And this was being abnormally extravagant. It’s possible on much, much less. People seem to think that traveling has to be expensive. Flights are expensive, hotels are expensive, eating out is expensive. This is all true if you travel the way everyone else does. But you don’t have to.
Traveling cheaply also doesn’t mean that you have to be uncomfortable. I ate out almost every meal, paid for bus rides, taxis, museums and hotels. I did all this while spending less than $40 a day in total.
Traveling in luxury doesn’t have to be expensive
In December of 2014 I quit my job and booked a one way flight to Chiang Mai Thailand.
During my time in Southeast Asia, I stayed mostly in Chiang Mai as a base but traveled around Thailand and to several islands including Koh Chong, Koh Lipe and Koh Tarutao. Tarutao is where the fifth season of Survivor was filmed. That’s the only commercial operation that has ever been allowed on the island. Now, it is a national park run by the Thai equivalent of a forest service. I ventured into Myanmar and I flew into Cambodia to visit Angkor Wat and spend several days there.
I took buses to temples and taxies around the cities. I even bought a motorcycle in Chiang Mai. All this to say that it was a very active trip and I spent money on lots of things that I wouldn’t have spent money on here in the United states.
My actual expenses
What I’m trying to say is that traveling doesn’t have to be expensive. And flights are the most expensive part of the trip. I’ll get to how to avoid paying for the flights a little latter.
Once you get to Southeast Asia (and lots of other parts of the world) then everything is much cheaper than it is in the US. For example in Chiang Mai, dinner would often cost me only $1.10 for a full meal.
I didn’t realize that for the same amount of money I was already spending, I could be actively traveling around the world and living quite lavishly in some cases. Below I outline the expenses I incurred over the three months.
One thing to note about this list below is based on a finite amount of cash I took with me and a few charges to my bank account. So I know for sure that the total amount that I spent is correct. Though, in a few cases I didn’t have receipts and had to estimate. But this should give you a very close idea.
*The $300 for the motorbike I got back because I sold the bike at the end of the trip for the same amount.
*Misc cash includes a lot of the touristy stuff I did. Like entrance into museums and taxi rides and an elephant park and an ostrich ride and stuff like that.
How to avoid paying for flights
Not paying for flights is the most important thing you can take away from this post. You’ll notice that I hardly paid anything for the flights to Thailand. This is really important for traveling on the cheap. The amount that I did spend on airfare was for the taxes and fees for the flight. This is why this whole trip was possible for an average of $38 a day.
I bought the flights with miles that I’d earned from credit card bonuses. And actually I’ve done this several times. I’ve paid for flights to Greece and Prague and Mexico with miles. Each of those trips I only paid taxes and fees on the flights.
Using credit cards, it’s not only possible to pay just the taxes and fees on flights, it’s quite easy. That’s where travel hacking comes in.
Travel hacking is just what people call earning points without flying to redeem on airfare later. Credit cards are the easiest way to do that. Credit cards offer signup bonuses when you sign up and meet a minimum spend on a credit card. Some cards actually give you enough miles for a round trip ticket to Europe in just the signup bonus.
So all you have to do is pick the right credit cards that give you large bonuses and sign up.
Then you meet the minimum spend on the card. The minimum spend is just an amount you have to spend on the card in the first three months to qualify for the sign up bonus. It’s usually a few thousand dollars.
I know this seems like a lot. But you are just transferring the money you normally spend to this card. The goal is not spend any more money than you normally do. And if you don’t normally spend this much money in three months that’s not a problem. There are always ways to meet minimum spends without spending more money than you usually do.
There are 3 ways to always meet a minimum spend
1) Deferred spending
2) Manufactured spending
3) The old fashioned way
Deferred spending us just the idea that you can charge things to your card now, but not actually spend the money until later when you’d normally spend it. The easiest way to do this is to buy yourself gift cards to places you know you’ll spend money later. Like coffee shops or gas stations or retail stores. In the past I’ve put $500 on gift cards to Chipotle, Starbucks and Shell gas station to meet a minimum spend.
Manufactured spending is spending money without spending any money. For instance, for a while you could deposit money into a Target account with a credit card. Then withdraw the money immediately with no fees.
Manufactured spending changes a lot so you have to jump on them quickly. But when you get one that works its really fun. If I put an specifics on manufactured spending in this post, it would become outdated very quickly. So my best advice is to google ‘manufactured spending’ or browse flyertalk.com to find current ideas for manufactured spending.
The old fashioned way
The old fashioned way is the most reliable and the easiest for most people. Just ask your friends or family if they have any large purchases coming up. Then go with them to the store, use your card to pay and have them write you a check.
The bottom line is that the minimum spend is not a problem.
Then when the miles show up in your account, you use the miles for the highest value return on those miles. Flights. It isn’t worth it to spend those points on toaster ovens or bluetooth speakers or something like that. Instead you should book flights.
Will travel hacking hurt my credit?
Opening new credit account will generally lower your credit score. But only by a few points and only for a short time. If you manage your cards correctly, your credit will probably improve. When I started travel hacking, I had very little credit. The more I’ve managed cards responsibly, the better my credit has gotten. Now I have and “Excellent” credit score. This is a result of not missing any payments combined with the other credit factors – age of credit history, total accounts, and credit usage.
Now you know that Travel Hacking is simple. Sign up bonuses get you lots of points, you have 3 great ways to meet minimum spends even if you don’t normally spend much money, and you know it won’t hurt your credit. So now the problem is worry and forgetting. The banks make money when we forget about things and have to pay interest. That’s why we have a system.
I was worried that I’d forget a payment, or that my credit would be ruined or I would be stuck paying some huge hidden fee that I can’t get out of. And this is totally understandable.
The key to travel hacking is the system. You need to know when to open cards, when to cancel or demote them and how to book flights that give you the most value for your points. And you need to put this system into a calendar so you don’t forget. The system is what makes travel hacking responsibly possible.
I have a system I use and all you have to do is plug it in. The only change you’ll have to make is the card you use to pay. It’s nothing fancy. Just a spreadsheet tracking the credit cards I have and calendar reminders set to remind me when to review the spreadsheet and make a decision about downgrading or canceling cards.
Recently, I’ve been looking at what it takes to help people start travel hacking. It’s a bit more than I can cover in this post so I’ve put together a free email course that details exactly how to use miles to book free flights all over the world.
I’ve decided to break it up into bite sized emails so that it’s action-oriented and hopefully not overwhelming at all. By taking a small action every day, you’ll realize that in no time you’ll have enough miles for flights anywhere in the world.
I’ll walk you through opening your first card to booking your first flight. And I’ll show you how to do it so it improves your credit. All for free. There is nothing to buy.
Check it out here: Basics of Travel Hacking