We’ve now updated this post with much more detail. See How to Manage Money When Travelling.
Managing your money when you are travelling is essential if you want to maximise your time on the road and avoid getting stuck with your financial pants down. Here are our tips for managing your finances on the road.
1) Create a realistic budget – See our post on How to Budget for Long Term Travel.
2) Find a bank account with low/no international fees – Most of the time we use ATM debit cards to withdraw money from our bank account wherever we are in the world. Many banks charge high fees for doing this though, so look for a bank with no or low international withdrawal fees. In the UK the best option is Nationwide Building Society. They are free to use in Europe but now charge 1% for the rest of the world. This is still better than the 3% other banks charge. In the US I have heard Schwab and Capital One do fee free cards.
3) Bring back up debit and credit cards – Your debit card will be your main source of cash, so make sure you bring a spare in case you lose your main one. In Sri Lanka our debit card details were stolen so our bank had to cancel the card. Luckily we had a back up card (it’s a joint account) so we weren’t stuck without access to our money. We also bring Visa and Mastercard credit cards for emergencies and in case we can only find ATM machines on the Mastercard (not Visa) network.
4) Register for online banking – This is essential so that you can log in and check your balance while you are abroad.
5) Link your current account to your savings account – We keep most of our money in high interest savings accounts and transfer enough for a month’s spending to our main current account with debit card. This also provides a little extra security – if our current accounts get emptied, at least we won’t have lost everything.
6) Bring some cash – In most places US dollars are the best source of cash. Bring some for times when you can’t find an ATM machine. Keep a small amount hidden in your bag separate from your main stash for emergencies. We also bring a small amount of traveller’s cheques, although most people don’t bother with them anymore. We think you can never have too many backups.
7) Use a money belt – We use a money belt under our clothes to carry passport, cards and cash when we are travelling between destinations. This way if your bag is stolen you don’t lose everything.
8 ) Understand the local exchange rate – To make sure you don’t get ripped off or take the wrong amount out of the ATM machine, it’s important to get to grips with the local exchange rate before you reach your destination. I print out Oanda cheat sheets and stick them in my journal, or you can carry them in your wallet. Carrying a pocket calculator is a good idea if you aren’t travelling with a phone or laptop that has one.
9) Keep track of your spending – Writing down everything you spend is the best way to keep complete control. If you can’t be bothered with that at least keep track of the ATM withdrawals you make and the cash you change. I used to write our spending down in the back of my journal, but now that we have a laptop we keep a spreadsheet. You need to know whether you are sticking to your budget, and if you aren’t look for areas to save in.
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