So you’ve saved and saved and saved, put away your refund determined by a tax estimator, and now it’s finally time to hit the road. How are you going to manage that wad of cash while you’re away? The more thought and planning that you put into this before you leave, the easier it will all go while you’re on the road.
Managing The Bank Accounts
We used a two tiered bank account system:
- Our primary savings account was with a brick and mortar bank in our home town. This account was the highest interest savings account we could find so that we could maximize the money our money was making for us while we were away.
- Our daily use account was with an on-line bank that offered free ATM withdrawals in foreign countries. We kept at most $2000 at a time in this account and, as it depleted, we would transfer money to it from the primary savings account. We set this account up as a ‘bill payment’ on the primary account and would simply electronically pay the bill to fill up the account.
Our main method of obtaining cash while we were away was ATM’s. We had barely any trouble finding bank machines everywhere we went. Every major city or town has at least one. If we were heading somewhere very small we would make sure we had taken enough out already. Even Laos, which by all accounts had a dearth of ATM’s, had more than enough to make access easy.
Depending on the local ATM fees (remember, our bank account didn’t charge any ATM fees but sometimes the local machine itself does), we would take out enough money to last a couple of days. Cash is king on the road so this meant we always had to have enough to cover transport, hotel, food, drink and entertainment.
Have a back up!!! We carried two ATM cards each for our daily bank account and an additional ATM card each for the savings account. We never kept all of these in the same place for obvious reasons.
The need for this became abundantly clear on the day that the ATM machine in Nha Trang, Vietnam munched on Jason’s’ card. We watched in horror as it repeatedly didn’t spit it out all the way and kept sucking it back in…and then it stopped trying and just kept it. Bummer.
We used credit cards only for airline tickets and to secure reservations (if needed). The interest charged on credit cards is outrageous and so we paid the balance as soon as possible from our savings account. We used credit cards only for the convenience of them…it’s hard to pay for an online airline ticket with cash!
Ca$h Is King!
Cash ruled the world everywhere we went. Most places don’t take credit cards never mind debit cards and, even if they do, they likely charge more for the privilege (it costs them so they pass the cost on to you).
Never accept torn, ripped, dirty or wrinkled bills…if you do you are being used as a dumping ground for these bills. Merchants will often refuse bills that are torn, ripped, dirty or wrinkled too much so you shouldn’t accept them either.
Back Up To The Back Up
We carried $500US cash in our bags as the ultimate backup. We had heard that some visas and entry fees could only be paid in US cash (and found that to be true) so we brought this along for those occasions. We made sure that the bank issued us crisp, clean, unmarked, whole bills and kept them in that state as we travelled. Once in a while we found an ATM that dispensed US dollars (I have no idea why) and so we would top up this fund at that time, although the original $500 would have gotten us through.
Try to limit the cash you need to exchange at a border crossing – you will most definitely get ripped off. Not only is it a bad exchange rate but we found that sheisters tried (and succeeded) in confusing us by talking quickly, quoting exchange rates from one currency to American dollars and then into the second currency, and pushing to have the transaction take place quickly. More than once we walked away thinking ‘hey, wait a minute’…but it was done. We instituted a policy that we both had to understand and agree to the math before we made an exchange. If you want to get ahead of the game, click here to order your foreign currency before you get to your destination. That way you can avoid being ripped off!
Keep Track Of Every Dime
Always know the state of the budget. It’s fine to be over (and even better to be under!) but you should know where it’s going and have some idea whether you can make it up or not. The last thing you want is to run out of money before you run out of time!!
I set up a spreadsheet before we left that tracked all the money in about 6 categories (you can check it out here). We had a budget notebook with us all the time and would simply write down all the money we spent. Every couple of days I would update the spreadsheet – I had already set it all up to do the math so could keep track of it all very easily.
I know this sounds like a no-brainer…and it is…the more money you can put away the better off you will be on the road. No-one likes to worry about how much they have, or how much they are burning through so the more you can save the better.
First off…stop digging the hole! Stop accumulating whatever debt you are accumulating. No more ‘pay-as-you-go’, no more ‘don’t-pay-until-next-year’, no more ‘just-put-it-on-the-credit-card’. Just. Stop.
Then, work towards filling the hole. Pay off debts aggressively. Debt is costing you money and giving no reward. Once the debt is gone, all that money spent paying it off is now building the pile ‘o money that will be yours!
We made plenty of sacrifices so that we would have enough for our trip. We tracked all our spending so we would know where every dollar was going (a habit we keep to this day) and we increased our consciousness about spending money, asking ourselves whether we really needed an item or just really wanted it. Every purchase was compared to ‘how many days in Thailand’ it cost. It really worked and constantly reminded us of the bigger goal that we had.
We ate out at restaurants way less often (one of our fave things to do), we didn’t go on any mountain biking trips that year, didn’t buy any new clothes and moved into a cheap rental once we had sold our condo.
Any money that didn’t need to be spent, wasn’t. Eye on the prize baby!
Find A Good Bank That Will Help You
I know, sounds impossible, but some are better than others and, if you do your homework you might find one that is better. It’s worth the time to look.
Banking fees were a significant portion of our budget…about 2%…so it was important to make sure we were getting what we needed and spending the least amount to get it.
Our primary concerns were:
- Account Security. We had a pool of money that would gradually diminish as the year went on but we didn’t want it all to be accessible at once for security reasons. What if someone got hold of our cards and could gain access to the whole pile? So we set up a system of bank accounts to which our cards only had access to one. We were able to electronically transfer money to keep this one account filled up as we needed. Alternately you could schedule payments from one account to another.
- Banking Fees. We wanted an account the would give us the greatest interest rate but the lowest banking fees…no point spending money to store your money! Many accounts waive fees if you have a certain amount in them all the time. Seeing as we had enough money to cover this minimum we managed to reduce our fees significantly.
- ATM Fees. Our plan was to use ATMs almost exclusively to access cash so we needed a plan that would minimize these costs. Some banks charge up to $5 per transaction at a foreign ATM machine…and that’s on top of the local fee that the ATM machine may charge! Many ATMs have a daily limit that you can withdraw and so we would have to make multiple withdrawals to have enough cash…and would be charged for every withdrawal. Ouch! We managed to find a bank that charged zero ATM fees, foreign or otherwise. Score!!
- Credit Cards. You need a big name card. Visa or Mastercard are where it’s at in the rest of the world. Actually, ca$h is king, but if you’re going to carry a credit card (and you should) then it should be one of these two. Find one with the lowest interest rate possible and beware of exchange rate premiums that may apply. Read the fine print…out of country rules may be different than in country rules.A credit card with a reward or travel points system may actually help pay for your travels! Look into the possibilities.
Don’t be afraid to change banking providers if you find that your current bank can’t (or won’t) help you. Our long term bank was absolutely inflexible with regard to fees etc. We had evidence of another bank that would be able to help us, but they still could not bring enough to the table to make us stay.
Don’t negate on-line banks. Our end case scenario involved a ‘brick and mortar’ bank that had an on-line affiliated bank. The combination of the two met all our above needs and worked like a dream.
Remember it’s your money!!
Power Of Attorney
Ugh! It just gets drier and boring-er, doesn’t it? But this piece is what gave us the most piece of mind.
Sure, we thought we had accounted for every financial scenario, had dotted all our i’s and crossed all our t’s…but what if we forgot something? How were we going to manage it while we were on the other side of the world? We asked someone to be our Power Of Attorney.
- Choose someone you absolutely trust. Remember, they will have access to your money. Whether it’s a family member or a friend, it has to be someone that absolutely has your best interests at heart.
- Check with your bank as to how this is done. It may be as simple as you writing a letter or, as in our case, you may need to all head to the bank to have paperwork signed.
- Learn the conditions of the PoA. Ours allowed our friend to deposit money, withdraw money and write cheques on one account but did not allow access to all the accounts or the investments. This protects everyone involved.
We ended up using our Power of Attorney more than we thought we would. A couple of unexpected bills showed up that he could take care of for us and, while arranging to come home, he took care of the rental deposit etc so we could have a place to live. Thanks Ron!!
It’s about more than saving money…it’s about managing your money.
Are there any other things you have done to financially prepare for a big trip?
He heard that we were about to embark on a journey around the world and contacted us to ask if he could join us.
He comes with great credentials, having traveled much of the world already. Iceland, India, Malaysia, Norway, Italy, Spain, Portugal, Brazil, Japan, and Jordan just to name a few.
In fact he has already traveled to more countries than we plan on visiting on this trip. And, because he has already been to some of the countries we’ll be visiting, he’ll make an excellent tour guide.
It’s true, it can be difficult traveling with a third wheel but, even having met Roland only briefly, I think he will fit in just fine. He’s quiet, likes to read, doesn’t complain much and enjoys a good beer. All the things required of a good travel partner.
We hope he likes us too. He has traveled with many people so we definitely have to measure up. Luckily we’re quiet, like to read, don’t complain too much and we love a good beer.
I think we’re going to get along just fine.
We have been planning for the better part of a year now and I think we have it all covered. I have lists, and lists of lists. I’ve ticked off almost every item on every list – not bad considering I am usually a serious procrastinator – but, for this, I wanted to be ready.
We’ve told all our friends and family. We secured LOA’s from our jobs. We’ve put together the itineraries. The house is sold and the car is on the market. We researched travel insurance and got vaccinations. The packing list is ready (okay, it might need a revision) and most items are purchased. We’ve read countless books and can speak a wee bit of Spanish. We’re ready.
There are a few things left on the to-do list but I find myself procrastinating and not doing them because then we really will be done, and there will be nothing left to do…but wait.
We’re getting down to all the ‘official lasts’. You know, the ‘official last’ time we’ll visit the local pub, the ‘official last’ time we’ll visit with this or that friend, the ‘official last’ time we’ll drive our car, the ‘official last’ time we’ll go for a ride.
Of course, that will quickly be replaced by the ‘official firsts’. The ‘official first’ time we’ll pack our packs, the ‘official first’ time we’ll set off on an around the world adventure, the ‘official first’ time we’ll stay in a hostel, the ‘official first’ time…well, there will be lots and lots of those.
But yeah, I’m ready. Can we just go now? 30 more days…
This week, in an attempt to keep our malaria medication costs down, we have been trying a ‘loading dose’ of Mefloquin to see if we would suffer the psychotic side effects. Side effects include (but are not limited to) bad dreams, anxiety, headaches, suicidal ideation and hallucinations. Fun eh?
One has to wonder that, if both of us are on the medication, how will either of us know if the other is going crazy!? So, of course, all week we’ve been bantering back and forth accusing each other of crazy talk and then assuring each other that, no, we are not crazy. Read More
We put our packing list together last weekend. We’ve decided on and purchased our backpacks so it was time to decide what to put in them.
We’ve been thinking about the packing list almost since we decided to go on a year long jaunt around the world. As soon as we decided to sell or store everything and put the rest on our backs, we’ve wondered what exactly would be in those packs.
I have checked out the packing lists of every travel blog that I come across (and, believe me, I read a good many!) and have read about the virtues of not packing too much but have also worried that I won’t have enough. The classic adage is ‘pack half what you think you need and twice as much money’. I’m sure this is true but, when trying to decide what to put in that pack, I have a hard time leaving stuff out (and the budget isn’t growing either).
Besides food and accomodation, the other element of our trip that will see plenty of variety is modes of transportation.
Moving from place to place, and getting around each place we’ll be visiting will be a huge part of our trip.
I can only imagine all the types of vehicles we will encounter while traveling such distances, through so many different countries, and over such diverse terrain. Read More
Long ago I had trouble truly enjoying travel because I was always trying to find the ‘perfect experience’ or the ‘best spot’ that I had read or dreamed about. I couldn’t really get lost in the moment because I was busy thinking about how it didn’t quite measure up to the ‘ideal’. I have, for the most part, managed to shed that bad habit but I am still vigilant against it so it doesn’t lessen any of my experiences.
It’s impossible not to have expectations. I have read countless guidebooks, forums, blogs and books about all the places we are planning on visiting – expectations slowly build themselves. The trick will be to recognize them and allow the actual experience to usurp them. Read More
J and I bought our packs this weekend. A ‘100 Day Present’ of sorts.
We’ve discovered, as we plan on carrying everything we own on our backs for the next year, that there is much to think about when considering the pack to carry it all in.
Size is one consideration. At first I wanted the biggest bag I could carry (80L) as I worried about not having everything I might need with me. When I realized how heavy this might be I quickly switched to wanting the smallest bag (45L) possible. In the end, not wanting anything too heavy or too restrictive, I chose a bag in the mid sized range (60L). Read More
Today is 100 days until we leave…I am beyond excited.
It just seems like an auspicious number. In the States they track the first 100 days of a presidency, in Korea they celebrate the first 100 days of a persons’ life so it seems natural to mark the 100 days until we leave.
I have to confess that the trip pretty much consumes my thoughts. I mean, it’s been on my mind since we first decided and has ebbed and flowed depending on what part of the planning stage we were at, but now it sneaks into most of my waking hours and I dream about it too.
When I wake up I think of all the different places I will be waking up. What will the rooms be like? What will the beds be like? What will the bathroom facilities be like?
When eating I think of all the different foods we’ll be trying. Sometimes, when I’m eating something that is very familiar, I pretend I have never eaten it before and imagine how I might react to it if I hadn’t ever seen it before.
When I’m at work I really just think about not having to work anymore (sorry girls!). About how this event, or that meeting, or that implementation will not involve me because it will occur past my leaving date.
When I’m working out, I wonder how I’ll stay in shape while we’re away. Will walking and hiking be enough? Do I really see us doing crunches and pushups. (No I don’t…sorry Erin!)
When I’m at Spanish class I imagine myself in Peru, Chile or Argentina getting by on the language I have learned. Will I remember enough to be understood? Will just trying be enough?
When I’m with friends I think about all the new people we’ll be meeting and friends we’ll be making.
When I’m relaxing in the evening, I think of all the different ways we will spend our evenings. We will be out exploring the local area, having dinner at a local resaurant or enjoying some form of entertainment.
When I’m sleeping, I dream about it all. Sometimes my dreams reflect fears that I have, sometimes they are just blissful feelings but always I awake with a sense of awe and pride that I am actually going to do it.
100 days. It’s really not that far off.
We moved last weekend and, more than once, I found myself feeling nostalgic. Not for the condo – I don’t seem to be sad to see it go – but for Victoria. Even though we’ll still be here for 3 months and 15 days, I was already missing it.
I think it was partly the weather. It was a nice, kind of sunny, day and I was imagining all the things that we wouldn’t be doing this summer.
No riding with the Fat Bastards. We’ve ridden together most weekends for almost 10 years. Saturday would have been a perfect riding day – crisp and probably not too wet, or maybe wet, I wouldn’t have cared. I hope that we can find a bit of riding while we’re away so that I can feel that fabulous feeling when it all comes together on the bike.
No walking to downtown for no reason – even if the reason is always to stop at the pub for a pint or two. I think we’ll do plenty of walking, in plenty of towns, and drink plenty of beers that will remind us of those great unplanned afternoons at the pub.
No running along the waterfront at ‘the perfect time of day’ – for me, the perfect time of day is that magical dusky time right before dark falls. We may not run while we’re away but that magical dusky time falls all over the world.
The feeling passed fairly quickly, and it hasn’t returned since, but I think it will. I think it should. As exciting as it is to be setting of on such a fabulous journey, it doesn’t mean that I won’t miss my already fabulous life.