Managing your money on the road can be challenging sometimes. On one hand, you definitely don’t want to run out or pay extra fees that can be avoided. On the other hand, you don’t want to spend significant amounts of time on your trip budgeting and tracking. I’m going to show you several ways you can have the best of both worlds and help you make your hard-earned money go as far as possible.
1) Open a Charles Schwab Investor Checking Account specifically for your travels
This is my #1 tip that I tell everyone. The reason I love this account so much is that you get reimbursed for ATM fees anywhere in the world, no foreign transaction fees when using your debit card, no minimum deposits to open the account, and no monthly maintenance fees. That means that you can take out small amounts of money every few days with no penalty rather than taking out a huge amount all at once. Most debit and credit cards charge 2-3% of each purchase as a foreign transaction fee. You might not think it’s much each time, but those fees add up over time. At the end of every month you’ll see a credit to your account for any ATM fees you get charged, anywhere in the world.
Also, this account should be separate from your main bank account at home. If someone should get ahold of your card or information, you don’t want to be totally stuck with no money.
2) Apply for a credit card with no foreign transaction fees
Probably the 2 best travel cards you can get are the Chase Sapphire Preferred and the Barclays Arrival Plus World cards. Both give you a really good signup bonus (40,000-50,000 miles depending on when you sign up) and don’t charge foreign transaction fees. Plus, these both have chips embedded in them so you can use them with the special ATM machines they have in Europe and the UK (and will have in the US starting this Fall).
Note: To get the signup bonuses, you must spend $3,000-$4,000 in the first 90 days you have the card. It’s not worth getting the miles bonus if you don’t spend and pay off those amounts in that time period. Wait until you have a significant purchase to make, or you can pay normal expenses like rent and just pay them off like you normally would.
3) Go to local ATMs rather than exchanging money at the airport
The exchange you’ll get at one of the money changers at the airport is never going to be very good. You’re better off going into town and going to a local ATM. If for some reason you have to get money at the airport, find a bank ATM. You’ll get a better exchange rate and, if you have the Charles Schwab card I mentioned above, you’ll get reimbursed for the fees.
4) Try and stick to a rough daily budget, but only calculate the average for the week
The way to figure out a daily budget is to take your total budget for the trip, subtract out plane tickets and other up-front expenses, divide that amount by the total number of days you’re planning on traveling, then knock a couple dollars off that in case unexpected expenses come up (and trust me, they will). This will give you a pretty good daily budget number. Also keep in mind that this number may shift up or down depending on what part of the world you’re traveling in. For example, your daily budget will be significantly lower while traveling in Southeast Asia versus traveling around Western Europe.
When tracking your spending, don’t do it every day. First, you’ll drive yourself nuts. Second, you want to be spending your time out exploring and doing cool things in the place you’re visiting. My recommendation is to track your bank account once a week. Since you’re using a separate bank account for your travels (as mentioned above) anything running through that account should be related to your trip. Take the ending balance from the previous less the current balance and divide by 7 days. Doing this averages things out as there will be days you spend more and days you spend less. If I have a big night out one day, then I might try and balance it out a bit the next day. As long as your weekly average is roughly in line with your original daily budget then you’re going to be in good shape.
5) Keep an extra credit card (and an extra ATM card if possible) stashed somewhere in your luggage
It’s good to have an extra card or 2 in case of emergency. Whether you lose the card(s) you have on you, they fall in the ocean (been there), or get stolen for some reason, it’s good to have backups you can rely on. You don’t want to be in the middle of your trip and totally stuck because you can’t access your money. Keep your extra cards in a ziploc bag and stashed somewhere in your luggage so you can easily access them if need be.
6) Keep your passport and extra money in a money belt while you’re in transit
While you’re in transit between destinations, you don’t want to be an easy target for a pick-pocketer. When you’re not checking in at the airport or showing your passport on a train keep it, along with extra money you are carrying, in a money belt around your waste. Keep enough money for the day in your pocket in a money clip, so if you lose only that it’s not the end of the world.
At the end of the day, you don’t want to be constantly worrying about your finances while you’re traveling. You want to be enjoying the destination you’re in. These tips for managing your money on the road will help you stretch your money further, be able to travel longer, and create more adventures along the way!
Do you have some more tips for managing your money on the road? Leave them in the comment section below and let’s have a discussion around best practices.