Keeping on top of your finances on the road can be difficult. You’ll have money coming out for accommodation, living expenses, excursions and everything else in between. With all the spending and little-to-no earning it’s easy to blow a month’s worth of spends in your first week on the road, leaving you high and dry for the next three. In this short guide, we’ve outlined a few simple ways to manage your finances effectively.
It may seem like the most simple thing, but it’s so important. Research how expensive your destination is and work out how much you can afford to spend during your time there. If you’re travelling in Asia, your hard earned dough will go much further than in, let’s say, Australia. Regardless of where you are planning to visit, you should budget accordingly. It helps to write out a plan of where you are visiting, and for how long. Compare this to your savings and you can get a fairly clear idea of how you’re going to manage. Within your overall budget, always keep an emergency fund for unexpected expenses such as missed flights and unforeseen medical bills.
How to spend your cash?
One of the biggest challenges when travelling abroad is working out how to most efficiently spend your money. Exchanging money before you leave for foreign currency is OK, but if you plan to spend any length of time in one country, it’s not wise to carry large values of cash. You can withdraw money when you’re abroad but expect your bank to charge you for the withdrawal, as well as giving a pretty poor conversion rate. Using your debit card for transactions can also end up being expensive after your bank has charged you a small percentage on the transaction, as well as an overseas transaction fee.
Another option is getting a pre-paid travel money card for the country you are visiting. You can load money onto the card from your current account and then spend without the charges. Unfortunately, withdrawing money from an ATM still comes at a price and the exchange rate you get through the card provider may not always be the best. But you can be safe in the knowledge that all your cash is safe in the bank. The Post Office provides a really useful service and you can load money, check transactions and get help through a simple to use app.
Finding ways to share the cost of things is a great way to save money. By sharing the load of more expensive things, such as excursions, accommodation and transport, you could make your money go so much further. Travelling with a partner is by far the best way to save money in our opinion. You can split everything down the middle, effectively halving the cost of your trip. If you’re travelling alone, try to meet people who are up for sharing lifts, splitting costs of trips and even cooking together.
At first, you might not feel comfortable haggling. You may even feel a little cheeky. But in many countries, bartering is the norm. If the price isn’t clearly displayed in a shop, assume that the proprietor is open to negotiations. The vendor will normally start with a price far higher than he expects to receive, you should then respond with a price much lower than you are willing to pay. This back and forth will continue until you meet in the middle and one of you, at least, is happy. Once you get the hang of it, it’s actually a lot of fun.
Have a backup
It’s unlikely to happen, but occasionally things can go wrong. Your wallet could be pinched, or your card could get cloned and emptied in Bali (true story), leaving you high and dry on the other side of the world. It’s always good to have a backup option if things do take a turn for the worse. Keep a credit card stashed away for those times when you really need it or when you’re low on funds and really need to get somewhere. Most of the time you’ll have a friend or family member that will help you out, however, it might not always happen. As a last resort, if you need cash fast, quick loans are an option. You should always explore every other avenue before taking a loan, and always make sure you can pay it back as soon as possible before you agree to anything.
With a little forward planning and some careful penny pinching, you can make money go a long way on the road. Once you’ve entered the mindset of a frugal traveller, you’ll be surprised how long you can make £100 last.