How to Save Money for Travel - Budget & Save for Your Next Trip

Colton, my husband and other half, is the finance guru in our household. His financial knowledge helped us save enough money for ‘the trip’, our 6 month sabbatical trip to Europe and Asia. So, I’ve asked him to share his tips to save money for travel to help get you on your way to your next big adventure!

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One of the most common questions we get about travel is, “how much does it cost?”

While we have found that travel can be affordable, the first building block that has allowed us to travel is having all of our finances in order and making saving a priority.

If you’re wondering how we save money and stay on budget while on the road, check out Nikki’s post, 8 Simple Tips to Help You Save Money While Traveling.

Quick disclaimer: We know that not everyone has the means to save money, especially if they are working hard but not getting paid enough to pay for their basic needs. Travel is a privilege, and though money is not a finite resource, it doesn’t always come easily into our lives. We are in no way trying to minimize the reality that having the means to save money for travel is also a privilege.

Below you will find the steps and habits that we use to save for more life changing adventures.

(These saving tips apply to any goal, not just to save money for travel. Saving money is saving money, no matter how you end up spending it!)

Now, I will say that when Nikki and I began saving for travel and for ‘the trip,’ we took pretty aggressive steps to do so. All of the tips listed below are things we did to save $30k in 1.5 years, but you can take or leave any of our tips. Up to you!

When my husband and I left for our 6 month trip to 18 countries, we knew that airfare would be one of the single largest individual costs of our trip. So, after a little bit of research, we found a way to get affordable flights all over the world: travel credit cards.

This post may contain affiliate links. If you use these links to buy something I may earn a commission, at no additional cost to you.

The first note here that I need to make is that almost no flight is truly free, you do have to pay the taxes and fees. But, what if I told you I just bought a $6 flight from North Carolina, USA to Athens, Greece this week. Or that I’ve spent only $11 for me and Colton to fly from NC to Turkey?

Would you believe those numbers?

I never in a million years thought I could fly abroad for less than a few hundred dollars, and that’s if I somehow found an amazing deal!

It wasn’t until I came across travel credit cards and the world of points and miles that I understood how these serial travelers I was seeing everywhere were affording their flights.

The trick was, they were barely paying for them.

So, after tons of research, applying for credit cards, hitting bonuses, and of course getting everything in order to leave home for 6 months to travel, I bought our one way flights out of the country for $11.

How did we do it?

The world of points and miles, of course!

Let me tell you how we did it and give you the information you need to start earning free flights with your credit card!

Let me preface this with one statement: the world of points and miles is BIG and there is a lot that you honestly don’t need to know to just get started.

So, I’m going to give you the most necessary information to get you started and cut out all the fluff. Let’s go!

I promise you this is not a scam, because maybe that’s the first place your mind is headed when I say “free” flights.

In fact, paying with points and miles to purchase flights at insanely low prices is entirely legal, I promise!

Want my help choosing a travel credit card?
Fill out my Free Credit Card Consultation Form & I’ll email you personalized recommendations!

Interested in checking out my travel credit card recommendations?
Find them here!

What Are Points and Miles

Table of Contents

Points and miles are the reward currency of airlines and hotels: aka loyalty points.

I’m not talking about the points you earn by flying with an airline repeatedly, that you only rack up over several years.

I’m talking about points and miles you earn just from having the credit card you already use!

Each bank or airline that offers credit cards with points and miles use them as an alternative currency for purchasing flights.

Many of the banks that offer travel credit cards have both airline and non-airline branded credit cards: a.k.a the airline the bank has partnered with offers airline miles as the sign up bonus, not credit card points. Those miles can only be used with that airline.

If you apply for a bank branded card with no airline association, you’ll earn points with that bank that can then be transferred to their airline or hotel partners.

How To Get Points And Miles With Travel Credit Cards?

The fastest way, and most likely reason why you’re wanting a travel credit card, is to earn points with a sign up bonus.

Most banks offer a sign up bonus of varying amounts after a certain amount of qualifying purchases on the card in the first few months.

It might sound something like this: “earn 60k bonus points when you spend $3,000 dollars on purchases in the first 4 months.” Yadah yadah.

But, you will also earn points while using your card on your everyday purchases! Some cards offer bonus categories, like 3x on grocery purchases, or 2x at restaurants, etc. So, when you spend money on your card, you’ll earn points in return that can be redeemed for various things, like flights or hotel stays.

Generally, if you’re wanting to redeem miles for flights or hotels, you’re going to need a good chunk of miles to do so.

You can purchase some domestic flights with as little as 8,500k points one way, but if you’re flying international, it will likely cost you 15k one way, at the very least.

Of course, the cost of award flights in points can greatly vary and is not always directly tied to the cash ticket price.

Other ways to earn points with travel credit cards include anniversary bonuses, giveaways, and transfer bonuses. These come and go and aren’t something I would rely on.

For the purposes of this post, which is all about a beginner’s guide to free flights with points and miles, sign up bonuses are your very best friend.

How Much Are Points and Miles Worth?

Not all points are created equal.

Some points are more valuable than others simply because you can transfer and redeem them in more ways.

Points and miles also get their value depending on the deal you get when redeeming them.

Let me give you an example scenario to explain…

For example, let’s say you have 75k Capital One miles and you want to fly from Atlanta, Georgia to Athens, Greece for an amazing holiday eating delicious Mediterranean food and swimming in crystal clear waters for 8 days.

These are the flights you’re looking at. They’ll take you to Greece during the best time to visit, late summer when it isn’t too crowded and not too hot.

You have a few options for how you can book these flights with points

Option 1: Redeem Points with a Travel Portal

Option 1 is to redeem your points through Capital One Travel and their online portal. When you do this, you’re going to get a fixed redemption rate of 1¢ per mile.

So your 75k miles would be worth $750 for travel. You could use those 75k miles to buy a flight worth up to $750 through the Capital One Travel portal. That’s over half of what this ticket is worth. So you would still have to pay about $390+ on top of your 75k miles for this ticket.

We can definitely do better than that!

Option 2: Transfer to a Partner

Option 2 would be to transfer your Capital One miles to one of their airline transfer partners, then book the flight on their website using your points.

If you did this, those 75k miles could become 75k FlyingBlue points (Air France & KLM’s loyalty program and one of Capital One’s transfer partners).

The same exact flight booked on Air France with cash would cost you $1,142.

But, you can transfer your points from Capital One and over to FlyingBlue, so now you have up to 75k FlyingBlue miles! Let’s use them!

If you use FlyingBlue to book the exact same flight, you would only need 30,000 miles and $208 in taxes & fees. Way better than using all 75k and only covering half of the cost!

And, instead of paying $1,142 out of pocket for a round trip ticket to Europe, you’re only paying $208 plus 30,000 points.

*you want to transfer only the amount of points you need. In this scenario, thats only 30k of the 75k.

In this scenario, you would be redeeming your Capital One points, through FlyingBlue, for 3.1cents per mile. Now that’s more like it!

This is why points can be so valuable and why transfer partners can be the best way to go when redeeming points.

I know that was a lot, so let me summarize if for you:

Out of pocket price for ticket Atlanta to Athens: $1142 on Air France/KLM
Price of same ticket booked through Capital One Travel: 75k miles + $392
Price of same ticket booked through FlyingBlue after transferring Capital One miles: 30,000 miles + $208 in taxes and fees.

You would come out of this deal with around 45k Capital One miles left in the bank. That’s enough to buy you another roundtrip flight to Europe.

Now THAT’S how we use points and miles to our advantage 🙂

RESOURCE: Free List of Transfer Partners & Airline Alliances + How to Use Them

*be sure to only transfer the points you need and no more so you can keep the extra points with your bank and transfer them elsewhere in the future*

How Do You Redeem Points And Miles For Flights?

The way that we typically redeem our points and miles is by using them to purchase flights. We do this by transferring our credit card points to transfer partners.

The scenario above is a great example of how we would use our points and miles to get amazing deals on flights.

Here is that chart again that I made to show you where you can transfer points based on what program you’ve accumulated points with.

The process of transferring points can be a bit complicated, but I’m going to help you out here.

Here is the basic rundown of how to redeem your points for flights:

Accumulate points on your credit card
Research credit card airlines transfer partners
Search Google Flights or Skyscanner to find flight routes
Search for award flights on airline transfer partners
Find desired flights and see how many points/money required to book them
Create a frequent flier account with airline if you don’t already have one
Transfer points on your bank’s website to transfer partner of choice
Book those flights!!

To use the example from above, I would find the flights I want and make sure I have enough points to pay for them. Then, I would log into Capital One and go to the Capital One Travel portal to transfer my points to FlyingBlue. Once my points were transferred, I would buy my flights!

The real trick is finding award flight availability and the deals that are out there waiting to be had! It takes a little bit of time and practice but you’ll get the gist!

What Travel Credit Cards Are Best?

For me to answer this question, you’ll need to ask yourself a question first: what are your goals?

Are you looking to cover some international long haul flights? Maybe you’re an avid domestic traveler and would like to cover a few legs of travel for your upcoming trips. Would you like to stay in nice hotels for just the cost of fees?

It’s good to look at the options and decide what you think will work best for your goals!

If you want to cover some flights, I would find a card that has great travel benefits and flexible rewards. If you’re more interested in hotel stays, get a hotel branded card!

You can find my favorite travel credit cards and all the information about them on my
Travel Credit Cards Recommendations page.

Want my help choosing a travel credit card?
Fill out my Free Credit Card Consultation Form & I’ll email you personalized recommendations!

“Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, hotel, airline, or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post.”

Know Your Money Habits

This is by far the most important first step in taking control of your finances and finding the freedom to both spend and save.

Have a System to Keep Track of Spending

When you have multiple accounts, and even multiple people in your household finances, it can quickly become very difficult to keep track of money coming in and money going out.

The best way to learn where your money is going is to get budgeting software or an app that puts all of your banking and credit card accounts in one place. This will give you a snapshot of how money is flowing in and out of all of your accounts.

Our goal here is to have a good grip on our finances so we can maximize savings and therefore maximize our travel account!

Why Have a System to Save Money for Travel?

Having a system that lays out all of your accounts and spending is key to knowing where your money is going. You need to do this before you even try to begin budgeting.

Having a system in place that consolidates all of that information for you is going to help you see what you’re spending your money on, where you can find savings, and how much you have left over to go towards your savings account (aka travel account!).

Our Recommendation – Budget Software to Save Money for Travel

Since getting married in 2019, we have tried several different budgeting softwares, but we have landed on one that we really love.

The one that we like the best is called Tiller.

Tiller is a software that links all of your bank accounts into Google Sheets or Microsoft Excel. Tiller automatically updates all of our transactions and account balances on a daily basis, then it is just up to us to categorize each of our transactions.

Once your expenses are categorized, you can clearly see where your money is being spent.

Tiller shows you your financial life in a spreadsheet, automatically updated each day.

Once you have found a software that works for you, the next step is to estimate your monthly income and expenses. After that, you can start the process of choosing where you want your money to go.

Budget software for saving money for travel — This is what our Tiller budget looks like, with all the values zeroed out.

Study Your Habits

After organizing your finances into a system that you can work with and understand, you can begin analyzing your finances. Sounds RIVETING, doesn’t it?

What does this mean? Really, it just means looking at what you earn and spend when it’s all laid out in front of you. Now, you have a good grip on the state of your finances.

Take some time to notice what you’re spending your money on and the patterns and habits of your money flow.

Determine Where You Can Find Savings

Get your budget set up using Tiller, then track your expenses for a month to two without changing the way you spend/save.

This allows you to have a reference for roughly how much you spend each month on various things such as groceries and eating out, gas, housing, entertainment, subscriptions, shopping, etc.

Once you have a baseline for how much you are spending, you are able to determine where you are spending more money than you would like to and change your habits.

Finding areas in which you can reduce spending can be difficult, so below are the 5 biggest categories that we have found savings.

All that extra money goes towards our next adventure!

The really hard truth about saving money is that the only way to save is by living below your means. If you haven’t been paying much attention to your finances up until this point, it might be hard to look at your money and realize you’re spending more than you actually have. If that’s the case, it may take a little adjusting to get into the habit of spending less so you can save more.

1. Eating Out and Groceries

On average we only eat out maybe one night per week. Buying groceries and cooking for ourselves is one of the ways we save the most money.

It can be hard, and you don’t need to deny yourself every time you’re craving yummy takeout. Just keep in mind how quickly food costs can add up!

2. Housing and Rent

This is where incredible savings can be found if you are willing to sacrifice a little bit.

Often, there are moves we can make to save money when it comes to housing costs, whether it be downsizing, getting a roommate, or even moving to a less expensive location.

Sometimes, you really are living very simply and still forced to pay a lot for housing. If that’s the case you’ve already found your savings.

3. Insurance

With so many insurance companies out there, it’s easy to shop around and combine your insurance to save money. This is especially true for car and home insurance.

Because its a recurring monthly expense, even small savings in this area will add up.

4. Clothing and Shopping

Asking the simple questions of want vs. need is a great way to reduce spending. Don’t hate me for saying it, but you probably don’t need half the stuff you buy on a daily basis!

You can even begin selling gently used clothing and home decor as a way to make some extra cash!

Great ways to do this online are with Facebook Marketplace and Poshmark. You can also find your local consignment shop and sell your clothes to them.

5. Subscriptions

With so many subscription services out there it is easy to sign up for a new service, barely use it, and forget to cancel.

Tracking this in a budget is the best way to evaluate and cancel unused subscriptions. (Trust me they can add up fast.) Asking friends and family to share services also keeps costs low.

Tell Your Money Where to Go

Have you ever been at the end of the month and wondered “Where did all my money go?”

I’ve certainly been in that position many times before. This simple principle helped me turn that habit around.

The idea is simply to be very intentional in telling your money where to go. Your monthly saving amount should be a line item in your budget, like any other necessary expense.

This was key to saving up enough money in 1.5 years to then do 6 months of full-time travel!

Below are a few helpful steps to telling your money where you want it to go.

Save First (Pay Yourself First)

This is the big ticket item that changed my entire view on money. SAVE FIRST! After you pay yourself first, whatever is left over at the end of the month is fair game spending money.

Have you planned to save $300 every month? Put it in your savings right away, and it will be much easier not to spend it.

The typical philosophy that many people have is to spend first, then save what may or may not be left over. If you can create a habit of always saving first, you will be amazed at how much faster your savings will grow.

After you have taken care of all your expenses and savings then you can feel the freedom to spend the extra on whatever you want!

We were able to take a trip to California even while we were saving for our big trip because of our saving habits.

Final Tips and Tricks – Save Money for Travel

Even with a great plan and good intentions, saving can be hard. So here are a few tips and tricks that I use to help us save money for travel.

1. Open a Savings Account Somewhere Else

Set up a savings account with a different institution than where your checking account is. Then, set up automatic monthly withdrawals from your checking account to your savings account (I do this every month).

If your checking account is automatically doing the saving for you, you’ll have a much easier time sticking to your monthly saving goal.

Out of sight, out of mind!

2. ‘Forget’ About Extra Money

If you have a side hustle or occasionally make some money on the side, “forget” about it.

Whenever I make some extra income that I have not already accounted for in my monthly budget, I immediately send it to my savings account. Rather than just viewing it as extra spending for the month, I see it as an extra spending for our upcoming trip!

3. Set A Goal

Set a goal for your savings and think / plan for your goal often. In our case, our passion is traveling so we are constantly finding ways to save money for travel.

In order to stay motivated to save, we often talk about our future travel plans and dreams. Setting a goal keeps us focused on saving money for travel and our next trip.

4. Don’t Look at Your Savings

Try not to look at your savings account too much. If you follow the first tip I’d call this, “set it and forget it.”

When you are regularly saving and not checking up on your savings account often, you’ll be pleasantly surprised how much you have saved the next time you look.

I hope that this guide has been helpful in giving you the tools you need to save money for travel. for you on your journey to funding your next adventure!

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What Are Points and Miles

How To Get Points And Miles With Travel Credit Cards?

How Much Are Points and Miles Worth?