The Tricks you need to know when travelling.
Most of us travel on a budget. All that differs is the size of the budget and how much room it has to stretch. The big work of the budget is done before you leave home. On the road it is just a matter of keeping your hard earned $ safe and ensuring you work out how to fall within your money guidelines.
Don’t let lack of Money be the excuse:
Make a Budget: It is very easy to stay within budget if you are realistic about where you want to spend your money. Know if you want good food, adventure tours or AC rooms and when you have done your homework you will be able to make a realistic budget. Keep a track of what you spend, or it will get out of control. There will be up days and down days but across a month you should be OK. We have a spreadsheet (of course we do- we are teachers) and each day put in what we spend. We tally up monthly and adjust the next month as needed so that over the year we are on budget. Saying that however, don’t be afraid to blow the budget on those once in a lifetime experiences: We do say budget, and yes it matters but do not let it spoil your experience. What matters is having the capacity to do it without breaking the bank. Have a look at my post “Making a Travel Budget”.
A long-term trip or “life” on the road is possible: The first thing to realise is that you don’t need much money to “live” on the road or travel long term, so the income you need is not that great. We travel, with cruises and apartments on the beach when we want for under $100US a day for 2 people- that is we budget around $30,000 US a year. I would consider this low mid budget. It is possible to live on less, but we now have private rooms and bathrooms and rent cars so the day of being in the low budget range are probably gone. You do have to do some serious planning to make lower budget travel happen. We are finally at the point where we have income from our home that we rent out and that determines our budget. But in the early days we had to find other ways to fund our travelling- Have a look at the post on “Earning a living on the Road”.
Saving your cash before you leave: It is totally possible to downsize even on a low income. There is so much you can save on if you are motivated enough. We all have too much stuff and need to live with less- so it’s good for the soul and the environment! What can you sell? Do you need Netflix? How many coffee’s and take away do you have each week? I was a teacher and Gary was in an admin job and we managed to save enough to fund a year on the road in just 6 months at home. Even with a family, a mortgage and only one wage we managed to backpack with the children overseas ever holiday and even take 12 months around the world.
Learn how to find budget great value ways to make your dollar go further: Obviously you will need to travel in a style that matches your budget. If you are on a low to middle budget, you will have to learn a few tricks of the “trade”. Take a look at the post – “Long term travel on a Budget” .
Getting your money when you need it- Banks , Cards and ATMs:
There are so many options today to make you bank work for you and make sure that you do not end up with unexpected charges. You will have to do all your homework and get it all set up while you are at home (and before you quit you well paid job).
Get a bank account and debit card for ATM use that charges no international transaction fees. ATMs offer the best exchange rate after credit cards. We use ING and have a debit card with them. HSBC and CITI bank have similar cards. They charge nothing and reimburse the fees charged by the overseas banks. Mozo debit card comparison table shows a number of options. The Mobile Banking system is changing very quickly with new options on the market all the time. N26 started in Europe and is excellent if you live in the Euro zone. It has reached to UK and soon the USA (with not as good benefits). Check them out.
Get several credit cards that charge no international transaction fees- and use them as your first way to pay for things. Credit card companies get the best rates. Using a credit card will get you an exchange rate closest to the official interbank currency rate so use ATM only when you need to. The problem is lots of places don’t take credit card so you will need cash. And, you have to have the RIGHT credit card. You must have on that has NO international transaction fees. These initially became popular as travel cards but are now very useful at home as many online purchases billed from overseas attract an international transaction fee without you knowing it. We have discovered that VISA cards rarely waive international transaction fees and that MASTERCARD are the best. We have a Bank West and a 28 degree.
Find a credit card that also includes travel insurance or points. For us the zero transaction fees come first. It is hard to find one that has zero fees , travel insurance and points (let me know if you find one). Travel insurance is common as a benefit and allows great cover (you don’t need anything more) if you spend $500 on the trip on your card before you leave and have a ticket home. This works for us on trips under 6 months because our Bank West allows single trips of up to 6 months (most only allow 90 days). Collecting points works really well when you are at home but most card with points have transaction fees so we have worked out for us that the cost of transaction fees costs more than the points we would get. At home we put everything on our Virgin card, pay it off every month and the points grow.
Always travel with 2-3 cards and accounts of different types. If one is lost, doesn’t work in that country, gets scammed or blocked etc- you are covered. Don’t put all your eggs in one basket.
Only use ATMs at banks and in the daytime (ideally those with little rooms off the street and a guard). Skimming from your account is common . Check your balance before and after. Make sure you can go immediately into a bank. The exchange rate is lower in the small, out of the way (hotels etc) ATM’s- so use a bank.
Research the banks in the country you are visiting and find out what commission they charge. This is important if you don’t have a card free of transaction fees. We then choose one that we try to use while we are there. There can be a massive difference in what they charge. Your bank at home may all be set up to have no international transaction fees, but the local bank can charge up to $10 a transaction.
Exchange only the cash you need before you leave. Money exchange offices offer the worst rates (lower than Credit cards and ATM withdrawals). The rate for cash overseas these days is in many countries WORSE that paying an ATM withdrawal fee. So, don’t just assume changing cash overseas will save you money. Exchanging money before you leave usually requires a commission or a flat fee which is usually shown up front. If they say there is no commission, it’s because their exchange rate is lower (they show you their rate which is often well below the mid-market rate). They are a business so WILL charge you somehow and they do their best to hide their rates. So do your sums. We shop around at home and take only a small amount of cash. We then do $500 withdrawals at ATM’s in the country and use our transaction free credit card for everything that we can.
If you transfer money overseas look carefully: it is fraught with hidden charges. There is usually a fee to send and a fee to receive. Transfer wise is the most transparent with 96% of their charges clear up front (Revolut looks Ok as well). Western Union is the worst with 10% of their charges clear up front and 90% hidden in the form of lower rates etc. Pay Pal isn’t much better. Monito allows you to compare rates and hopefully show you hidden charges.
Find out if you bank has a foreign partner so that they waive fees at their end, and you can use their services for free. The Global ATM Alliance is a group of banks around the world that have got together so that you can use their ATM’s to avoid fees. The banks part of this alliance are Bank of America, Barclays, BNP Paribas, Banca Nazionale del Lavoro, Deutsche Bank, Scotiabank and Westpac. Some of these banks operate standard personal bank accounts in multiple countries, too. We don’t use these as we find them too complicated to work out where you can use them, and you can get caught with a$5 fee if you use the wrong bank. We don’t have fees with our ING card so don’t need this.
Know the correct exchange rate: This makes you less likely to be completely ripped off.
Avoid “Bureaux de change”, money changers and the airport exchange: The official ones charge up to 16 %. Travelex is the worst! Money changers are often a total scam. Ideally have some local currency when you arrive to avoid an emergency. We arrived in Uzbekistan where you can’t get currency outside the country and we needed to get into a taxi, but this taxi took only local currency. The local money changer who just happened to be waiting gave us a rate 50% less but we had no choice. If you end up with a shady money changer, make sure to count the money you receive twice, and check for counterfeit bills before you hand over your money .
Always know the exchange rate for the country you are traveling to.
Opt for the local currency option at the ATM. While withdrawing cash or paying with your card, always pay in the local currency not your home currency- the rate is better at your home bank.
Check Travel Money Cards carefully : I’ m sorry but we have never found these to be convenient, reliable or that cost effective. You have to weigh up the charges that don’t mention. Some have ATM fees, most have load and re-load fees and the vast majority have at the worst a currency conversion fee and at the best a really bad exchange rate. Agents make a commission when selling you one so just do your sums and shop around.
Keep your money safe and watching for scams:
Fraud is now a reality and you need to do what you can to protect yourself for that, scams and outright rip-offs!
Check Credit card receipts and save them until you’ve seen the correct amount on your statement You will spot a scam. Look at the number of zeros.
Don’t pay in advance unless you have to: Agree on a price and avoid deposits or pay in advance requests for cars, bikes, tours, accommodation etc. If there is a problem, you have some bargain power.
Check your change: Swapping notes is common. So, check before you leave. Watch for torn or old notes as the next person may not take them.
Keep only your daily money in a purse or top pocket: If possible, leave the rest in a safe.
Never let your credit cards leave you sight. Don’t let them take it away to swipe. Multiple swiping is common. Call the company immediately. Get a card security to stop them scanning your card as you pass by.
Make a Fake Wallet: We have only used a fake wallet with $20 and on old licence in it, in South America once. The idea is that you give it to the mugger if that happens.
Hide your cash: Find your own personal secret hiding place (inside a makeup bottle, inside a bra – you get the idea). Just don’t forget where it is, like I did!
Keep an emergency cash stash and copy of Passport: $200 US in small notes is a MUST for emergencies.
Avoid Public Computers: It is easy for them to be able to track and copy all your bank details. Consider a password manager like Last Pass to keep passwords safe.
Tell your bank where you are: This is easy with most banks as there is an alert system that you can do online or in the App.
Carry your money in a safe place: When you travel keep all your important documents and most of your money, in a money-belt or similar. When you are in a hotel trust the safe. If you don’t trust the safe you probably should not be at the hotel!
So, I hope these tips are useful for you! Good luck and make sure your hard earned dollars go as far as they can.
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