Honestly, I’m amazed (and grateful) that you’re here. Why? Because nobody enjoys thinking or talking about how to manage money. Finances can be the most stressful aspect of life, and this definitely applies for travel.
Traveling is a high-stakes lifestyle that can become very expensive. So, how do you mitigate the risk of losing copious amounts of money through such unpredictability? Over the past 4 years, I’ve traveled abroad and lived abroad. There are so many things I wish I had known when it came to finances and how to manage money while outside of my home country.
Here are my 8 tips for how to manage money while traveling, all curated from my experiences and what everyone should know!
Table of Contents hide
1 // have more than one bank account
3 // don’t carry all forms of payment at once
4 // use credit cards, not debit cards
5 // research foreign exchange rates
6 // keep cash on you in small denominations
7 // tell your bank you’re traveling
8 // get a debit card with ATM fee rebates
1 // have more than one bank account
They say, “Don’t place all your eggs in one basket” for a reason. This is a good practice for your personal finances regardless of your location. I wish I had diversified my bank accounts a long time ago. Why? Because if I’m robbed while traveling, but I only have one of my debit cards on me, then I still have access to money and I’m not left stranded without a penny to my name.
This way, I can leave one of my debit cards in my wallet at my accommodation, and not worry about having absolutely no money on the off chance someone steals from me. After all, pickpocketing is one of the most common crimes against travelers.
2 // get credit & debit cards with no foreign transaction fees
When I first got to Barcelona and used my debit card, I was so frustrated at how much I spent in foreign transaction fees on my coffee bill. I didn’t know how much my bank charged per transaction for international purchases, and it added up quickly.
You don’t want to end up in a place for months with payment methods that charge you in order to access your own money. When you get that second bank account I mentioned above, read the fine print about foreign transaction fees. And, for that matter, find out about your current bank’s fee structure.
Because travel is now more popular than ever before, there is greater demand for credit and debit cards with no foreign transaction fees. More banks offer them, so take advantage of this perk! It’ll save you tons of money in the long run, even if you don’t often travel internationally.
3 // don’t carry all forms of payment at once
Some may think this one’s a no brainer, but I’ve definitely left my apartment or hotel room with all my money. If you’re headed for a restaurant or just out to explore, then leave at least half of your money behind. I only take one debit card, one credit card, and some cash in small bills.
The one time I carried a large sum of cash, I was pickpocketed. Since I was making a very low wage at that time, it stung even worse to be robbed blind. Had I taken smaller bills and placed them in different pockets of my wallet, purse, and clothes, then I may not have lost so much money.
4 // use credit cards, not debit cards
Many people have concerns about using credit cards as a primary form of payment, and have perfectly good reasoning for it. Any debt can be harmful, and you have to know your capability to manage money well before getting one. But, if you know you’ll pay your bill, then get a credit card that pays you back!
I love the Chase Ultimate Rewards program, so I have the Chase Sapphire Preferred. One perk of many is that I’m not liable for fraudulent expenses. With credit cards, it is much easier to erase stolen money from your liability than with debit.
Technically, you are not liable for fraudulent expenses on your debit card. However, the process of getting your money returned and receiving the full amount is much more stressful. I speak from experience! I mean, if some thief really wanted me to foot their bill on my debit card, they could have at least went to Lush instead of a golf store…
5 // research foreign exchange rates
This one can be the difference between a $45 plane fare, and a $65 charge on your card. Most airlines and ATMs have their own exchange rate, and it rarely favors anyone but the issuer.
When I withdrew GBP from a Scottish ATM, the bank had its own foreign exchange rate, or conversion rate. I looked up the current rate on Google, and saw that the real rate was more favorable to my wallet than the bank’s. Shocker. Basically, you can accept or deny the bank’s conversion rate and opt to pay in the host country’s currency.
Let’s say you’re buying a plane ticket from Barcelona to Berlin, and you see that the airline is including their own exchange rate of $65 for a 40 euro ticket. Look up the current exchange rate between the U.S. Dollar and the Euro for that exact moment. When you look it up, it turns out the real exchange rate is $45 for 40 euros. You can forgo the airline’s built-in exchange rate by paying in euros instead of dollars, and save money.
Read the fine print carefully on plane tickets, ATMs, restaurant bills, you-name-it. You could save a lot of money by doing so!
6 // keep cash on you in small denominations
Aside from the safety aspect I mentioned above with pickpocketing, it is good to have small denominations of cash for purchases. Many restaurants, public transportation options, and shops don’t have card readers outside of the States. I’ve been with family having dinner at a restaurant in Rome with a 90 euro bill and no working card reader! This is more of an extreme case in my experience, but your average small restaurant will only accept cash.
Many restaurants don’t separate the bill for you. They’ll provide one bill for the table, regardless of how big it is, and then you’ll pay cash for your own meal. Trying to get change can be a nightmare in situations like these!
In some countries, if the cashier doesn’t have the change to give you, they won’t try to get it from other workers or a manger. It helps to carry cash in small denominations, so that you won’t need the change.
7 // tell your bank you’re traveling
If you don’t take this step, then you can forget about accessing your money while abroad. Granted, I have traveled before without notifying my bank, and my transactions have been declined because of it. Other times, I was able to use my card just fine. You never know! Just go ahead and alert them. That way, you can use your money, and nobody else can.
Who knows? Maybe someone from your hometown is trying to use your bank info without your permission and the bank would allow it if they don’t know that you’re out of town! One of my banks makes it super easy by providing a link to submit a travel notification in my online account. The other requires a call to an automated line, so both are pretty easy. Five minutes of your time can make all the difference when you’re trying to get cash out in Japan!
8 // get a debit card with ATM fee rebates
Until I did more research, I didn’t know that some banks guarantee no ATM fees. On top of that, some even provide ATM fee rebates. When you withdraw money from an ATM that doesn’t belong to your bank, you will be charged two fees: one from your bank, and the other from the ATM.
If a bank offers ATM fee rebates, they will refund you for the fees the other bank’s ATM charged you when you withdrew cash from your account. Charles Schwab, State Farm Bank, and Ally Bank are three examples of financial institutions that offer ATM fee reimbursem*nts. It is so nice to check your account and see a deposit for those pesky fees!
. . .
This is the CliffNotes version of what I’ve learned about how to manage money on the road. By following these 8 simple steps, you’ll save money and stress along the way. I wish I had known about them before that first trip to Costa Rica over 4 years ago. Use these tips to manage money, book the trip of a lifetime, and save a few bucks along the way!
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