One of the first excuses that can squash your dream trip from ever happening is, “It’s too expensive. I need to work more first to get more $$$.” Sure, traveling is expensive. And it will be harder for some to pay for it than others.

But there’s always a cost to follow your dream. It usually takes some risk and planning. I’ve found the most important decisions start way before you plan itineraries or pick out locations.

Now before you get all spazzy and decide this is going to be a boring article about budgets and not buying Starbucks lattes, you're wrong.

Well, actually you're mostly right. But I'll try not to make it boring.

The decisions we made BEFORE the trip made it possible to GO on the trip. Thailand was possible because Elisabeth and I set ourselves up to travel by living within our means. Let me share the 6 basic finance principles we live by that enabled us to have sufficient funds for our 30-day trip of a lifetime:

1. Avoiding debt like a Jennifer Lopez movie.

We hate debt. Like seriously. Sometimes the Bible has some really good things to say, and I believe what it says about debt. I think God has blessed our efforts to stay away from debt.

Debt is like a shackle around your ankle. It makes it very difficult to do what you want and have the freedom to just pack up and go somewhere. We've avoided a few debt pitfalls that trap a lot of young professionals:

Education

I've only been in debt once in my life: I took out a $20,000 loan for graduate school for an MBA degree, which generally has immediate payoff. (According to The National Association of Colleges and Employers, first-year MBA graduates’ salaries average between $50,000 and $75,000–with more than 40% earning $75,000 and up.) This loan annoyed me so much I paid it back in less than 2 years despite a very modest salary with a non-profit.
It’s no longer true that earning a college degree (even from a “good” school) is worth whatever the cost. IMHO, it’s a bad idea to go more than $5,000-$8,000 in debt per year for undergraduate school unless you're going into a very lucrative career (i.e. nursing, engineering). This may sound unrealistic, but it’s not if you work hard and make wise choices about where you go to school.

Automobiles

I made one stupid car purchase when I was 18 (a sports car that broke down and became useless immediately after buying). But that $2,500 mistake taught me a valuable lesson: cars suck, and they steal your money. I've had several jobs selling new and used cars, and I've seen the ridiculous mistakes people make after becoming enamored with an automobile.

I almost cried once after a man came in trying to trade in a brand new Ford Mustang. It only had 1,500 miles on it and, boy, did the paint sparkle when he drove up on that sunny day. But he couldn't afford the $500+ monthly payments on the car. He owed over $32,000 on it, but now it had a trade-in value of only $18,000. The hopelessness in his eyes was depressing. I learned that cars only make you poorer.

I've never had a car payment, and I never will. There are so many other things I'd rather have, do, or give to right now than drive an expensive car.

I’m not against expensive cars, but I'm aware enough to know most people can't afford them proper. And many young professionals can’t, either. (Well, I actually could afford one, but then we wouldn't be able to take a 30-day trip to an exotic location. It’s really about priorities.)

While every situation is different, I don't suggest spending more than 20-25% of your gross annual income on a car. Forget how much the monthly payment is; only people shopping out of their league ask that question.

One other strategy is to only have one car. This isn't always possible, but it’s a big cost saver. Our apartment is close enough to my job that I can walk to work. This eliminates the need for a second car for my wife. After we were married, we sold Elisabeth’s nicer car (at a small loss) because it saves thousands a year on gas, repairs, and insurance.

Credit cards

I’m not against credit cards. I actually think saying credit cards are bad is simplistic and untrue. Personal finance gurus like Dave Ramsey say they're evil because he thinks you're not disciplined or smart enough to use a credit card wisely. If you look at the national stats, most people aren’t. But there are a lot of benefits for savvy usage.
When I signed up for my first credit card over 7 years ago, it felt so weird because I had been told they were evil. To protect myself, I created one main rule: The first month I pay a penny for use of a credit card, I destroy all of them. Paying interest on credit cards is a fool’s game. My credit card bills are automatically paid each month out of my checking account, so I don't even worry about forgetting. By using credit cards, I get 1-5% cashback on everything I buy. I've received checks totaling hundreds of dollars because of this. I've never paid an annual fee or a penny of interest in over 7 years of using credit cards.

But let me emphasize: if you’re not responsible enough to follow the rule I created (or if you've already racked up credit card debt), then don't bother. It’s not worth it. You'll pay more in annual fees and interest than you'll ever receive in bonuses. And it will keep you from the freedom necessary to follow your dream.

Using cards also has the added benefit of helping me track where my money is spent by using Mint.com. And without getting into too much detail, they are also safer than debit cards in cases of theft or fraud.

Please notice that I didn't list “building your credit score” as a good reason to use a credit card. The mythical “credit score” has been misunderstood and given way too much importance in mainstream personal finance. I've even heard of people purposely keeping a balance as to somehow increase their credit score. This is not true and is a poor reason to use a credit card. Like I said, I've never paid a penny to use credit cards and I've developed excellent credit (750+, which is top tier). If you're concerned about buying a house in the future, banks will look at a lot more than some abstract, calculated number to decide how to structure your mortgage.

2. Eliminating recurring monthly expenses.

Elisabeth and I possess a really strong aversion to monthly charges. We've avoided services like Netflix, Spotify, and cable TV, and I waited about 3 years before I could bring myself to pay the $30/month for internet for the iPhone (and it still gives me night sweats). With no car payment, student loan payment, or credit card balances to worry about, we have a lot of freedom and peace.

3. Telling our dollars where to go

Most people think of budgeting as this huge chore. I actually enjoy it. I lick my lips at the thought of a meeting with my wife around the New Year to evaluate our spending and plan for the next year. (Mmmmmmm, I'm getting antsy just daydreaming about it.)

Obviously, some of this is personality and you can't help it that I'm weird like that. But you gotta stop thinking about a budget as this bondage that wants to ruin your fun.

A budget is a way to prioritize your life. It’s you telling the future dollars you'll earn what their purpose is so that you can accomplish what’s important to you.

There are all sorts of systems to do this: some involve taking cash out of envelopes, and others filling out a complicated spreadsheet. My thoughts on this:

1. There is definitely proven evidence that you spend less forking over cold, hard cash than when using plastic. But taking money out of envelopes seems just too old school for me, not to mention all the work of putting cash in the envelopes each month and counting what’s left at the end of the month. Count me out. Besides, this eliminates the benefits of using credit cards, as listed above.
2. Any system that requires me to fill out something with a pen or pencil is wrong. Period. (You'd be surprised how many “systems” still involved photocopying worksheets. No thanks, Grandpa.) I want a system that works with my digital lifestyle.

At the end of the day, the budget system you should use if the one that you'll use. My preferred system is to use Mint.com, an online service that syncs with all of your bank accounts, credit cards, and investment accounts. You can create a budget on the website, and as you categorize your expenditures, you get immediate feedback on how it compares to your budget. Plus, the iPhone and Android apps are great.

If you’re not doing anything to keep track of you money, do yourself a favor and sign up for Mint.com today. You won't regret it.

4. Pay God & give first

I strongly believe in what Jesus said, “It is more blessed to give than to receive.” If you're a Christian, I'd challenge you to give over 10% of your gross income away (to your home church and beyond). Even if you don't believe in tithing, I think you should go above and beyond what the law was. (I’ll try to write more about this in another post). You cannot out-give God. He loves cheerful givers, and He honors generosity.

But you don't have to follow Christ to understand that giving money away to bless others feels great. I'd challenge anyone to give away at least 10% of their income. Do it for 3 months. It’s a powerful medicine to prevent the materialism and selfishness that plagues America.

5. Make saving automatic

If you're planning for a big trip, you're going to have to save some money. I’ve found the key for me is to pay myself automatically because:

• I forget.
• I'd rather buy a new MacBook Pro (or whatever Jony Ive says I should buy).
• Life gets in the way and my money mysteriously evaporates.

I have certain amounts deducted from my checking account automatically to a Vanguard brokerage account each month. That way, I don't have to worry about having enough left over to save for the trip or retirement. I already took care of the important stuff before I saw that great deal on any shiny object with an Apple logo.

6. We’re a team, not two individuals

Elisabeth and I are a team in every sense of the word in our finances. We fight together, struggle together, and succeed together. This means we have joint accounts, and our income is pooled into one pot.

I only recommend this for married couples, not cohabitating couples. Because we've decided divorce is not a word in our vocabulary, we don’t worry about splitting assets if things don't work out.

By treating our money as OUR money, we force ourselves to work together and communicate regularly about finances.

This does NOT mean we don’t each receive money that we can do what we want with (like buy clothes or go out with our friends). But it avoids all sorts of problems stemming from someone thinking, “Hey…I earned this. This is MY money, and you're not spending it right.”

There are none of the hidden surprises that stem from maintaining separate accounts. It’s easier to share responsibility for the finances, and there’s no extra administrative work to try to split the bills. I suppose every marriage is different and others may disagree, but we can't imagine a situation having to figure out who has paid for which thing, for how much, and then somehow trying to make it “even” at the end.