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How to Save Money for Your Gap Year

gap year savings

Gap years are practically a rite of passage for for 20-somethings from several countries around the world and it's catching on in the USA. This is your year to break away from the usual routine of life. For just one year, you can unchain yourself from classrooms and cubicles to explore everything else that's out there. It's your time to be spontaneous, try things you normally wouldn't, and experience different cultures.

And it's at about this point in the article you start to think, "Sure - that sounds great, but how on earth can I afford to take a year off work let alone a year off to travel?"

For starters, remember that travel doesn't have to be extremely expensive. The exchange rate for American dollars in countries like Thailand, Mexico and Portugal makes visiting foreign lands a lot more affordable, but also how you travel makes a difference. Staying in hostels, cooking your own meals and taking buses instead of planes and trains can cut your travel budget dramatically.

But no matter how many corners you cut on the road, you're still going to need a lump sum of money at the start of your trip to make this whole gap year thing possible. That's where we can help. Saving up $20,000 for a year of travel might seem impossible at first, but when you look at all the things you spend money on and start to think of creative ways to earn even more, saving almost becomes addictive. So put on your working shoes, prepare to simplify life and watch the money roll in.

1. Work as much as possible

Obviously, you need to have a job to earn money, but once you have a job - it's time to take working to an entirely new level. If your job allows, ask to work more hours. Not only will you earn more, but you'll also be less likely to spend money if you're working all the time. If your job can't possibly give you any more hours, get a second job, freelance or help out in the neighborhood. In the summer, offer to mow lawns. In the winter, offer to shovel snow. Look at the money in everything around you and find a way to earn it. People, especially young people, are capable of working 50, 60, and even 80 hours per week if they really put their mind to it. All you have to do is buckle down for a year - at most - and when you start to feel exhausted or get sick of your job, just imagine all incredible adventure you're about to embark on.

Savings for gap year

2. Give yourself a weekly allowance

Once your work schedule and some sort of routine are sorted out, write down your expenses. How much money do you need for gas, food, rent and entertainment each week? While writing this list, start to cancel out the things that really aren't necessary. Don't worry, we'll help point these things out later. Transfer that amount of money to your checking account at the start of the week. Make sure to stick to only spending what’s in your allowance and be brutal on yourself if you have too. A few weeks of having to cut your food allowance or biking to work, because you spent money on beer "by accident" one night, will teach you not to do it again. Place the rest of your money into a separate bank account.

3. Open a separate bank account

Having your gap year savings in a bank account you use daily is too much of a temptation. Who’s to say you won't have a bad day, see that $2,546 balance and blow a few hundred shopping or partying to make yourself feel better. Open a savings account, cut up any debit cards or check books that come with it and promise not to take a penny out, no matter what. You could go even further and put your money into a CD (certificate of deposit), where you'll earn a higher interest rate than you would with a savings account, but will be penalized for taking money out early. Alternatively, you could have your parents open an account, so you don't actually have access to it. No matter what you do - peek at the balance every month for a little motivation.

Savings for gap year

4. Cut your vices

Cigarettes. Alcohol. Coffee. Clothes. Bottled water. We all have our quirks and bad habits, which often come at a price. Think about the one thing you don't need, but want every day, week or month. Next time you indulge in it - take note of the price. Now calculate how much that vice is costing you a year. A $7 pack of Marlboro Lights twice a week adds up to $728 per year. Those boozy Saturdays that end up costing you $80? They add up to $4,160 per year. That bottle of $1 water you buy every day at the gym ends up costing you $365 per year. All these bits of money here and there can be reduced or totally avoided.

Cut down on your smoking and drinking. You should be doing that for your health and well-being anyway. Buy a BPA-free water bottle for $5 at the store and start filling it with water from the sink before you go to the gym. Not only is that water exactly the same, but you'll also be helping the environment by cutting down on the amount of plastic you use. Last, but not least - brew your own coffee! Those Starbucks cups are so 2005 anyway.

Who's to say you won't have a bad day, see that $2,546 balance and blow a few hundred shopping or partying to make yourself feel better. Open a savings account, cut up any debit cards or check books that come with it and promise not to take a penny out, no matter what.

5. Move back home

This is probably the hardest way to save, because having your own place gives you complete independence, but moving home will help you save more than any other suggestion on this list. Most people spend at least $400-$600 a month on rent. That's $4,800-7,200 per year, not including utilities. Your parents, brother or sister might ask for a bit of money, but you'll save a lot with this tip regardless.

If your job allows, ask to work more hours. Not only will you earn more, but you'll also be less likely to spend money if you're working all the time.

6. Start cooking at home

With the amount of money you spend on one meal at a sit-down restaurant or two to three meals from a take-out place, you could pay for an entire week of groceries. Whether you love cooking or despise it - there are always affordable and practical ways to cook at home. Make yourself a grocery list and really consider how much food you need, because plenty of people overdo it and end up throwing things away. When grocery shopping, compare prices, buy generic, plan what you make based on what is on offer, sign up for a rewards card at the store and use coupons. It's totally possible to cut your grocery budget down to $20-30 per week and once you start finding ways to save it could be even less than that. Don't worry if your first trip to the grocery store costs a lot more than that. You'll be buying essentials like salt, pepper, spices and olive oil that you won't have to purchase again for a while.

Gap year savings

7. Go vegetarian

If you really want to cut down on that grocery bill - cut out meat. Depending on what kind of meat you like (chicken wings, ground beef, turkey slices), it's going to cost you at least $4-6 per pound, minimum. A pound might last four or five meals and there is also the chance that it will go bad. However, a bag a dried red lentils costs around $8 and could last you a month. Cans of garbanzo beans cost about $1 and can last you two to four meals, depending on how much you stretch them out. You can still indulge in a nice steak every now and then, but the numbers prove that taking meat out of your diet can save you a lot of money over time.

8. Exercise on your own

As fantastic as it is that you have a gym membership and you actually use it, you can exercise in ways that won't cost you a penny. All those fancy machines and classes offer the same results as running outdoors and doing pushups and sit-ups. Further, these days there are plenty of free tools to try different workout plans and even work harder with the help of celebrity trainers. Nike Training Club is just one free app available that offers entire workouts and even comes with someone to motivate you. Further, you can find the same exact training you would in classes, whether it be yoga or Zumba, online. That's $30-70 a month you won't have to pay anymore.

9. Start walking, cycling, carpooling and/or using public transportation

You might not need to set aside time to exercise at all if you stop using your car and start getting places the old-fashion way. Whether it be work, a friends house or the grocery store, if it's less than a mile, ditch your car. Walk or cycle to and from work instead of your daily run and you're saving time and money. If you need to get somewhere further, why not plan a carpool with your work friends or take the bus instead?

With the amount of money you spend on one meal at a sit-down restaurant or two to three meals from a take-out place, you could pay for an entire week of groceries. Whether you love cooking or despise it - there are always affordable and practical ways to cook at home.

10. Make use of things at home

You don't have to go out to have fun. Instead of going to a restaurant for a meal and drinks with friends, have them over for dinner. If you all pitch in and cook together - you'll save money and it can be quite fun. Sushi night anyone? Instead of going out to see a new movie, why not watch the classics on your own TV or computer. There are so many great films from the past to catch up on before adding new ones to your list. You could also start reading more, and enjoy the outdoors - nature is always free. Also, you can spend time planning your gap year route and researching places.

Savings for gap year

11. Ask for money at every holiday

One lesson you'll learn when traveling is how little you need. You see that closet and dresser in your room? You'll only be able to fit about a quarter of their contents in your suitcase. Even people who could care less about their wardrobe or having candles and picture frames in their rooms probably have much more than they need. When your birthday or the holidays come around, instead of asking for more things, ask for something that will actually come in handy on the road - money. Be upfront about this too, because a lot of people will put a lot of thought into what to get you. Explain that you are going traveling and can't take anything. What you really want is their help to make this trip happen.

12. Enter a medical or clinical trial

This suggestion is definitely not for everyone, but it's a very quick and easy way to make a lot of money. Pharmaceutical companies often need to test their products on human beings before they can offer them to the public. It's an extremely important part of the process of getting a drug to the counter, so they'll often pay a lot of money to people willing to be their "lab rats," for lack of a better phrase. Every trial is different, but some can actually be quite nice.

If you're on an in-patient trial, not only do they feed you and give you a place to stay for free, but they often give you entertainment in the form of video games, films and internet. Plus, you might find a lot of 20-somethings like yourself in there. Now, we're not trying to make it sound like the greatest thing ever, because there is a lot of risk involved in doing clinical trials. Usually the more a company is willing to pay you, the more risk that’s involved, but for doing a two-to-four-week medical trial, you could make anywhere from $2,000 to $20,000 and up.

Start your search for medical trials with a Google search, then pick from the results. Some are hosted at universities or hospitals, but not all. We must reiterate that there is a risk in volunteering your body for medical or clinical trials - so do not take it lightly. Read thoroughly about the trials offered and what sort of effects they could have on your body.

When your birthday or the holidays come around, instead of asking for more things, ask for something that will actually come in handy on the road - money. Explain that you are going traveling and can't take anything. What you really want is their help to make this trip happen.

Savings for gap year

13. Start planning and booking early

Once you save up about half of your goal, reward yourself by booking a few things for your trip - you'll also save some money by doing so in advance. Look to see what accommodations or activities offer discounts for booking in advance. Also see what programs can help you save money, whether it be through a hostel organization or round-the-world ticket. There are a million and one travel programs that you will come across when planning a trip. Not all will benefit you, but if you find one that fits in with your trip and travel goals, go for it. Sometimes, it may cost you a bit more money then going about it independently, but oftentimes these organizations facilitate really awesome and unique learning opportunities for travelers, so the opportunity cost is less.

Organizations like First Abroad or Carpe Diem are awesome programs to consider for younger travelers. Of course, book that departure ticket as soon as you can. Booking early on flights can often save you money and will hold you to meeting your monetary goal by a certain date.

14. Work from or on the road

You don't have to take a complete year off work to go on a gap year. In fact, there are plenty of ways to work on your gap year. For starters, working holiday visas allow U.S. citizens to legally work for up to one year in Australia, New Zealand, Singapore and Ireland. If you're worried you won't be able to save enough money to travel for an entire year without working, plan to spend a few months or even the entire year in one or all of these countries.You could even spend a few months of your gap year working in your home country, but an entirely new city. Further, you can freelance from the road in a number of different ways. Or, consider teaching English abroad. Finally, you will find a few under-the-table jobs here and there on the road. Some countries take this as a more serious offense than others, so just be careful whenever doing this.

15. Volunteer for free things

While it won't be legal to earn money in every country you visit on your gap year, you can work for things other than cash. There are so many work exchange options in the travel community. Whether you’re cleaning dorms for a few free nights at a hostel in Switzerland or WWOOFing on a farm in Australia for a few months of free room and board, work exchanges not only offer you a chance to give your bank account a break, but they also make for very unique and special travel experiences. You may not remember a historic sight you saw in London, but you'll definitely remember the crazy Irish guys you mopped floors with for a few days.

These are just a few of many ways to cut costs and save money for your gap year. You don't have to do them all and we don't really suggest you do, because everyone needs a reward every now and then, no matter how much they need to save. Take which ones work for you and leave the rest behind.

Remember that no matter how much you want to go away, you still need some form of a life when you’re saving for a trip. Reward yourself every now and then with a few drinks with friends or a new dress. Moderation is the key to longevity when you’re saving thousands of dollars in as little time as possible. Find what works for you and make it happen. If you ever start to feel down or get tired - just imagine your trip and think about how many more dollars it's going to take you to get there.

Photo Credits: API Study Abroad, Global Volunteer Network, 401(K) 2012, Amanda MTH and Tejvan Pettinger.
Photo of Bobbi Lee Hitchon

Bobbi started traveling abroad at the age of 16. Since then she's visited almost 40 countries and lived in three of them with study abroad programs and working holiday visas. Follow her adventures at Heels and Wheels, on Twitter, Instagram and Google+.