Travel Preparations: Managing Your Money

Planning a trip often brings about a myriad of questions, but one of the most pressing concerns tends to be related to finances. How much money do I need? What are the best ways to save? And once we have saved up, how can we effectively manage our funds during our travels? These questions can transform the excitement of embarking on a new adventure into anxiety. This article offers a comprehensive guide to managing money while traveling, ensuring you're well-prepared for your journey ahead.

Understanding how to navigate financial matters while traveling is pivotal for a smooth experience. Let's delve into the essential strategies for managing your finances, so you can focus more on exploring and enjoying your trip.

Understanding how to manage your money while traveling
How much money should I save for my trip?
Breaking down potential expenses
Effective ways to save money
How to self-finance your travels

Understanding how to manage your money while traveling

When it comes to utilizing your money during travels, there are typically two primary methods:

A) Carrying cash

Pros: You can avoid withdrawal fees altogether.

Cons: You must remain vigilant with your cash. Currency exchange rates can often be less favorable than withdrawal fees. This option can become cumbersome on extended trips, and unforeseen circumstances can arise.

B) Using cards and withdrawing cash from ATMs

Pros: You don't have to carry large sums of cash, and you have the flexibility to withdraw funds as needed, provided there are ATMs available.

Cons: ATMs may not always be accessible, especially in rural or remote areas, and withdrawal fees can be surprisingly high, sometimes reaching up to $15.

It's crucial to review your bank's policies regarding withdrawal fees and currency conversion rates. Here are two key aspects to consider:

Withdrawal fee: This may be a fixed fee (around $3-5) or a percentage of the withdrawal (typically 4-5%). For instance, in countries like Thailand, local banks might impose a withdrawal fee (about 220THB, or roughly $6), which your bank will also charge on top.
Currency exchange rate: Be mindful of whether the rate is close to the market rate or inflated. Some banks might apply an additional charge of around 1.5% to 2%.

To illustrate, if you withdraw approximately $300, you might find that your bank charges around $15 for that transaction! If the costs become too burdensome, you might reconsider carrying cash, particularly for shorter trips.

Our choice for withdrawing cash abroad

We decided to opt for withdrawing cash from ATMs, so we began searching for the best card options. Initially, we used the EVO card, but the terms changed, leading to unfavorable currency exchange rates. We revisited the market and discovered several banks offering ideal cards for travelers.

Currently, our top choices are the Revolut card, known for its reliability (plus, they offer a €10 bonus for new users!), and the N26 card.

Both cards offer a free version and excellent conditions to help you save on fees, albeit with certain limitations. We recommend carrying both options, in addition to your regular bank card, just in case one fails.

→ Check out our article on how to access money abroad without fees

If you choose to carry cash

If your trip is relatively short and you prefer to carry cash, you might wonder, where is the best place to exchange money? From our experience, changing currency at your destination tends to yield better rates; ideally at a currency exchange office within the city, avoiding airport exchanges. However, you will need some cash to reach the city! Therefore, it’s advisable to exchange a small amount at the airport upon arrival and then search for competitive exchange offices in the city.

To minimize the stress of comparing rates, you could opt to exchange currency before your trip. We recommend avoiding banks, which typically charge high fees, and instead choosing specialized exchange houses (for example, Exact Change) that often provide favorable rates and additional benefits like buying back leftover currency at the same rate, home delivery, or insurance against theft during travel.

How much money should I save for my trip?

The question of how much money you need to save is highly relative. Your travel style will significantly influence your budget. For instance, we tend to stay in hostels or Airbnb accommodations, eat at street stalls and affordable restaurants, use public transport, and strive to minimize expenses to extend our travels. However, this doesn’t mean we sacrifice comfort or miss meals when we're hungry!

Setting a daily spending limit can help manage expenses effectively. To get a clearer picture, you might find our post on expenses in Southeast Asia helpful.

Breaking down potential expenses

When planning a trip, expenses can generally be categorized into three major areas (prices are in USD):

A) Accommodation

Shared dormitory: Europe → $20-30 / Southeast Asia → $3-8 / Japan → $15-25 / USA → $20-35 / Australia → $20-30 per person per night.

Private room in a hostel/hotel/Airbnb: Europe → $50-90 / Southeast Asia → $12-20 / Japan → $50-70 / USA → $60-90 / Australia → $60-90.

B) Food

While some destinations may seem expensive, there are always ways to save on food. Consider options like fast food (e.g., in Japan, good meals can cost around $4-5), look for happy hour discounts, or use coupon apps and websites like Groupon. Don't forget that in countries like the USA or Australia, it's common for restaurants to provide free water, which can save you from additional drink costs.

As a reference for affordable dining, here are average prices:

Europe → $10-13 / Southeast Asia → $2-4 / Japan → $4-6 / USA → $12-17 / Australia → $10-15.

C) Transportation

This is a significant expense factor that requires careful planning. If you organize your travel in advance, you can take advantage of online booking offers for buses and trains in both Europe and the USA. Internal flights also tend to offer better rates when booked ahead.

Conversely, in Asia, it's often cheaper to negotiate prices for short transportation once you're on-site. Typically, buses and trains in Southeast Asia cost around $1 for every hour of travel. We try to use buses, trains, tuk-tuks, rickshaws, bikes, and motorcycles as much as possible. Also, remember that there are many low-cost airlines in Asia (like AirAsia) that frequently offer great deals; for instance, we once found a ticket for a newly launched route from Paris to Kuala Lumpur for just €190 each!

Effective ways to save money

With heartfelt gratitude, we want to acknowledge the community of locals in Barcelona who have fought to bring back affordable beer prices, making our savings journey a bit easier! On a more serious note, this past year has brought many financial changes, transforming our lavish hotel escapes into camping adventures and restaurant dinners into home-cooked meals (thankfully, Roby is a good cook!).

However, here are some additional money-saving tricks:

Do you eat at the office? Bringing your own lunch can save you up to €20-50 a week, totaling €80-200 a month = 4-10 days in Asia!

Are you a fashion enthusiast? Shop during sales, online, or at outlet stores. Remember, a true fashionista creates trends instead of following them! Better yet, try recycling from your wardrobe!

Avoid taxis: use public transport, ride a bike, or walk! Not only will this keep you fit, but it also benefits the environment. 😉

Did you buy a stationary bike you never use? Consider selling it. Platforms like Milanuncios or Vinted offer plenty of second-hand opportunities!

Always make a shopping list and shop when you’re not hungry to avoid impulse buying.

Cancel the gym membership (especially if you rarely go) and opt for running, skating, or doing weights at home!

Leave your cards at home and only take cash. If you don’t have money, you can’t spend!

Gather all your coins in a piggy bank; small changes add up!

Eat breakfast at home! Saving €2 five days a week means an extra €480 at the end of the year!

Explore free activities in your city! In Barcelona, there are countless options to choose from!

If you enjoy reading, visit the library instead of buying books.

And if you smoke, consider quitting; it will save you money and improve your health!

However, the best savings trick is to visualize what you could do with the money you're about to spend. For instance, instead of dining at a low-cost restaurant, think of the experiences you could enjoy with that money elsewhere, like 7 fried rice dishes or a romantic cruise on the Seine! You'll find that the effort is well worth it!