If you haven’t read the previous steps in this series about choosing your adventure, managing debt, analyzing household expenses, and creating an adventure travel budget, then go back and read those steps.
Understanding your current household expenses and monthly budget are critical to creating a realistic savings plan because that information tells how much money you need to save.
How long will your adventure last?
Will you travel for three months? 9 months? Two years?
You likely have a pretty good idea of the nature your upcoming adventure, and you should have some idea of how long you’ll be out on that adventure.
By determining how long you plan to travel, you can calculate how much money you’ll need to save if you were to fund the adventure on cash savings alone.
In the model of the Adventure Possible Life, we plan for a year of adventure every five to seven years. In the example below, continuing to use our RV adventure as the working adventure, we’ll use seven working years inn our calculation.
We plan to work, save, and invest for seven years, and then spend for one year on an adventure.
If your time periods for saving or traveling differ, then you will need to adjust the calculations accordingly.
How much cash will you need to travel?
In the previous step, we determined that we’re budgeting $4,000 per month to fund on our RV trip, and we plan to travel for a year (12 months). So we’ll need at least $48,000 cash to fund one year of our adventure travels through savings alone.
On top of this $48,000, we’ll also need to set aside money for gearing up on our adventure.
For our RV trip, we plan to spend $20,000 to buy the travel trailer and related gear and supplies for our adventure. We’ll aim to keep gear costs lower by
For your adventure, you’ll need to determine how much money you need to acquire the necessary gear and supplies.
In addition, you’ll need to save money in cash reserves for transitioning back into the workforce, that period in which you return from your adventure, move into your new or old house, and start your new job.
We recommend saving at least three months of pre-adventure expenses to cover the costs of reentry. For us, that totals $10,000 per month, or $30,000.
Combining all of the above expenses, we need to save $98,000, which includes $48,000 (one year of expenses), $20,000 (trailer / gear), and $30,000 (transitional expenses).
When are you leaving on your adventure?
Once you know how much money you need to save to fully fund your adventure, then you need to calculate how much you need to save each month to build a travel nut sufficiently large to fund the adventure, provided you pulled it off on cash alone.
The first step in determining your savings rate is determining your departure date.
In our example, we’re setting a departure date seven years out, giving us seven years for working, saving, and investing.
Your timetable may be different. Is there a particular departure date you have in mind?
If not, then set one, even if it means going to your calendar and setting a date about seven years out. By setting a date, you’re already one big step closer to departure.
You can always modify the date as your life progresses, including pulling it forward. However, without a date, people tend to drift into endless planning activities or lose momentum. The adventure travel dream could be delayed, or worse yet, never occur at all.
Once you set a start date, this gives you one of the factors needed to calculate the savings rate needed to fund the adventure travel kitty over time, which makes the adventure dream more tangible.
Calculating Your Savings Rate
We need to figure out how much money we need to save per month to fully fund our adventure.
In our example, we need to save a total of $98,000 over seven years (84 months).
Dividing $98,000 by 84 months, we calculate we would need to save $1,166.67 per month (our savings rate) to reach our savings goal if we’re starting with $0 in savings dedicated to the trip and assume we’ll fund the entire adventure in cash.
However, just because the Adventure Possible life is built around the 7 years working and 1 year adventure model, it doesn’t mean it has to be. In the table below, we show a breakdown of different savings rates if we try to bump up our departure date.
| Years to Save | Required Savings per Month to Reach Goal |
| 7 | $1,166.67 |
| 6 | $1,361.11 |
| 5 | $1,633.33 |
| 4 | $2,041.67 |
| 3 | $2,722.22 |
| 2 | $4,083.33 |
| 1 | $8,166.67 |
Fortunately for our family, we weren’t starting at $0. We had been regular savers, and so we were on a good financial path to realize our adventure travel goals once we set them.
In your situation, perhaps you’re starting at $0, but that shouldn’t discourage you.
At this point, you have a grasp of your currently monthly expenses. You’ve calculated your anticipated monthly budget for adventure travel. And now, you can calculate the amount of time it will take you to save up the amount of money to realize the adventure.
This should stoke your excitement. None of this should dishearten you, even if the time and dollars seem at first unattainable.
You’re beginning to shine light on a path that will help you realize your adventure travel dream.
If the money or time table seems unreasonable, then you can start pulling and pushing on different variables to make the plans more reasonable.
