Setting off on a long trip overseas or a round the world adventure can be one of the most exciting highlights of your life. For that reason, it can be easy to get caught up in the excitement and overlook some of the more tedious aspects of long term travel around the globe and to far flung destinations.
While most long term travellers, gap year backpackers and permanent digital nomads spend plenty of time planning their trip and whittling down their packing list while sketching out an itinerary, things like insurance, vaccinations and finances can easily be put on the backburner until they become a problem.
Sure, you’ve probably saved up a nice lump sum and worked out a rough daily allowance, but have you considered the finer details surrounding managing your finances while travelling the world? This guide should hopefully highlight a few items you might’ve overlooked when planning your financial activities while on the road, along with some handy tips and solutions.
Are You With the Right Bank?
While living in your home country, your current bank and the account you hold might’ve been meeting your needs perfectly. But now that you are hitting the road, and heading overseas, that bank might not be the best choice.
As you will be using your home bank account to withdraw money in foreign countries and in their corresponding currencies, it is important that you find a bank that has no or low international fees. As you want to avoid carrying a large amount of cash with you at any one time, making frequent trips to the ATM will become a regular occurrence during your travels.
If you happen to be a customer of a bank with high international fees, then each time you make a withdrawal away from home, you will be losing money over and over again. Some banks will charge a foreign exchange fee for the privilege of withdrawing your own money. It’s also not uncommon to find a cash withdrawal fee has been added on too.
As these fees are usually a percentage of the amount you withdraw, there is no easy way to avoid paying them on your transactions. If you think about how often you will need to access your money while on the road, you can easily see how quickly these charges will add up and how much money you would be losing out on over a long trip.
As it’s more difficult to open a bank account once you’ve already set off on your trip, make sure you do your research before leaving and find a bank that offers the lowest, or no international fees. While you are doing your research, you should always compare bank accounts and not rely on the advice from well-meaning friends.
Managing Direct Debits
If you do change bank accounts then it is vital that you ensure your direct debits are in order before leaving. Even if you don’t change banks it is still a very good idea to inspect the regular payments that have been authorised to be taken from your account.
Cancelling any recurring payments before leaving is a great way to prevent your finances being eaten into while on the road. This could leave you in a tight spot when an unbudgeted for payment is taken from your account. Gym membership, DVD rental clubs and personal subscriptions are prime candidates for being cancelled or put on hold before leaving. Make sure you talk to the provider first, and don’t simply cancel the direct debit in case you are breaching your contract.