How to travel debt-free

Work, travel, save, repeat.

If you’ve been bitten by the travel bug, travelling as much as you can, as far as you can, and as long as you can, often depends on your budget. A holiday abroad will tug on your purse strings with flights, food and accommodation to cover. But hopeful explorers don’t need to miss out or rack up mountains of debt in the booking process. It is 100% possible to travel debt-free – and it isn't going to be much of a challenge either!

Here’s how it’s done.

Open a holiday fund

In the same way that parents prioritise saving for their child’s education over an extended period, they can do the same for travel – and the earlier they start, the better.

In the same way that parents prioritise saving for their child’s education over an extended period, they can do the same for travel – and the earlier they start, the better. “If you begin saving early enough, you will be amazed at how much is accumulated in a relatively short space of time by simply setting aside a specific rand amount on either a weekly or monthly basis,” says Dylan Carreira-Miguel, a financial advisor at Simplicity Financial, an independent financial consultancy company based in Johannesburg. “The problem is that you could face hidden charges and tax if you go the traditional unit trust investment route,” he warns.

But how do you avoid that and maximise your investment? The answer lies in a tax-free savings/investment account.

“In South Africa, you can contribute R33 000 a year to your tax-free account and take out your gains without paying a cent in tax in the process,” explains Carreira-Miguel.

It is also crucial to make it difficult to dip into your holiday savings when unexpected costs associated with everyday life start to pop up. While taking a chunk out of your blossoming holiday fund might provide relief from the financial strain at one time, it will set your travel plans back. That is why many travellers choose a notice account for their holiday fund. That type of savings plan requires account holders to give notice (usually between seven and 31 days) before they can access those funds. In some cases, account holders won’t be able to access the full amount until a specified date.

Unless, of course, there is a risk of falling into debt while trying to make your day-to-day ends meet, it is important to continue making regular contributions to see your fund grow. Carreira-Miguel suggests: “Setting up a debit order, rather than making a manual contribution to one’s holiday fund each month, is the ultimate way to keep building up those savings even when money is tight.”


For those who have yet to experience the benefits of stokvel membership, a stokvel is essentially a group savings account made up of various members (usually more than 12) to save towards a common goal and contribute to a specified amount paid into a shared account each month.

“A travel stokvel is a great way to generate funds for the purpose of going on a memorable holiday without having to incur debt,” says Lance Nkwe, Flight Centre Travel Group's business leader of emerging markets. And if a travel stokvel sounds like a possible solution for your own travel goals, consider signing up for Flight Centre’s recently launched stokvel travel service.

“Stokvels also open up the prospect of travel to new markets that otherwise may not have been able to afford a holiday,” says Nkwe. “Anyone can create and join a Flight Centre stokvel. There is no credit check involved and no difficult approval processes to follow when looking to access the funds. All that it takes is R500 to get started. You also have the ability to select a specific amount as each member’s monthly contribution.”

Based on each stokvel team’s contribution, members will receive information about an exclusive selection of Flight Centre holidays, hand-picked just for them.

Utilise investment platforms

Soon-to-be holidaymakers can also avoid travel-related debt by saving up for their next trip using various investment platforms. Gavin Oster, chief executive officer of Simplicity Financial, says that he and his clients swear by EasyEquities. “It is a wonderful investment platform that provides the opportunity to invest in shares, tax-free accounts and ETFs at a fraction of the usual cost and allows investors from all backgrounds to make use of their biggest aid: compound interest.”

Why is compound interest so beneficial to people looking to save money for travel? “Compound interest speeds up the growth of funds drastically when compared to simple interest. This is because it represents the amount that an investor earns from their initial investment in addition to the interest they earn, which is added on top of the interest that has already been accrued,” explains Oster.

The bottom line

Ultimately, travelling debt-free is all about starting to save as early as you can, contributing a set amount each week or month, and finding a plan that ensures your travel investment grows as quickly as possible.

With a bit of patience and perseverance, nothing is stopping you from jetting off to a new destination on your bucket list without falling into the dreaded debt trap. Plus, without the worry of finances back at home clouding your holiday, you will truly be able to enjoy every experience to the fullest!

 Writer - Bianca Delport