When you are traveling long distances on little money, it’s really important to develop a system to conserve and manage your travel money.
Unfortunately for me, I’ve never been very great at budgeting. Back in my old life I was vaguely aware of the amount of money I had in my account, and as long as I didn’t run out I was happy. Yes, I did manage to save twenty thousand dollars in a year and a half, but I’m definitely no money genius.
Out on the road, I’ve been forced to get a little bit better. I make my living online now and while it’s fun it’s not really super duper profitable, so I do need to keep track of where my pennies are going. So, while I’m still no expert, I thought I’d share a bit about how I keep things under control and how to manage your travel money without going insane.
Do Your Research
What makes budgeting for travel difficult is that it’s a game where the rules are constantly changing. In every new country, there is a new standard of living, even a new currency. You have to figure out currency exchange, new bills and prices.
That’s why the first step of budgeting is figuring out what’s reasonable to spend in a new country. A cheap travel budget in Australia is an exorbitant budget for China. Ask around, read some blogs and check out hostel prices (a good rule of thumb I’ve heard is that a decent daily budget is the price of a hostel room x 3, or 2 if you’re going to be really frugal).
Curious about people’s real travel budgets? Check out our series How Much Does it Cost to Travel?
I keep my travel costs low by staying in hostels, eating cheap and using my feet as my primary sightseeing method. I do what I can to keep my costs down, but at the same time I know myself: I’d rather pay a dollar or two more for a better meal, I’d rather take a cab if it’s pouring rain and if a private room is only $5 more than you better believe I’m going to be all over that.
Don’t hold yourself to an unrealistic standard. It’s just going to make you miserable and guilty every time you step over the line (and you will – nobody can eat toast and cheese forever). Base your budget on your actual behavior, not your desired behavior. Leave room for a lapse in willpower, splurge or a special activity.
All this is to say: overestimate.
Once you’ve settled on a daily budget for a given place, the second part is to make sure you are sticking to it. It’s up to you to set up your own system for this. I’ve known people who were meticulous record keepers and those who forgot to check their bank account until it started flashing zero. I fall somewhere in the middle: I monitor my accounts frequently and occasionally tally up my daily costs to check if I’m on the right track, but I don’t obsess. Either way figure out what works for you to manage your travel money.
Prepare for Emergencies
Even if you stick to your budget precisely, things can, and probably will go wrong. Things get stolen, people get sick and then there’s that one night when the only room with a roof you can find costs $75. Don’t put yourself in a situation where a minor setback throws off your whole trip. Have travel insurance of course, and some extra money stashed away for an emergency.
They do add up after awhile. Try to stop the small gaps where your money leaks out. Food and alcohol are usual suspects, but the biggest unexpected money drain can be ATM fees. Without a good card, you’re going to get charged up to $10 a transaction. Try to find a card that doesn’t charge you for overseas transactions (they exist! I recommend Charles Schwab for Americans) and take out money sparingly.
So basically it’s all about having realistic expectations, willpower and keeping track of where your money’s going. Not the most thrilling of past-times, but anything that keeps you out there longer right?
Do you have any other tips on how to manage your travel money without going insane?