Recently, on an episode of my radio show, “Your Money,” I spoke with Matt Kepnes, a travel expert and New York Times best-selling author of How to Travel the World on $50 a Day. Matt is also the founder of the budget travel site, Nomadic Matt, which provides steps that will save you time and money and have you traveling sooner.
A trip to Thailand in 2005 changed Matt’s life. He met five backpackers who were living his dream of traveling full-time. After that trip, he flew home, finished his MBA and quit his cubicle job at a hospital.
“Life had been frozen while I was out growing,” he said. “I didn’t like the idea that I came back to do the same thing.”
In July 2006, Matt set out on an adventure around the world that continues to this day. From cooking his own food to flying on budget airlines, Matt is living proof that you don’t have to be rich to travel. “Traveling on the cheap is easier today, thanks to the power of the Internet,” he said. “There’s no excuse not to get out there and explore!”
Below are some tips he has learned along the way:
Make a budget and stick to it. It’s really difficult to find ways to save money if you don’t know where you’re spending your money. “In this day and age, it’s easy to rack up big credit card bills,” he said. “Look at your spending for two weeks and see what can be easily cut. Can you save even $10 a day? Then it becomes a lot easier and more manageable.”
It’s not too late to travel this summer. So now that it’s mid-June, has the window passed on that summer vacation or did you have to book the trip several months in advance? It’s never too late to travel, Matt said. Airlines run complex pricing algorithms based on demand, which is high over the summer. While your best booking window is two to three months earlier, that does not mean you can’t find last minute deals through sites like The Flight Deal and Secretflying.com.
Another way to save money is to go somewhere less popular during the warmer months. “If everyone’s going to Europe, Central America or Hawaii, go to the Caribbean!" Matt said. "It may be hot and muggy, but you’re next to the ocean. Australia is fairly warm even though its winter and not at the height of tourist season.”
Purchase travel insurance. Many financial planners say that travel insurance is a waste of money. That can be true if you purchase it through a travel agency, Matt said, but you can get a better deal through sites like WorldNomads or InsureMyTrip. “You buy insurance for your home and your car, so get it for your trip,” he said. “I’ve had to use it a number of times and so have my friends. I’ve heard people say it’s a waste of money and then they ended up paying out of pocket. For a small amount of money ($4 - $5 a day), the peace of mind is amazing.”
Lessons Learned: So what are some of the biggest mistakes people make when it comes to the big three – flying, lodging and meals? The number one mistake is inflexibility, Matt said. “You need to be flexible with either the time or the place. If you’re rigid, you’re stuck with any flight price you get. If you’re flexible, you can move days or find a less expensive nearby destination.”
When it comes to sleeping, hotels tend to be overpriced unless you use loyalty points or visit sites like Booking.com for more affordable prices. Matt prefers to stay at the local bed & breakfast of the town he’s visiting. “You get to stay in the more residential parts of the city and your host can give you the ins and outs and secrets of your destination.”
For meals, your best bet is to do what you do back home -- cook most of your meals and only occasionally eat out. “Use your local market to see what people are eating at that destination,” Matt said. “Eat out during lunch and dinner specials. Use apps like Yelp and Foursquare. It will tell you what’s hot and what’s cheap at the same time.”
Kent Smetters is the Boettner Professor of Business Economics and Public Policy and faculty director of the Penn Wharton Public Policy Initiative at the Wharton School of the University of Pennsylvania.