Budgeting & Money

Budgeting & Money Cash & ATM's Credit Cards

Your money is undoubtedly the most important component of your trip. Without it you wouldn’t be going, and if you run out or lose all of your money while you are traveling, your trip might be in jeopardy. Not only is budgeting so that you have enough money for your trip important, but planning ahead, getting the right bank-cards and knowing how to handle your money internationally can save you huge amounts of money.


Planning the financial aspects of your trip and figuring out how much money you are going to need is an important part of any travel experience. By crunching some numbers, you will have a better idea about how much money you need to save up to make your trip possible. A financial plan is essential to the success of your trip.

Your budget should be considered long before you leave. Knowing approximately how much money you will need gives you an idea about how much you will need to save. You must set a goal well in advance so that it can be reached by the time of your departure. Planning ahead for your budget isn’t very difficult. Consider the following expenses:

Biggest Cost Factors

  • Your Route and Speed of Travel: Traveling slowly, going overland and minimizing the number of flights will greatly decrease your expenses. Air tickets will be one of the most expensive parts of International travel. Ticket prices vary so much from day to day that you have to be constantly watching for deals and bargains as they come up. Your airline ticket purchase allows for the greatest opportunity to save money if done properly.
  • Which Countries you Visit: Developed countries like Australia, Europe, Japan and the United States will double or triple your daily budget compared the the developing world. You can travel for $25 a day in Southeast Asia, but this will increase to $75 or more per day in most developed countries.
  • Where you Stay: Your choice of accommodations leaves room for financial flexibility. Hostels are obviously your cheapest bet and are actually quite affordable. But there are even cheaper ways to sleep than hostels. A nice, clean budget room in Southeast Asia can be had for $15 / day, while a luxury hotel room can set you back $250 / day. Stay at one of the top luxury resorts… then expect to shell out over $1,000 / night.
  • Where you Eat: Deciding on where you eat and what you eat will change your food budget considerably. Buying your food at supermarkets and making it yourself will be cheaper than eating at tourist-type restaurants all the time. Alcohol can be another expensive food purchase, if you can call it ‘food’. Food stalls and mom-and-pop restaurants are perfectly safe so long as you take a few safety practices and can be a window into the local culture.

Planning Your Budget

To figure out how much money you will need, you must first consider where it is you are traveling to. Much of the world is quite inexpensive, but there are places that will drain your wallet faster than others. London, anywhere in Scandinavia, and Japan are some of the most expensive places to travel in. On the flip side, you can live and travel in parts of the Philippines for a couple of dollars a day.

Next, break down your expenses into initial costs and daily costs. Initial costs include your airline ticket, your backpack, passport, guidebook and all equipment purchased before you leave. Already have some of this stuff? Can you borrow any of it from friends? If so, you’re saving money already. If you are headed for Europe, a Eurail pass would also be a wise initial expense.

The next thing to consider is how many days you will be away. Obviously, the longer your trip, the more money you will need. Now you can figure out roughly how much you will spend on the following each day: accommodations, food, transportation and sight-seeing. A typical low-cost budget for one day in Southeast-Asia might look like this:

Item Cost
accommodations $20
food $16
transportation $4
sight-seeing $5
total $45

You can now multiply your total daily budget by the number of days you will be away. For example, if you were to be gone for one month (30 days), your total cost would be around $1800, just for daily expenses. Then add on your initial costs to get your total budget:  daily budget x number of days + initial costs = total budget

Remember that these prices are only an example and that your daily budget will be an average. Obviously you won’t be paying for entry-tickets everyday, but $5/day is a good average. Prices are so variable everywhere you go that a daily budget could be half this (or double). Check your travel guide to get a good idea how much your accommodations might cost. They usually list visa prices as well. And don’t forget to allow for any extra expenses.

Credit Cards and Cash

Your money is undoubtedly the most important component of your trip. Without it you wouldn’t be going, and if you run out or lose all of your money while you are traveling, your trip might be in jeopardy. You also need a strategy for dealing with money while on the road.

Cash: Although easy to use and always accepted, cash has one major drawback — once lost or stolen, it cannot be replaced. It is a 100% loss of your funds. And this is the great strength of cash alternatives like ATM cards. If they are lost or stolen, they can usually be replaced within a short period of time and with a minimal financial loss. Carry little money and stick with ATM and credit cards for this reason.

More on Traveling with Cash and Using ATM’s

Credit Cards: Credit cards are an excellent way to pay while you are away. They offer a virtual bounty of money at the blink of an eye (assuming you don’t already have your card maximized) to cover any financial emergency. But today’s credit card programs offer much more than just accessible money - Credit card companies can serve as a travel assistance service, help if things go wrong during your trip and offer emergency transportation and medical assistance.

More on Travel Credit Cards

Picking the Right Debit and Credit Card

Which credit and debit cards you use on your trip can actually have a dramatic impact on your budget. There are a lot of travel cards that can not only save you a lot of money, but also earn you reward points that can be very valuable. There are several things to look for when choosing a card:

Withdrawal Fees: This is a big one - If you withdraw from an out-of-network bank, most ATMs charge a fee. Added to this, many banks will charge a withdrawal fee as well. This can really add up quickly, especially if you make many smaller withdrawals. It is important to research your bank fees before-hand and get cards that minimize these fees. Schwab in the US not only has no withdrawal fees, but reimburses you for any foreign withdrawal fees.

Transaction Fees: Many cards tack on a 1% to 3% foreign transaction fee to the price of what you buy which is terrible for longer-term travelers. Again, it is important to research your bank card ahead of time.

Blocked Countries: Some smaller credit unions will flag or ban some countries because of high fraudulent activity. Other banks are just more internationally friendly. It is important to carry two separate bank cards just in-case this happens so you have an emergency backup till you sort out why your other card is blocked.

Online Banking: Make sure you can access your account from abroad and handle any issue from overseas. Some companies will only replace a lost card in person or ship it to the address on file, which can be impossible to get if you are away in another country. American Express is great in this respect as they can replace a card at any of their extensive international offices.

Not only is carrying more then one card important (in-case something goes wrong with one of them) but carrying different brands (Visa, MasterCard, AMEX) is important as some countries mostly accept just one brand. Visa and MasterCard are the most widely accepted.

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