Times are tough right now due to my recent property investment and cash injections into the company. That being said, I still would like to travel at least once a year to take a break. It is also a good way to invigorate my marriage life.

The challenge is how to travel with a $500 budget for a person staying in Singapore. It can be solved via a 2 step solution:

• Select a cheaper location
• Optimize your travel budget

#1: Select cheaper location

The travel location determines everything. If you are thinking about getting to Europe on a $500 budget, you can almost forget about it as the airfare alone will cost you more. The only viable way is if you can get your hands on a lot of air miles. This is something I will cover later on.

Personally I prefer traveling in Asia. Not only is it cheaper but I liked the vibrancy and the warmth of the people. Nothing against Europeans or Americans but they can’t meet Asia for hospitality.

#2: Optimize travel budget

The first thing to do in maximising your travel budget is to see where the money has been spent. Typically, this is how a travel budget will look something like this:

• Airfare: 40%
• Accommodation: 30%
• Food: 20%
• Everything else: 10%

On a optimization basis, if I can get the airfare down, it will gives me the biggest reduction in terms of travel cost.  There are a couple of ways to do this:

#2.1: Earn more air miles with the right credit card

The easiest way to earn more air miles is to use the right credit card. My preferred airline is Singapore airlines. In this case, the UOB prvi miles platinum American express card gives the best conversion. The rate is SGD1: 1.6 air miles. This means I can get a free ticket to Europe (which costs around 59k Krish flyer points after the 15% discount given for online booking) if I spent around $36k using the card. If I divide that amount by 2 years, this means I only need to charge $18k to the card before I can get that free air ticket.

#2.2: Use Flightfox to get the cheapest air ticket

Flight Fox is a new service that leverages on expert travelers to help you find the cheapest air ticket. This group of experts are no ordinarily travelers. They are hard core folks who spend a huge time analyzing the different airlines and their routes to get the cheapest flight possible. To say that this is their passion is not an understatement.

How this service works is simple. You launch a contest and entered your destinations as well as the lowest air ticket price that you can find. The experts will then enter the contest and try to beat your lowest price. If that is achieved, you will get the lower price ticket + an admin fee for the contest.

#2.3: Subscribe to email promotions from all airlines

This is the easiest way for you to know what are currently the best deals offered by the different airlines. It is amazing the discounts that you might be able to receive. For any serious budget traveler, doing this is a must.

Once you have gotten your air ticket cost down to the lowest possible (free is even better!), then it is time to work on your accommodation budget. There are a lot of option when it comes to this category. You can go as cheap as possible, staying in shared hostels or b&b. There is a new marketplace for homestays called AirBnB in case you are not aware of it. Anyway, the choice is yours to make.

Personally, I never prefer making myself uncomfortable with my accommodation. This is a vacation, not a ‘suffer while traveling’ camp. That is why Asian locations suit me the most as their hotels are good and cheap. In Europe, a normal 4 star hotel will set you back by at least SGD100+ per night. If you have only SGD500 to spend, this is not really feasible.

Finally, to save on your food allowance, try home cooking if your accommodation allows it. If not, then use trip advisor to find some really local cheap places to eat. Never ever eat at places that are targeting tourists. Not only do the food taste horrible but the prices are unlikely to the lowest.

Have a great trip!