Probably one of the most frequently asked questions I get is “how are you going to afford to travel the world?”. Well buckle in, because this is my first post of many dedicated to all things finance, including saving money, financial tips, budgeting, being debt free and whatever else comes to mind. I have a few pointers that can help make your dreams of traveling into a reality (and to be honest, just all around good financial tips for life). Personal Finance Software The first step is to take an honest look at your financial situation. It’s okay to be in debt, most of us have at least some of it, you just need to have a plan to manage it. The first step is to get on Quicken or Mint. These programs allow you to track your income and expenses as frequently as you would like (monthly, weekly, etc.). This way, you'll have a much clearer financial picture. Personally, I prefer Quicken because of its ability to project cash balances. Once you enter all of your bank accounts and credit cards, you should be able to see where your money is going have much more control over where you want it to go. One piece of advice when creating your budget, treat your budget like a diet, if you deprive yourself of the things you like most, you’ll never stick to it. As much as we know going out to eat or for drinks (especially drinks) is expensive, it’s not realistic to think you can go from doing it 4 nights a week to none. Instead, trim the things you don’t care about as much first, and go from there. There’s also no shame in becoming thrifty with how you spend your money. Happy Hours exist for a reason! Managing Interest The next best way to put more cash in your pocket (or in your travel fund) every month is to minimize or stop paying interest altogether. Whether you owe on one card or five, you want to try to pay as little interest on it as possible. A great way to achieve this is by taking out a debt consolidation loan, preferably from a local credit union. In my experience, credit unions can offer loans at rates below 8% for up to (5) years! While you can make your loan terms 5 years, I recommend sticking to below 3 years. And make sure you add the monthly bill to your Quicken or Mint account. The most important part here….. Don’t get yourself buried under credit card debt again, make sure you pay off your credit card balance in full every month. A great way to achieve this is by taking out a debt consolidation loan, preferably from a local credit union. In my experience, credit unions can offer loans at rates below 8% for up to (5) years! While you can make your loan terms 5 years, I recommend staying below 3 years. And make sure you add the monthly bill to your Quicken or Mint account. The most important part here….. Don’t get yourself buried under credit card debt again, make sure you pay off your credit card balance in full every month. If you don’t have the discipline to stop yourself from overspending yet, just cut up the cards and pay for everything with cash. You may not be maximizing travel points, but your future self will thank you. A loan is a great way to payoff your debt in a fixed period without it being too much of a burden. A bonus is that it's significantly lower than credit card interest with an APR of 15-20%. Balance Transfers If you think you can pay off your debt in 12-15 months, or if you don’t get approved for a debt consolidation loan, the next option is to take advantage of promotional balance transfer offers on another card you have. Many credit cards offer 0% balance transfer promotions for 12 - 15 months with a 3-5% transaction fee. The transaction fee is charged upfront (usually tacked on to the balance transfer), but if you think about it as “interest” you’re paying way less than your credit card charges you for interest. If you don’t have enough available, you can always call to request a line of credit increase. Like I mentioned earlier, you have to stay disciplined after transferring, so you don’t find yourself in further debt. Time to Eliminate Debt If none of the above is an option for you, you’re going to have to bite the bullet and pay interest. There are a few methods financial experts suggest with fancy names, but I’ll keep things simple. If crossing things off your list motivates you, then use all of your available funds to pay off the lowest balance credit card first while making minimum payments on your other cards. Once you’ve paid off that card, pat yourself on the back because you’re making moves, and start paying down the next lowest balance card. Repeat this cycle until you are debt free! Another method to paying down debt (my preferred) is to use your available funds to pay down the credit card with the highest interest rate first. Once that card is paid off, move on to the next highest interest rate card and repeat until you’ve made debt your bitch. Check your Credit Score It’s worth mentioning that as you pay down your credit cards, your credit score should go up. I have been using Credit Karma for years to track my credit score with no complains. The best part is it’s free! After some time, about 6 months, you can (and should) apply for another debt consolidation loan. Unless of course you’re almost debt free. This stuff may not be the most exciting (unless you’re me), but it’s crucial if you want to travel (or really just live) a lower stressed life. Getting a firm grasp on your debt is empowering. That doesn’t mean you have to live debt free, just make sure you’re not crippling your personal cash flow with debt.