Steadfast FinancesThe Big Trip: How to Prepare Your Finances for Travel

The Big Trip: How to Prepare Your Finances for Travel

Filed in Personal Finance 2 comments

The thought of just hopping on a plane to go anywhere at a moment’s notice, with no worries or qualms, leaving everything behind to travel for a bit is a romantic, thrilling notion. However, unless you’re Donald Trump, it may be a little unrealistic. While you definitely can just fly far far away, taking a couple steps to make sure your finances are in order first will save you a lot of trouble during and after your trip.

Call in Credit Cards

Your bank prides itself on keeping your (and their) money uber safe, and this sometimes works against you. When the bank notices any activity on your cards that seems a little fishy, perhaps a few out of the country purchases, it freaks and shuts down your card to make sure that it hasn’t been stolen. For you, this can pan out to be a terrible situation.

Imagine, you’re in China, swiping that plastic left and right as your only available method of payment and it is declined for apparently no reason. That could be scary if you have no backup funds available. Furthermore, since it takes quite some time to figure out how to reinstate your card, you may just be out luck for a while, begging for coins on the street to pay for your hotel. Stop the chaos before it starts by informing your credit card companies and bank of your travel plans.

Even if you aren’t 100% set on where you are going and for how long, let them know you will be out of the country so that they know your cards haven’t been stolen. Once you book your flight and hotel, give them a heads up so they are on the same page.

Make a Budget

Seems pretty obvious but many people just save a hunk of money and go. This sets them up for financial disaster once they are abroad. When you travel, you feel free and the freedom can often lead to careless spending on random things you feel you can’t have back home.

To avoid spending your money in the wrong places, cut up your funds into a reasonable budget. First, split it down the middle and use that portion for accommodations and travel expenses (flight, buses, trains and cabs). Since you will need to keep yourself alive by eating and drinking (with a little fun drinking factored in), the next quarter should be dedicated to food and drinks. The remaining quarter is what you have to spend at your discretion on sightseeing admission prices, souvenirs and the like. Keep in mind that some countries require entry visas, immunizations and some roads have tolls. These miscellaneous expenses should be planned for pre-departure, if possible. It’s always a good idea to keep some money in reserve for unexpected expenses.

Exchange Rates

The fluctuating world economy can really do some damage to your wallet if you’re not careful. Make sure you know how the currency in the country you are visiting compares to the dollar before you visit. While some places will not cut your budget by much, others (looking at you London) will cut your spending dollars in half. One of the worst feelings when showing up to a new land is thinking you will be able to do a bunch of fun things and then realizing that the exchange rate is so high that you can only afford to do half as much. Know the rate before you go to save yourself some disappointment upon arrival.

Once your finances are squared away, hop on that plane and have yourself a jolly old time wherever you please. While traveling, make sure to pick up some great memories, since those are free.

Do have any financial travel tips that you would like to share with others?

 

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Posted by Dominique Brown   @   1 October 2012 2 comments
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2 Comments

Comments
Oct 5, 2012
9:32 am
#1 Lucas :

If you are going to be gone more than a couple weeks, you need to put your recurring bills (like utilities) on some sort of auto-pilot. It may be wise to prepay recurring bills and maybe put some advance money on the credit card, to avoid late charges or other unpleasant consequences.

Oct 6, 2012
2:06 pm

I would say you should go auto-pilot anyway.. save tons of time and money by being on auto pilot.

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