Lessons Learned: How to Handle Money While Traveling

I read a lot of travel blogs. A lot. And I’ve been preparing for this trip for over a year, so I’d like to think I’m prepared for handling my finances on the road. But then I talk to people back home and realize that this stuff isn’t common knowledge. I mean, if you haven’t left the country before, what do you know about how foreign ATMs work with your current bank? What would you do if you lost your debit card while traveling? How much should you budget per day for countries other than your own?

Then there’s times I talk to people who have actually travelled for months at a time and realize I’m not nearly as savvy as I thought. Or that time (um, three days ago) that I called up one of my banks and got an excellent tip for getting cash if you lose your debit card.

I’ve made idiotic mistakes with money while traveling. I am certainly no expert on this topic. There are books and blogs devoted entirely to this subject. This is more of a layman’s guide to handling money on the road and how to not screw things up, complete with fun stories about the stupid things I’ve done. Read on for more.

How will you get cash while traveling?

Fun fact:  Lots of places, stores, and restaurants in other countries don’t take credit cards. Lots. In the US, this is crazy talk. I just paid for my $2.95 coffee drink with my Visa (still can’t get this damn wifi to work in here either). But I’d say for the most part (and definitely while traveling in Thailand and Mexico), with the exception of hotel and airbnb accommodations, we paid cash for most everything on our trips.

How do you get cash? you might ask. Well, how do you get cash at home? You pull out your debit card and you use an ATM. (Okay, seriously, if you are a profesh travel blogger reading this, skip ahead.)

First, you tell your banks when and where you will be traveling. My Wells Fargo debit card worked fine at ATMs in Thailand. Well, if by “worked fine” you mean I got cash out – they charge an international transaction fee. Coupled with the Thai bank’s ATM fee, I’d guess I paid about $7 in fees each time I withdrew money.

To avoid this problem, I wised up and got the Charles Schwab debit card that comes with their High Yield Investor Checking Account. It doesn’t charge any international fees AND it refunds any ATM fees that I might’ve incurred at the end of each month. It’s what all the big travel bloggers recommend for US citizens traveling abroad.

All the types of currency I could find lying around the apartment…

But be careful about those ATMs…

Another tip about using ATMs abroad:  Don’t use sketchy ones. Look for ones that are attached to banks. That way if your card gets sucked into the abyss, you can at least go to the bank when they’re open and ask them to retrieve it for you. Also, there are mixed reviews about using the ATMs with little glass cubicles attached, but I actually prefer them. I feel a little more secure when there is a wall between me and the general public as I put my money away. I say all this, but I’ve used ATMs at bus stations in small Mexican towns without a problem, sooo….

Fun story with a lesson:  One of my very first weeks in Argentina, I was using an ATM in one of those glass cubicles -Banco Francés, I believe – and the ATM, as they tend to do in most places, prompted me after I got my cash with something like, “Do you want to make another transaction or do you want your card returned?”

Well 20-year-old Rachel just got her cash, left the cube, and headed on down the road. Meh, what do I care about the ONLY debit card I’ve brought with me. Why would I need that AT ALL over the next five months of my life in a foreign country? Blah! This hundred bucks should last me!

Anyway, some very nice guy who went to use the ATM after me withdrew my card and chased me down the sidewalk to return it. He could have just hit “Another transaction” and scooped up some nice pocket money.

Another quick tip:  Set your daily limits on your debit cards low, so that if you do make a mistake like this, or if your card gets stolen, the thief can only get out a little bit of cash at one time. Damage control. Personally, I set each of mine at $500 or less. Which brings me to the next tip…

Bring a backup debit card.

Really. Bring more than one debit card! If you’re in a foreign country and one card gets lost, stolen, or compromised, how is your ass gonna get cash now? I’ve only recently started taking this advice.

But if you’d like to learn from another fun anecdote at my expense:

I got a lot of my stuff stolen in Argentina one night. Like my little cheap cell phone, my student ID, some pesos, and my ONLY debit card. (I was in a club, yes I’d been drinking, it was very crowded, loud, and dark, and the thievery was very subtle. I can only blame myself. But then three of my friends were robbed in the same club a few months later, so I feel like it was probably a professional at work.)

Anyway, my bank (Wachovia at the time, but a lot of banks in the States are like this) would not mail debit cards out of the state, much less out of the country. So that meant I had to wait for them to issue a new card, mail it to my mother in North Carolina, who then had to mail it through the always dependable Latin American postal system to my apartment in Buenos Aires. This was not a quick process.

What did I do for cash in the meantime? I sat my ass in the nearest Western Union and had my parents wire me cash. Of course, my mom’s account was flagged when she originally tried to send money to Argentina, thus impeding this already laughably slow process. I just had to start a “tab” with my British roommate – I promised to keep good track of the cash she lent me and pay her back eventually…

And Maybe a Backup to your Backup

So having learned these lessons from my own stupidity, I decided to call up ol’ Charles Schwab and ask them if they could issue me a spare debit card. I’ll be on the road for a few months so there is a SOLID chance that something will happen to this one. (I just knocked on wood while typing.)

Yeah, they don’t do that. Turns out you can’t get another debit card unless something happens to the old one.

BUT, genius that the bank’s customer service lady was, she suggested that I bring a few checks with me so that I could then write them to myself and cash them in emergency situations. I think this is a brilliant idea, but if anybody can tell me otherwise, PLEASE let me know before I do it (because I’m going to do it).

I set this as the background on my iPad a while ago as motivation for travel. It’s kinda like Uncle Tony is saying, “If you don’t keep saving and go, you’re going to hate yourself!”

Traveler’s Checks are Not a Thing

Don’t even ask me about these. Nobody uses them. I wouldn’t even begin to know what to do with one.

Credit Cards (and Flights)

I got my first credit card last year. I’m 27. Seriously, what have I been doing with my life? I always thought hey, I’m not going to spend money if I don’t have it (and I still think that way), so psychologically I felt I’d save more money if I only used a debit card. This is actually true, but, hear me out. It’s kinda dumb for (at least) two reasons:

First, I repeatedly ignored my mother’s multiple requests that I get a credit card “for the security.” And it’s true. Most of the time a credit card company will alert you if there is fraud on your account or, if you alert them that something is amiss after reviewing your statement, they can reverse those fraudulent purchases. With a debit card, if it gets compromised and the asshole criminal has already taken your money, often there’s nothing you can do.

Second, without a rewards credit card, you are wasting so many possible free airline miles! You can get points for every dollar you spend and then redeem them for fun things – I prefer the miles obviously. If you’re going to spend the money anyway, you may as well get something for it. I’m no expert on this (check out The Points Guy or Nerd Wallet) so my only advice is to get a card with a great rewards system and sign-up bonus, use it for everything, and then cash your points in for free flights. And obviously, only do this if you can pay off your credit card in full every month – don’t be stupid. You also need decent credit for a lot of the good rewards cards.

I have the Chase Sapphire Preferred and the Delta SkyMiles Gold American Express. That Chase card is fabulous. I get double the points on dining (which is basically all I do) so I always use it when buying food and drinks. And those points are redeemable on SO many airlines via the booking system on Chase’s Ultimate Rewards site. I just booked my flight to Cartagena via Jet Blue using points for $22.50. The Delta Amex isn’t as great for racking up points, and Amex is not as widely accepted, but it had a hefty sign-up bonus and RDU is a Delta hub, so I got it. I used those points to get my return flight from Lima to Raleigh for $53. Baller.

Yeah, you guys, I’m getting to and from Latin America for $75. I am a believer in this credit card game.

Side Tip: Every time you fly, be sure to sign up with the rewards network associated with that airline. It costs nothing, and you may be able to cash in those miles/points/whatever in the future. Charlie taught me that one.

Secret Emergency Tip: Using Your Credit Card as a Backup for Cash

I learned this from a friend who just returned from a round the world trip. He had the unfortunate luck of having his debit cards (both!) compromised while abroad.

Your credit cards are usually equipped to give you cash advances. Yes, this is expensive, but hey, beggars can’t be choosers. (And suppose your parents don’t love you and want to send you money via Western Union…)

Before you leave, you can set up a PIN number to go with your credit cards so that they can also be used as a debit card to get you cash if you truly need it. If you do this, you’ll pay a fee when you withdraw the money and you should be sure to pay off that cash advance immediately online so that you aren’t charged any crazy interest.

I’m still not exactly sure how this works, but I’ve just requested PIN numbers from both of my credit card companies, so those are en route (and hopefully I’ll never have to do this, ever).

Additional Security – Planning for the worst, my friend also suggested I get a third credit card. Well, I was very anti the idea of signing up for ANOTHER credit card and having to remember to pay that off too, so I just got my mom to add me as an additional user to her Capital One card. Boom, third credit card, plus there’s an authorized person in the US who can solve any problems that might arise (and who won’t mind spending time on the phone with the credit card company if I have issues, right mom?).

How to Travel the World on $50 a Day and the travel issue of Bon Appétit, obviously

My Budget On the Road

Man this post is getting long. I didn’t even know I knew this much about finance (I hear it’s actually pronounced “fuh-nance” if you want people to think you know what you’re talking about).

I’m subscribing to the belief that a budget of $50 a day on the road is possible. Nomadic Matt says it’s possible. I have his book, I’ve read his book, I got it signed by him, and then I went out for beers with him and the rest of the book-signing groupies when he visited Raleigh, so you know it’s real.

How is this possible? (Again, if you’re a long-term traveler, you know that it is, but everyone else, hear me out and keep on reading.) Lots of people seemed shocked by this dollar figure.

Hostels and private rooms on airbnb can be really cheap. I just booked my first bed in a hostel dorm room for about $13 per night (which is actually kind of pricey for South America, but it’s in the touristy town of Cartagena and the hostel’s location is prime). Other cities will be cheaper, so hopefully it will balance out.

If you haven’t checked out airbnb before, or you feel nervous about it, just do it! (get $25 off your first stay if you sign up through that link!). I usually rent a whole apartment if I’m traveling with Charlie or my family, but I’d love to just get a private room while traveling solo. It’s an authentic way to see a city and get recommendations from the owners who live there. They often have rooms listed for under $30 a night.

I also choose travel destinations that are cheaper than the US or Europe. A change in location means a change in exchange rates and costs of living, so I usually pick places where the dollar goes pretty far. Latin America and Southeast Asia are the typical budget backpacker havens. However, I know that Colombia will be more expensive than Ecuador and Peru, but spending time in each of these countries will hopefully help the budget balance out in the end.

Naturally, some activities like Scuba diving and hiking the Inca Trail will be more expensive than other days of lounging and eating street food and $3 menus del dia. Overall though, I’m aiming for an average of around $50 per day. And if I don’t hit it exactly, it’s okay because I’ve budgeted in a little cushion. (Or I will MAKE that shit balance out when I get to Southeast Asia and the land of $1 street food meals).

I am not 18 and taking a gap year. I realize I need some comfort and occasional luxury in my life. I enjoy my couch time. I’m sure that after about two weeks (maybe sooner) I’ll get annoyed and/or claustrophobic and want to murder my hostel dorm mates. I might need a nice hotel room or airbnb with my own space and breathing room. And I’m willing to “splurge” on that. Hey, know thyself.

To keep myself on track, I’m keeping a spreadsheet of expenses and trying to stick with it. Apparently keeping track of your expenses is crucial to maintaining a budget? I expect to spend a little more at the start of my travels as I become accustomed to this lifestyle. This isn’t a vacay where I get to blow money on anything and everything I want because YOLO! fancy fruity liquor drinks and all the souvenirs! If I want this to actually be “long-term” travel, I’ve got to budget.

Do you guys have any tips for handling finances on the road? Or any dumb stories about what NOT to do?

I’m thinking about sending out budget updates and links to a spreadsheet of my finances (via Google Sheets) in the blog newsletter, so sign up below if that’s something you’re interested in!