a pro at finding deals on flights, how do you determine when it’s worth the time to search for them?

Danielle: I really value when deals land in my inbox. I don’t have a lot of time to scour for deals myself; I prefer subscribing to newsletters and reviewing them daily. This way, I can quickly assess whether the deals align with my travel plans and whether they are good or exceptional offers.

Newsletters are incredibly useful for this. While you can also follow deal sources on social media, it often becomes cluttered with distractions like cat memes. Having a dedicated folder for flight deals in your inbox or using a separate email account just for those deals can help you stay organized and easily access them on a regular basis.

Aislyn: Which newsletters do you find most helpful for that?

Danielle: I subscribe to so many!

Aislyn: Absolutely.

Danielle: I really do have a ton of them.

Aislyn: Way too many to mention!

Danielle: Absolutely. Thrifty Traveler Premium is one of my top picks. These subscription services send out numerous flight deal alerts daily or monthly, allowing you to sift through them. Another great option is Going, previously known as Scott’s Cheap Flights. They specialize in identifying these opportunities and notify you the moment they arise, letting you decide which deals to pursue.

In addition to flight deals, I’m also interested in resorts and hotels. Travelzoo offers a newsletter every Wednesday featuring various promotions, including hotel discounts and package deals. I recently found a great offer to the Azores, Portugal, through their newsletter, simply by keeping an eye on what they send.

I really appreciate these all-in-one newsletters because they lead you to various deals. Be sure to subscribe to those websites' newsletters as well as niche options. As you can imagine, my inbox is quite busy with all these updates.

Aislyn: I think having a separate email address for that could be a smart idea, especially if you can't handle the influx.

Danielle: Exactly! I dig into the details and sign up for these smaller newsletters, which keep me informed about exciting opportunities. Another great one is Gate 1 Travel, which offers package tours. Their Monday newsletter is fantastic for finding tours on sale, making me consider destinations like Ireland.

The downside is that I’m very flexible; for instance, if I’m aiming for a trip to Australia, I recognize that finding a deal might be unlikely. However, if you're open to various possibilities and don't have a specific destination in mind, these strategies can be incredibly effective because the world is full of opportunities. But if you have a particular place in mind, it will require more in-depth research.

Aislyn: That makes sense. You can embrace serendipity, thinking, ‘Oh, that sounds appealing, and it’s a good deal!’ Perfect.

Danielle: Exactly! That's exactly right.

Aislyn: Before purchasing a deal like that, would you check the average flight prices first if you hadn’t initially planned a trip to Ireland and didn’t have a baseline flight?

Danielle: Yes, I would definitely check flight prices as part of my comparison. For example, a few years back, I booked a hotel and flight package to Ireland for about $599. When I checked the typical prices from New York City to Ireland, they were around $750. This showed me I had snagged a fantastic deal, covering both my accommodation and flights.

That's just one example. A few years back, I scored a deal to China for just $299. It was a 10-day journey that I’d describe as luxurious backpacking, as we traveled across the country. $299! I didn’t even need to do any research or comparisons because I already knew that getting to Asia is—

Aislyn: That’s unbelievable!

Danielle: Exactly. There are some fascinating opportunities out there, and sometimes you might wonder, “Is this too good to be true?” I had to double-check and ask, “Are you serious?” But at that time, the government was subsidizing the costs.

Aislyn: Ah, I see. That clarifies things.

Danielle: These were spontaneous opportunities, but I had a travel fund ready, so I could easily access the money. It all came together serendipitously, and it worked out perfectly for us.

Aislyn: That sounds wonderful! What a delightful journey.

Danielle: It truly was fantastic.

Aislyn: You mentioned your no-spend day earlier, but what are your so-called financial rules when you travel?

Danielle: I tend to struggle with the little indulgences sometimes. For instance, I adore coffee, and there’s nothing better than visiting a new place and checking out all the local coffee shops. However, once I return home, I always review my travel budget. I compare my planned budget to what I actually spent and assess how I feel about my expenditures in different categories.

I often find that those small expenses, like coffee, can add up unexpectedly. They seem trivial in the moment, so I don’t give them much thought. But by the end of the trip, I realize I've spent more than I intended. To create your own financial guidelines, it's essential to analyze your previous travel expenses and pinpoint spending habits that don’t sit well with you.

After I noticed that my coffee habit was getting out of hand, I decided to limit myself to just one coffee a day on my next trip. Additionally, I make it a point to quickly assess with my travel companions whether an expense is truly worth it. For instance, last summer in Paris, my mom, baby, and I faced a choice: take a bus tour around the city with planned stops or navigate the metro ourselves.

We contemplated this for a moment and concluded that the bus tour didn’t align with our travel goals since it took us to places we weren’t interested in. So, before making any purchases, I pause to ask myself, “Does this fit with what I want to experience?”

Sometimes, spending a little more is justified for the sake of convenience or saving time. However, opting for the bus tour would have been a waste, as it didn’t enhance our experience. This is a lesson I’m continually learning on each trip: just because I’m traveling doesn’t mean I need to splurge on every little thing.

I really need to consider whether I actually need something and if it’s worth it before proceeding. I also have specific activities I enjoy in every city I visit. For example, I love going on free walking tours—they’re a fantastic way to learn the local history and context. I find them very rewarding.

I’m also a huge fan of viewpoints. If there’s a chance to hike up to a mountain or a scenic overlook in the city, I seize it. It’s something I aim to do in every city I explore. You can have financial guidelines, but also things you want to experience consistently, like visiting a brewery in each place. It’s all about balancing enjoyment with mindful spending.

Aislyn: Absolutely! Would you mind sharing what percentage of your annual or monthly budget goes toward travel?

Danielle: I’d say around 10 percent of my income is dedicated to travel each year. However, rather than focusing solely on percentages, I think about how many trips I can fit into that budget. This mindset has opened up many opportunities for me, as I realized I could do more trips with the same budget if I plan strategically. It’s essential to consider, “I have a limited amount of money. Last year I took one trip, but can I fit in two? What would that look like? Or even three?” It’s all about the choices you make.

Aislyn: What advice do you have for those who oscillate between wanting to save money and embracing the “you only live once” mentality, often struggling with this throughout the year?

Danielle: Yes, for me, becoming the “and” person changed everything. I stopped battling with myself about who I was or what to focus on. Being an “and” person means I can travel and pay off debt, travel and save for a house, travel and save for retirement, and travel and work while being location-independent. By embracing the “and,” I opened up new possibilities for myself.

That said, there are times when you need to buckle down, especially if you're trying to manage credit card debt, and you might need to direct every dollar toward that goal. That can be a temporary phase in your life. But generally speaking, you can pursue multiple goals at the same time.

The advantage is that you're making progress. It's like being in a race with multiple small goals; you're all advancing. You might not be moving as quickly as you'd like because you're still allocating funds for travel and paying off debt, but when you view it from a broader perspective, you're heading in the right direction, no matter the pace.

I appreciate this approach because society often pressures you to just save or solely focus on debt repayment. However, life is passing by, and there are so many experiences I still want to have. Balancing multiple goals is essential, understanding that you won’t be fully committed to every single one since your finances are usually limited, but you are still making strides, right?

You're advancing toward all your objectives. If you find yourself intensely focused on one goal, think about how rewarding it will feel when you achieve it, granting you more freedom in life, which can also lead to additional travel opportunities. There's no definitive right or wrong way to manage your finances; it's about what feels right for you at this moment. Remember, you can always change your perspective or strategy.

Aislyn: Absolutely, that's true.

Danielle: You can always readjust your plans, and I actually encourage that. Personally, I realized that while I was deeply focused on tackling my student loan debt, the one thing that brought me joy was having a trip each year.

Aislyn: Absolutely!

Danielle: It was definitely worth the trade-off. Not hitting my debt payoff target as quickly was worthwhile because I had that trip to anticipate and enjoy. So, I would encourage you to experiment. Try out some of the ideas we discussed today and see what resonates with you. Tailor your approach to fit your unique circumstances and lifestyle.

Aislyn: I love that! Thank you so much for your time and insights, Danielle. I truly appreciate it.

Danielle: I’m grateful for the opportunity to discuss travel finances. It’s crucial and empowering, serving as both a hobby and a lifestyle choice. I’m excited about the encouragement we’re providing to everyone, so thank you for that.

Aislyn: Thank you, Danielle!

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You’ve been listening to Unpacked, a production of Dinogo Media. The podcast is brought to you by Aislyn Greene and Nikki Galteland, with music by Chris Colin. Remember: The world can be complex, and we’re here to help you make sense of it all.