If you’re not independently wealthy or a skilled freelancer you’ll likely be forced to sit and watch the slow obliteration of your savings account as you travel around the world. The only real way to combat it and be a successful traveler is to budget your money effectively while on the road. It seems easy on paper – just form a budget and stick to it. Unfortunately, the reality is that a theoretical budget might not cover everything. Unexpected situations are as common as a Bangkok tuk-tuk and as you crunch your daily numbers you’ll find your budget creaking like a leaning tower.
To help illuminate this problem, I’ve listed 10 annoying ways money drains out of your pockets when you’re traveling – and how to stop the bleeding. I do this in hopes that it will extend your trip, or else make your return to normal hometown banking bearable.
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ATM fees – Probably the worst culprit of the traveling money drain. Yes, banks exploit travelers as if their success depended on it. The foreign transaction fee/non-bank ATM fee tag-team is like a one-two sucker punch – withdrawals from ATMs abroad will ding you on both sides (from their bank and yours) and there isn’t much you can do about it. The total cost of an overseas ATM withdrawal is between $6 and $8 for most banks. The best way to combat this is to take money out less often. It may seem excessive, but $300USD in local currency should be your go-to amount. This will reduce the need to return to the ATM, give you spending money for several days and not cause a total disaster if you lose it.
Money exchange hell – Exchange rates fluctuate wildly depending on where you change money. The best way to keep from getting screwed on a currency exchange is to have the local currency before you get there. The best exchange rates are never in the country whose currency you’re looking for, nor are they at the arrival airport. And don’t forget “Cambio/Change” kiosks have fees that will bleed you. Use ATMs for the best rates.
Being taken advantage of – When you’re from out of town (which you will be) you’re extremely vulnerable to this type of money loss simply because you don’t know any better, and it could be painful. Remember that you don’t have to let scammers walk all over you. First, arm yourself with knowledge, and assess your danger. A shake of the head should be automatic when approached no matter how compelling, uncomfortably close, desperate, beautiful or inscrutable they they are. And do not make eye contact – it’s the scammer’s “foot in the door” so to speak. If they approach you, it’s not because they’re looking to help you or get you a great deal. Just walk away.
Taxis – Sometimes we all need a ride, but taxi drivers prey on tourists the world over as if they were an all-you-can-eat buffet. First and foremost don’t let them hustle them into their cab, always make sure the cab is licensed and if you can negotiate a fare before you enter, all the better. Or else, you can skip the taxi altogether.
Overtipping – This one is easy to fall victim to. Being from a developed nation my first inclination is to tip for meals and services whether it’s standard practice or not. Familiarize yourself with tipping customs before you arrive so you aren’t nickel and diming yourself to bankruptcy. Condé Nast has the best tipping guide I know of. Take a look.
Taking the first option without shopping around – Here’s my story: I needed a new memory card for my camera (because I take too many photos). I walked into a specialty camera shop in Dubrovnik and the owner showed me his cheapest card. It translated to about $40 USD. An hour later I was in a bookstore and saw the very same card for, you guessed it, $13. The moral: just because you’re far from home doesn’t mean you shouldn’t be prudent on your purchases. It may be possible to save some serious money by shopping around.
Spontaneous tour tickets – it’s tempting to want to get on every tourist boat, gondola, cable car, giant Buddha, church tower and historic narrow-gauge railway along your journey. Yes, there are some things you should definitely pay for (ie, the trip up to the Corcovado in Rio), but there are ways to enjoy a city without paying to visit its major tourist landmark. Give yourself a set number of spontaneous tours and/or entry fees and stick to that number, like glue. Even if you’re paying small amounts, these things add up. For the record, hiking to the top of the Montmartre will give you just as good a view of Paris as the elevator to the top of the Eiffel Tower.
Alcohol – If you like the sauce, next to flights and lodging, alcohol will be your most expensive trip component. Many countries have no shame when it comes to the price of alcohol so if you want to take a huge part of your budget back, why not travel sober? You may be ostracized at an Irish pub but you’ll be the one traveling for an extra two months because of it. Not to mention you’re more likely to be robbed or do something foolish with your money when stumbling back to your hostel at 2am.
Food – It is possible to eat too much. Dining out every day can present problems to your bottom line – you’re not simply paying for the food but also for someone to bring it to you. Consider restaurants a luxury to reward yourself with. Sure they’re easy and often delicious but not necessary for every meal. Become a street cart gourmand and have supermarket picnics – but carry a knife. Spreading hummus with your index finger is a definite low.
Handy tip: If there’s an English translation on the menu under the local language, you’re probably paying more than you should.
Gifts/Shopping – Man, is it ever tempting to go shopping, for yourself or other people. Just thinking about how darling that alpaca wool scarf will look around your
mom’s neck will have your bank account cowering. Really, if you don’t need it that day, don’t buy it. If you have to have souvenirs of places you’ve been, try refrigerator magnets. They’re tiny and cheap. Just don’t get carried away. Read more about shopping while traveling here.
There are plenty of other ways to spend money accidentally while on the road. Feel free to tell us your story in the comments!