As my location changes during my RTW trip, so will my budget, so I’ll need to have a really strong plan in place and to set aside time for managing finances responsibly.
I currently use Mint to keep all my transactions recorded in one place, and I honestly can’t believe it’s a free tool. This is totally something that other companies would charge a monthly fee for. But the budget categories I have set at home like rent, groceries, and utilities won’t transfer to traveling, so I need to give some careful thought to how I’ll adjust them.
How I keep track
My pre-trip costs – insurance, vaccines, gear, etc. – will all be paid off before I leave, so no real need to reflect them in my on the road budgeting.
My monthly income will be significantly less than I make at home, but will still be steady, so I just need to adjust that budget number once before I leave. While I’m a bit sorry to see my beloved freelance management system Elance go, the company that bought it out last year, Upwork, does have a lot of great new features, especially the ability to automate direct deposits into my checking account.
General categories that will recur from month to month, though the exact numbers may change, include Accommodations, Transportation, Food & Dining, and Entertainment. I’ll also need a Miscellaneous or Contingency budget every month for things like replacing a worn out t-shirt or restocking my supply of Band-Aids.
How I pay for things
Things like plane tickets and peak season accommodations will be booked in advance using a travel rewards credit card.
I’ll also use my travel rewards card for day-to-day spending if possible. I know, however, that credit cards are less widely accepted in developing economies. Also, credit card processing fees can be incredibly difficult for small, locally owned businesses to handle. To that end, I’ll be using cash more often than I do at home.
Well hidden in my backpack will be a small cash stash in U.S. dollars. Just enough to exchange into local currency for a flight in case of emergency. I’ll keep a few small bills and expired credit cards in a decoy wallet. That way I’ll have something I can throw away in case of a mugging. The rest of my cash – enough to cover my day-to-day expenses for the week – and cards will stay in an RFID blocking wallet.
Every Friday, I’ll find an ATM and withdraw whatever cash I need for the upcoming week. I’m strongly considering switching my main checking account to Charles Schwab, which doesn’t charge ATM fees.
Before leaving a country, I’ll exchange any leftover cash to the next currency I need at need at a bank. This way, I’ll have enough to tide me over in a new place until I’m able get to an ATM.
On the last Friday of the month, I’ll review my expenses like I do at home. I’ll have to add the step of updating my budget for the upcoming month. I may also need transfer funds from savings to my checking account at the end of the month.
Bouncing from place to place won’t be easy. Changing currency every couple of weeks won’t make it easier. But establishing a routine and making Friday money management day will.
Managing finances while traveling is all well and good, but how do you get that money in the first place? Read my top five ways to save for long-term travel.
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