Dealing with money on the road can be a real pain in the ass.
You want to have enough on hand at all times, but not too much, because then you worry about it being stolen out of your bag or back pocket. If your journey is taking you along the trail well traveled, from city to city, and not far off of the hostel row, then the odds are good that you’ll have no problems. ATMs are plentiful and as long as you’ve got that ubiquitous four digit numeric code for your PIN, you’ll have constant access to your money.
But what happens when you “go local,” or the machines breakdown, or your card gets stolen, or the numbers skimmed at a bugged ATM? Then what?
It’s important to have contingency plans in place and access to your money in more than one way. Instead of keeping all of your eggs in one basket, consider dividing your money between several accounts, even several banks. We have ours split between a local, brick and mortar bank, a completely online bank, E-trade & Paypal in about seven different accounts. We have debit cards on four of those, so there’s never a crisis. When our numbers were skimmed in Guatemala and our account locked down while they figured it out, we carried on with the others. No drama.
Because we have a family, and our worst nightmare is being stuck somewhere with no money and no options, we have layers of contingency that might seem like overkill to some people:
We’ve been laughed at by fellow travelers, but we’ve also been reduced to just the traveler’s cheques when banks have been haywire and ATMs have been jacked. USD is never a bad idea (in some parts of the world, it’s the best way to go!) Having too much money is hardly ever a problem!
Of course storing the spare change in a low key manner is the next issue.
What do you do about money when you travel? Have any great tricks or “secrets” to share?
I sat down and tried to calculate how much money I spent visiting India last year, my way: the balance is ridiculously low. India is a cheap country, yes, but this would not have been possible without a few tricks.
Here is a lowdown on how I managed to spend 110$ for 6 weeks travelling from Kolkata to Delhi in North India, taking it slow, and doing a lot side trips. Hopefully the following suggestions may be useful for someone else!
You are in India, PAY like and Indian
This is a basic rule that applies to all of my trips: I do not want to pay more. If my skin is white, it does not mean I am rich, or stupid. If an Indian pays 10, why do I have to pay 100? A tourist in India has to bear enough of this double-tier pricing when visiting all Indian main sites (more on this next), but seriously, why should I pay 20 rupees when the guy next to me pays 5 for the same auto-rickshaw ride? It is a game, and a damn funny one. Learn the local lingo: pach rupee is five, das is ten. Surprise them. Talk to them in other languages than English as they keep on talking to a clueless you in Hindi. See how much fun it is. Send five, ten, twenty drivers away before you find a honest man, because they do exist, although very rare.
Avoid the inflated tourist attractions’ entry fees
India is the most unfair country in the world when it comes to double tier pricing. A Taj Mahal ticket which costs you a whooping 750 rupees, costs an Indian 20. Yes, 20 only. It is just a little over 300% more. Because they think we are rich, and we deserve to pay. Fine, let’s pay more. But do not pay for everything, be wise. The Sun Temple in Konark, Orissa, for example: just walk around it. It will not give you the perfect visual, but it would save the 200 rupees entry fee. And you will see it even better from the outer enclosure. And whenever they ask you to pay to be able to take pictures, please hide your camera and snatch away as much as you can. (more…)
You’d love to tell your boss you’re taking off – and actually do it.
But then you come back to reality. You’ve got a house you need to pay for. Car payments to make… Pay off those credit cards… Buy new furniture for your living room… And you need to save for retirement. Maybe that trip of a lifetime will never happen after all.
I would venture to guess that most people can take that trip of their dreams if they simply put their mind to it. It’s all a matter of priorities.
Now before you jump all over my back, I want to point out that little word “most” in the previous sentence. I do understand there are people out there who simply can’t take off for one reason or another, but for most, it’s doable. It comes down to priorities.
So how do you do it? How do you manage to save the money for a trip like this? Easy – you make it a priority. I’m not talking about giving the journey lip service – I’m saying you have to decide it really, honestly, truly is your priority. If it’s not, there will be a million other things to spend your money on.
Trim the Fat
I know, I know – you’ve heard this before: eliminate all expenses that aren’t necessary. Maybe you could stop buying that $5 coffee from Starbucks every morning, or carry your lunch rather than going out with the boys. You’ve read all that before.
But I think it comes down to something a bit different. I’m not necessarily saying to cut all that out, but to simply make conscious decisions. Remember – it’s all about priorities and making conscious decisions. Is that $5 coffee more important than your trip? Then, by all means, buy it. Lunch with the boys higher on the priority list than the journey? Then go for it. Just remember to make conscious decisions. Come back again and again to what is truly important in your life and make decisions based on that. (more…)
It’s a well-worn practice the world over: customers and vendors talking price. CNNGo tackled this issue in a post titled How to bargain: the ultimate guide to scoring a deal in the markets of Asia.
Many of the tips will be familiar to experienced vagabonders: shop around, be polite, and be ready to walk away. What makes the article special is the little details about particular destinations. Some examples:
Have you negotiated over a purchase at a market? Please share your stories in the comments.
I recently got an email from Jen and Ted, a pair of Canadian Vagabonding readers who perfectly sum up how, sometimes, the most important thing one must do in order to travel the world long-term is to simply realize that it is possible. Here’s their story, in Jen’s words:
I have been unsure for the past few months how to word this, as this is basically the biggest thank you of my life. Our story is as follows: My husband & I have been married just over 2 years and were (unknowingly) stuck going about the typical life pattern of going to university, working away our young years at professional jobs, and making good money to go on expensive, rushed 2-week vacations a couple of times per year. We both were happy in our positions with good pay, benefits, and pleasant coworkers that made work enjoyable. I am a Emergency Room nurse at a well-reknowned paediatric hospital in Toronto; it is a stressful but rewarding job and I love it immensely. My husband has a great job in programming & software development working on cutting-edge projects and he too enjoys his role. Both are well-paying jobs in the fields we studied in university & we are grateful for these positions.
However…each time we travelled on vacation, it opened up that incredible thirst to see new cultures, to experience life in a different part of the world. It was such a tease. We would jealously meet people in our travels around the world who would be backpacking for a few months or indefinitely. We never considered ourselves capable of being in that category – we assumed those people were special, they had no-strings-attached & we had plenty of strings. They must have had different jobs, different circumstances than us. We thought they were “lucky”. Reading your book opened an entire way of thinking for my husband and I, one that we were both too afraid to even fully believe/feel. It made us realize that luck did not find these people and transport them around the globe. A conscious decision was made to change the course of their life, and they went out and achieved it. They were not just dreamers, but passionate achievers.
So we began to toy with the idea of dropping everything & exploring all of the places we so desperately want to see. Not just see on a crammed, over-priced vacation – see in a way that we experience and live in different places, something more long-term. Initially there was a lot of fear. What will happen if we leave? What about our jobs, our families, our friends? In the end the realization was that the answer was this: nothing. Nothing will happen. Our jobs will carry on without us – we will be swiftly replaced and our absence will soon be forgotten about by the presence of the next employee. The opportunity to return will likely be there and if not we will seek other jobs if need be. Our families? They will continue their day-to-day activities, jobs, and responsibilities. We will miss them immensely but we will continue to keep in touch like we currently do living out of town from them. Our friends? They will also continue with their routines of work, social activities, some maybe commenting that they wish they could do what we were doing. But I know when we return nothing will have changed. But we will have changed. And that is the motivating factor behind all this.
Your book put us in a position where we realized that our life could have passed us by. We could have continued, under societal pressures, working indefinitely, banking in money, saving up for things like a house and a baby – things that would just ground us even more here. I feel like I almost missed the most important thing that could have ever happened to me. And truly, as ridiculous as it may sound, I may have missed that opportunity had I not read your book.
So thanks so much, for giving us the push that we need to seek out our dreams. It’s honestly changed our mentality and way of living. As of today, we have literally sold everything we own. We are moving into a furnished place in 4 days to pay literally half the rent we currently pay for the next 3 months. We are quitting our jobs and have a non-cancellable one-way flight booked for Cartagena, Colombia on January 3, 2013. We are travelling for 6 months, possibly more/indefinitely.
Thank you for writing your book and giving people the courage to live their life in a meaningful way & to pursue their dreams of seeing the big and beautiful world that is at our fingertips.
Jen & Ted
I have been on the road for nine months straight as I write, and I have slowly noticed how I changed my budget habits overtime. Initially, I had a big plan, quite a small budget, and an indicative daily expense limit that would make most people laugh – or faint. I was mostly successful in keeping expenses between 5 and 10 $ a day by travelling in a very cheap region – the Indian subcontinent -, using Couchsurfing or seeking local hospitality as much as I could, sticking only to public transportation and local meals. By strictly adhering to my own rules, I managed to spend 5 and a half months across India, Nepal and Bangladesh and spending about 1000$ for me and my girlfriend together. But I also have to say that the very low price came with another kind of expense: some sort of travel burnout.
After three more months and almost at the end of an Asia to Europe overland trip along the Silk Road, by trying to adhere to the same rules that made my Indian vagabonding highly rewarding, I must admit: I feel that sticking to the planned budget is working less. And it is not because of the different prices of accommodation, food and transportation in different countries, as all of the above can be overcome by the more resourceful on a tight budget. I feel it is because, as I see myself nearer to the end of one year of travel bliss, I am pushed to abandon my strict budget plan, and enjoy things in a more economically relaxed way.
At the beginning, I would never have chosen to have a sporadic breakfast in a café, opting instead for the street food at the market’s stalls. But now, as I stretch the last dollars and I still try to make it within the limits of a tight sum, the whole budget idea is not that important anymore. It may be the prospective of returning, and settling into some new sort of job that is giving more security and allows spending more leisurely. Or it may just be that, after a long time trying to make everything fit into the lowest possible expenditure in order to stay on the road the longest, a traveler just needs to forget about budgeting to feel like there is a change in a daily travel routine. Did you ever have similar feelings?
I stayed away from frequent flyer credit cards for a long time, because I wanted to avoid debt. The other reason was that since I lived in Asia, flights were relatively cheap anyway. Looking back, there were a lot of missed opportunities to earn air miles. Now that I’m back in the States, my situation has changed. Getting outside of North America can easily cost over $1,000. As a result, I researched into travel rewards cards to see how to earn flights.
Nomadic Matt had an interview with Brian Kelly, better known as The Points Guy. TPG is one of the best-known blogs for how to earn more frequent flyer miles. Kelly is like a real-life Ryan Bingham, the character memorably portrayed by George Clooney in the film Up in the Air (watch the air miles scene) Take this excerpt, for example:
For instance, while the current Chase Sapphire Preferred bonus offer is down to 40,000 Ultimate Rewards points from its high of 50,000, I still think it’s a great card because you get double points on travel and dining spending (basically all I do), and those categories are fairly broad so you can earn a ton of points. You could then combine those points with the Ultimate Rewards points you earn with the Chase Freedom card’s quarterly spending bonus categories where you earn 5 points per dollar spent on things like groceries, office supplies, gas stations, or specific merchants like Amazon. Suddenly you’re looking at a ton of extra points.
I will say that you absolutely must do your homework before applying for a credit card. Always look at the fine print and carefully read the terms and conditions. For example, many credit card promise big sign-up bonuses. However, if you read closely, they often require you to spend a large amount of money over a short time period. A common deal I’ve seen is spending $1,000 in three months. The card I picked offered 25,000 miles with your first purchase, regardless of the amount.
The other tip I can give is that if you buy stuff on the Internet, always check your card’s “shopping portal” first. Most credit cards have specific websites that link to the online merchants they’ve partnered with. Let’s say you want to buy new clothes from Nordstrom’s website and you have a credit card with United Airlines. You could earn more miles per dollar if you logged into the United Airlines Mileage Plus Shopping website, then clicked on Nordstrom there. MileagePlus would bounce you over to Nordstrom, and then you would make your purchase. You would get more miles then if you’d gone to Nordstrom directly.
Of course, sometimes you’ll find that your credit card doesn’t have an affiliation with a site you prefer to use like Amazon, and you have to go with lesser-known vendor like Buy.com. I encountered this recently when shopping for video equipment. Then there are times where you have to go for quality, regardless of how it affects your miles. I wanted a good-quality lapel mic for my videos, and the best reviews were for a small independent business called Giant Squid Audio Lab. The owner is an audiophile who makes his own microphones. Even though I wouldn’t get double or triple miles, I bought a mic from him anyway.
Do you use travel rewards cards? How do you get the most out of them? Please share your tips in the comments.
Savvy travelers probably know these things, but I know some who are still behind the curve and going abroad soon. So here’s an update: Though many report having no problems at all using their US mag-stripe cards and ordinary ATM cards abroad, make sure your credit or debit card has a smart chip. The global standard is “chip and PIN” technology, meaning you’ll need to enter a PIN after the terminal reads the card’s chip. Call your credit card company and ask for a new card with a smart chip for the “chip and signature” option. Most cards without the chip will still work sans-PIN at most automated kiosks though, since a signature is generally not needed for purchases under $50.
Another thing to keep in mind when pulling out the plastic abroad: When in doubt, go with the debit card. Though your bank likely charges a currency conversion fee in transactions abroad, credit card fees are usually almost twice as high as debit card transaction fees. Capital One does not charge foreign transaction fees at all, so it may be worth getting one just for your travel use. If you want other card options, the helpful site NerdWallet.com has a list of cards that don’t charge them either.
Roaming charges for calls can be another “under the radar”-type budget buster. Smartphone users can rack up big roaming fees unless they remember to switch on the device’s Airplane Mode and Wi-Fi when boarding the flight to a far-off place. Also remember to switch off the cellular mode.
Data usage costs more money overseas, but the International Data Plans from your provider are rarely the best option anyway; use Skype or Truphone instead (I’m a big fan of Skype) and, with a decent Wi-Fi signal, you can make international calls for dirt cheap. Estimate how much usage you’ll need. There is the ever-handy pay-as-you-go option or a monthly, flat-fee plan that allows unlimited calls in certain countries.
Alternatively, Facebook’s Vonage Mobile app enables globetrotters to make free international calls over Wi-Fi to Facebook friends who also download the app. If caller and recipient have iPhones, FaceTime is a great deal with one flat fee.
Now go have some fun!
What would you rather have: a million dollars or a million frequent-flyer miles? Airline miles have almost become a new currency. They can be exchanged for hotel stays, car rentals, gift cards, and merchandise. The movie “Up in the Air” with George Clooney brought mainstream attention to “travel hacking.” This is how people use their ingenuity to build up as many frequent flyer miles as possible.
The Los Angeles Times had an article titled The frequent flyers who flew too much. It’s about how American Airlines offered to sell tickets for unlimited first-class travel. This excerpt reveals how these airpass holders acted:
Passes in hand, Rothstein and Vroom flew for business. They flew for pleasure. They flew just because they liked being on planes. They bypassed long lines, booked backup itineraries in case the weather turned, and never worried about cancellation fees. Flight crews memorized their names and favorite meals.
It’s fun to imagine what you’d do you if you fly anywhere, anytime and not worry about the cost. Going to another country becomes as easy as taking a bus. However, all good things must come to an end. The airline changed the terms of the deal.
What happened next is up for debate. Did the airpass holders take advantage of their privileges to the extreme? Or did the airline renege on the offer?
Have you earned free flights? How did you do it? Please share your tips in the comments.
Considering costs is a vital part of planning your entry into expat life. Neglecting budgeting can abruptly cut short a stay. On the other hand, a little financial planning can pay off in a longer and more enriching lifestyle than you dreamed possible.
A great web-based tool for this is Numbeo. Just type in the name of a city or select a country from the drop-down list. You get the standard information, like how much expensive it is to rent an apartment. You also get much more detailed figures, such as the cost of imported vs. domestic beer. Near the bottom of the page there will be a colored pie chart, showing which expenses will take the most bite out of your budget.
Money isn’t everything, however. More expensive isn’t always better, and cheap isn’t always a bargain. You might want to drill down even deeper to determine quality of life. You could be torn between two countries that seem almost equally attractive to reside in. In that case, you can try using If It Were My Home. You can choose two countries and get a breakdown comparing them on life expectancy, health care, and other important factors.
Have you been an expat? What tools did you use to do research? Please share your tips and experiences in the comments.