Travelling Australia costs a fair chunk of money. The exact amount you spend will vary considerably, but in this post I want to share a number of the things that we did to save money, so we could afford to take off and travel. Yep, we’re on a Big Lap of Australia, and you can read our first 100 day costs post here.
Now, I want to put a disclaimer in here and say we are not financial advisors, and this is not financial advice. It’s purely what we’ve learnt over the years that has helped us dramatically, and if it can help you then that’s amazing too. Please seek professional advice before proceeding, and take our information as that only, not advice!
Decide on an end goal, and make a plan for it to happen
Money in your bank account doesn’t just happen. It gets there from smart planning, hard work, and sticking to a plan that you’ve put in motion. Work out what you want to travel Australia, how much you need and how you are going to get there, and stick to it with every fibre in your being.
Sure, things will go wrong, but if you do nothing, you are going to be in the same position in 5 years time as you are now, and who wants that?
This next part is super important. Having a goal is awesome, but if you don’t put a detailed plan in place to make that goal achievable, you’re almost guaranteed to fail. If you want to travel Australia, what do you need to do it, and how are you going to get there?
The more detail in your plan, the more likely you are to succeed. If you just slave away day after day with no way of tracking your progress, or knowing where you want to get to your chances of success are hugely reduced.
Get an understanding of money, and compound interest
One of the best things we ever did was learn about the cost of interest, offset accounts, various interest rate differences, and how much putting away money each week can actually do if you do it well. If you get on a good track, and stick to it the difference is obscene compared to someone who continues to live pay check to pay check.
A typical example of this is a cup of coffee a day, at $5 (for week days). That’s $25 a week, and $1200 a year. Easy, right? What if I told you there was a lot more to it than that? The $1200 has compounded interest attached to it, at what ever rate your debt is. If you have a mortgage, that’s going to be around 5%, but if you have car loans at up to 15%, its going to hurt a lot more.
At 5%, your total potential for lost income is somewhere around the $60 extra a year, and if its a much larger debt you can be paying a heap more.
If you have several debts, and some of them are high interest having an understanding of how this impacts your available funds is paramount, as getting rid of those loans can have a massive impact on your way of life.
Now, this isn’t a finance blog, but there’s lot of good places to start. The Barefoot Investor, The FIRE movement (Financial Independence Retire Early) and a tonne of books can head you in the right path.
Sarah and I both had a keen interest in money from well before we got together, and we’ve been working very hard together to make it work as well as possible for us.
Go through every bill and cut it down if possible
So many people have their bills set to pay automatically, and never think too much about them when they come in. We easily fall into this trap too, but I’ll often look at them and see what can be done better.
Our home and contents, car and camper trailer insurance is a perfect example of this. If you don’t spend 2 minutes of your time checking the price of insurance each time one comes through, you are chucking money out the window.
I do it every time, and almost every time the online renewal price for a new policy is a hundred, or more dollars cheaper. I ring and ask why, and get the usual sales spiel, and if they wont match it I take out a new policy and cancel the old one. Some insurance policies save us several hundred dollars, for literally 10 minutes of work.
In WA, there’s now a heap of gas suppliers that you can get your gas for your home from. I kid you not, we are up to 56% discount on gas now, when going back 5 years we only had one option, and that was paying full retail price.
Your home loan is a massive way you can save money. I am on the phone or email every 3 – 6 months or so trying to negotiate a new rate for our mortgage, and often have a win. Dropping down 0.5% on a 400k loan is 2 grand a year, for a couple of minutes of your time. Simply ring your bank up and ask to speak to their home loan department, and say you’ve been looking around and want a better deal.
Take a few minutes before calling to see what the bank you are with offers new customers, and what other banks are offering. Look around, and I guarantee you’ll find banks that are far better interest rates, and if your bank wont play ball, seriously consider moving.
I read a long time ago that you should spent at least one day a year off work, where you sit down and go through your finances, bills and so forth. It shouldn’t take a day, but I’d almost guarantee it will pay more than your daily rate at work!
Learn to be super frugal
I’ve always been a miser, and Sarah reminds me of it almost daily. In Australia, we have so much, and if you learn the practice of minimalism, and how to be frugal you can save a huge chunk of money.
Instead of blowing huge amounts of money every weekend, we learnt to do things that were low cost, or free, and put money away for later on, and it pays dividends very quickly.
Increase your income
Whilst this might seem overly simplistic, you might be in a position to take a new role that pays better, and we’ve never been in a better time for people looking for work. When I started working for the business I was with for 13 years prior to our lap of Australia, I began with no skills or trade on a very low income, and when I left them to do our lap of Australia, my income had gone up nearly 3.5 times.
I worked my backside off and was rewarded for it, with a heap of tickets, a trade qualification, management training and a role looking after a small team of maintenance personnel. I genuinely cared about my role, the business and the people I worked with and it showed. This came at a cost, but if you can increase your income considerably then its so much easier to put a good chunk of money away.
On top of the wage increase, my last role came with a work vehicle, which was able to be used for limited private use, and that saved us a huge chunk of money with fuel prices going through the roof, and my return trip each day of around 65km.
Take lunches to work
Each day, we had a smoko van arrive at 8AM, and 12PM to work, and I’d see hordes of people heading outside to get their food. I can tell you right now with absolute certainty, if I purchased my food each day for work from that van, I’d burn $30 – $40 a day, and there is zero chance I would do this.
I bought something from that truck maybe once in 13 years, and took lunch in every single day. My biggest tip in this regard is to get a second freezer at home, and to make a bit more food and freeze it. Our freezer would regularly have 30 – 100 frozen lunches in takeaway containers, ready to go. A few times a week I’d take a heap of lunches in and put them in the freezer at work, then heat them up as needed.
It was good, tasty food that was healthy, easy to re-heat and it saved us thousands of dollars.
Pay your mortgage down
If you don’t know what an offset account is, or how paying your mortgage down can help you, you need to look into it. Being very frugal, we were quite happy to put extra money into our offset account, and live off a credit card that gets paid off each month so we have no interest incurred. This works for us, but not for many others, and they prefer to just pay their mortgage down.
Your 30 year term for the home loan costs you an absolute bomb shell, and for the first few years all you are doing is paying the interest down. A 400k loan is going to cost you somewhere around the 800k mark if you drag it out to the maximum term, and once you knock a bit off the difference is astounding.
If you have 50k offsetting your mortgage, you are going to be saving about 50 bucks a week in interest alone, which adds up considerably over time.
Get rid of any debt except your house loan
There’s a lot of people who have car loans, personal loans, credit cards and plenty of other options. Your best option in these scenarios is to get rid of it, ASAP. Paying huge interest rates on items that are going down in value kills your finances, and is not something we’d recommend.
The only exception here is your HECS debt, which has a very low ‘interest rate’ if you want to call it that, and can be paid off nice and slowly if you like.
Sell things you don’t need
About 12 months before our scheduled departure date around Australia, we started collecting things and putting them on Facebook Marketplace. I was actually quite shocked at the amount of physical materials we’d collected over the years, and we made several grand very quickly just selling items that we no longer needed.
One mans trash is another mans treasure, and Sarah would laugh at me for advertising something small and insignificant for $10 or $20, and I’d often laugh back when I had 50 people messaging me for it, and it easily sold.
For many people, its really easy to make a grand or even more just from selling bits and pieces around the house that you no longer need. This does two things; puts money in your pocket and makes your home a more enjoyable place to be with less clutter and junk.
Buy what you actually need
Driving through some of the mining towns up north, and I’m reminded of how much money is thrown around every day. Every second house has a decked out Land Cruiser, boat, caravan and more toys than I could dream of under the sun.
Is there anything wrong with this? Not at all; you do you, but the thought of spending hundreds of thousands of dollars on various toys that you may or may not need just doesn’t sit well with us.
We could have purchased a 200 series (now a 300, I guess), and a nice caravan, but I wasn’t sure that the extra expense was justified, and so we stick with our current 4WD and Camper, and we’re pretty happy with it overall.
You don’t need a 200k plus setup to travel Australia, nor do you need a 65k Tesla to drive around at home. By adjusting your desires you can make a dent that is so large you’ll laugh about it in a few years, and there’s a reason I drove a bunky old 1995 Toyota Corolla around for many years prior to getting a work vehicle.
That thing saved us thousands of dollars; I purchased it for $4250, did most of the maintenance on it myself and it ran on the smell of an oily rag. I ended up selling it for $2500 after clocking up about 160k, and whilst it wasn’t the safest thing in the world it was a big part of our saving for a lap of Australia.
Start a side hustle
There’s lots of ways that you can make a few extra dollars, without selling your soul or doing anything dodgy. I know people who’ve picked up extra flexible working hours with companies doing remote work, and those who install fences and do paving on the weekends.
I know people who’ve done well through YouTube or blogs, or who buy items and sell them for a profit. You can rent your caravan, RV or camper trailer through Camplify and make a decent amount of money doing so (although not everyone is too fond of doing this), or you might be able to offer a part of your property for campers for a small fee.
Don’t get caught up in the MLM or get rich schemes, but you can legitimately make money online and offline with a bit of thought. Of course, quality of life comes into it and if you are working every minute of every day you’ll soon find yourself with other issues, but you can do a side hustle successfully, and many do.
Our situation now
I’m not going to go in depth into our financial situation. We’ve done OK for our age, but its come about through nothing more than frugality, seriously hard work and a commitment to an end goal.
We’ve received no leg up from anyone, no inheritance or anything else, but both worked full time for as long as we could (Sarah stopped working when our first child came along, and never went back), took overtime where it was available and stashed every cent possible away for about 15 years.
I remember weeks on end before I had kids where I was doing 60 hours a week, and if you are smart with the income you can put a huge chunk of money away. For a long time we would live off Sarah’s wage, and put my entire wage away in savings every year.
We own our Isuzu Dmax and Reconn R2 outright, the large majority of our house and are still living as frugally and carefully as we can, to make every dollar go further. This has been our secret to travelling; reduce our expenses down to as little as possible, and then you can survive on a much smaller income.
We aren’t millionaires (or even close), and honestly we don’t aspire to be. That said, we did want to be able to work less, travel more and spend more time together as a family, and you do need a certain financial position to be able to do this long term.
This very blog has been a part of helping us get to where we are today, and the income it makes now allows us to travel and work on it full time. No words can truly express how much time and effort I’ve put into this website though, and its not a pathway I’d recommend lightly.
We regularly enjoy listening to podcasts about money, and the more we learn, the more we realise there’s no secret. There’s no get rich schemes. You can get lucky, but for the most part its just hard work, commitment and reigning in your spending. That’s it.
If you really want to travel Australia, then maybe you can use some of these ideas to help you get there!
Yes, this post is very different to many of which you’ll read here, but if you liked it (and even if you didn’t), please leave us a comment, and we’ll get back to you!
This has been so great to read. Thanks very much.
I’m glad you found it useful. Not the normal topics that we cover, but its still relevant to what we are doing.
All the best
Great article. You really nailed it by indicating learning to control what you spend. You sound like a younger version of me, taking lunches to work, grabbing extra overtime whenever available etc. Now happily retired and touring with a minimalist setup when we get the chance.
Yep, its really easy to spend money without thinking too much about it. Sounds like you’ve done well for yourself!
See you out there