For years all we seemed to think about was saving money to travel. We lived very frugal lifestyles in order to finally be able to slow travel. It’s now been over three years since we sold our house in the US and hit the road. During this time we have learned a lot about money, and not just spending it. Spending money sounds easy and it is, but knowing how to maximize your money and avoid fees and extra charges on the road will make your travels less stressful and allow you to live a little bit better. In this article we are going to share with you some tips and tricks we have learned during our time slow traveling the world.
Whether you are planning to slow travel the world or are just taking a ten day trip to Europe there are a few things you should think about now that will save you a lot of money down the road. Some of these things can take time to get organized so the sooner you start planning the better.
Debit Cards & ATM Fees
Even in you are in a country where credit cards are widely accepted, you are going to want to have some local cash on hand for small purchases and tips. If you are just going to one country this can be as easy as getting foreign currency from your bank before leaving home. Most major banks now allow you buy foreign currency on their website and they will send it directly to your home. This is nice as you won’t have to worry about using an ATM at an airport where the rates are often below what you will find elsewhere.
With that said you should absolutely have the ability to get cash from ATM’s. To do so there are several things you need to think about in advance. First and foremost, does your bank charge you an international fee when using your debit card at ATM’s in a foreign country? You can find this out by calling the number on the back of your debit card or searching your account terms online. If they do charge a international fee or conversion rate, these fees are going to add up in a hurry and can have a major impact on how much your trip will cost.
In addition to fees charged by your bank for using foreign ATM’s, there are also fees from the local banks for using cards not associated with that bank. Again, this can really add up fast and before you know it you are often paying and extra 10-15%. There are a few cards that will take care of these problems for you. We have a Charles Schwab Investor Checking account. We have been using debit cards associated with this account for years and it has saved us thousand of dollars. Charles Schwab does not have any international fees or conversion rates. This alone is great but the real benefit to having this account is that they actually reimburse us for any ATM fees charged by the local banks. We also carry a debit card connected to another online checking account, but it is only for emergencies only and we have yet to use it. As the Schwab checking is an investment account it takes some time to set up, so don’t wait until right before your trip starts to get this done.
So you have the right cards attached to the right accounts and you don’t have anything else to worry about, right? Every ATM is different and there are several things you need to know about. What is the daily limit from your bank and from the local ATM? Then a really big one is the exchange rate. This isn’t something you think you should have to worry about at the ATM. The biggest issue and the way lots of banks make money is by offering a poor exchange rate. In many countries we enter our pin and the amount we want to withdraw and then a screen pops up with a whole bunch of information about exchange rates and it normally gives you two options. You can choose to accept the rate the ATM is offering or you can decline the exchange rate. You ALWAYS want to hit decline. This does not decline the transaction or cancel anything. It simply means that your home bank will negotiate the rate of exchange and it will save you a lot of money.
So then you hit decline and the ATM dispenses a stack of large denomination notes. Not having small change can be such a difficultly in many places. That is why we always try to opt to withdraw smaller than round amounts. In Mexico for instance, if we were going to get 2000 pesos from an ATM, we would instead opt to enter 1900 pesos. Then at least we were starting with a few smaller notes.
Credit Card Fees
Now don’t forget about your credit cards. Make sure you have a card that does not charge international fees. This is just as important for the credit card if not more so as you will often be using them for large purchases such as hotels and meals in nice restaurants. Make sure you have at least one credit card with no international fees or foreign exchange fees. One more important thing to keep in mind is if at all possible do not use your credit card at the ATM to get a cash advance. You will likely be charged a large fee by your bank, up to 25% of the amount you take out.
Once you have the right credit and debit cards the only things left to do is notify your bank of your travel plans. You can do this online, though your banking app or by calling the number on your card.
Carry Some Cash
You should plan on carrying some cash in case of emergencies. Anything can happen. You could lose cards, have cards stolen or someone could get a hold of your card information and make unauthorized purchase. This happened to us recently and while we don’t know where they got our information we suspect it was from an ongoing online subscription. Of course, we are not liable for the fraudulent charges, but they do cancel your cards and getting new ones on the road can be difficult. So, it is always good to have a back up plan and no matter where you are, there are places you can change US dollars cash to local currency.
Don’t just leave home with the cash you have in your wallet. Decide how much you will need and go to your bank. Have them give you as perfect bills as they have. We have been to countries such as Myanmar where the bill must be perfect or nobody will take them. This means no tears, no writing and no folds. Get mostly 100 & 50 dollar notes as they will get the best exchange rate. Some currency exchanges won’t take smaller bills and if they do the rate is reduced. Educate yourself on the exchange rates of the countries you will be visiting. We use the XE Currency app as you can store several currencies and keep up to date on the rates.
Do not carry large sums of cash as you are required by many countries to declare with customs any amount over ten thousand US dollars. Getting additional US dollars while traveling can be expensive, especially if you are using a local currency to exchange to dollars. There are several places around the world that use dollars as their currency and these can be great places to stock up while traveling. In Cambodia the ATM’s give you the option to make withdrawals in either Cambodian Riel or US dollars. We have always received perfect brand new 100 dollar bills from these ATM’s. Other places to easily obtain dollars include Ecuador and Panama.
Payment Apps
Some countries we travel to just want cash. They are not interested in credit cards as the fees are too high for them. In other places you will see that the locals rarely use cash and use apps on their phones to pay for everything from hotels to street food. Across Europe you will find that many places allow you to pay with Apple Pay. This is less so in other parts of the world and there are often local payment apps that everyone uses. For many of the local payment apps you will need to have a local phone number. We have two phones. One that we use to get a local SIM cards that allows us to have local calls and data. We also sometimes use an eSIM which is just an app that we use to install an electronic SIM for each country or region we travel to. Even in places where the locals pay by app we haven’t had any issues paying with cash.
Keeping Your Money Safe
Our second phone is for banking. After having our credit card information stolen we now have two-step verification set up on all our accounts, so we need our US cell number that is associated with our bank accounts to log in and make payment. We also use a VPN. This allows us to set our location to anywhere in the world and encrypts all of our banking transactions. I highly recommend using a VPN if you plan to travel for a significant period of time or will need to do banking while on the road. There are lots of VPN apps out there, we use SurfShark and have been very happy with the service. As long as we are taking about security it’s good to think about where you will keep your cards, cash and passports. We highly advise against keeping everything in the same place and not carrying it all around with you. It is too easy to lose a wallet or bag and have it all gone. We suggest carrying some with you and keeping some in your hotel room, preferably in some sort of lockable travel safe.
Getting financially ready to hit the road can take a bit of time and planning, but the time you spend on these things before your trip will allow you to relax and enjoy your travels.