Sunday, November 27, 2011

Money Management Part II: It's all about the Lincolns

As I discussed in my last post, one of the most stressful parts of traveling is budgeting your money. Usually when I travel, I feel like money is just flying out of my hands left and right which is not a pleasant feeling at all. This stress can usually be mitigated in two ways: 1) by effectively tracking your spending and 2) by spending less.

Since I usually spend around $20 or less a night on lodging, every sent cent counts when traveling. This means looking for ways to cut costs for all possible travel expenses. There are a few ways that I've found to be effective:

1. Don't Eat Out
Just like at home, when you travel, if you eat out a lot, your cost of food will be high. It's a better idea to "cook" your own meals. Obviously most cooking isn't possible while traveling (unless your hostel provides kitchen facilities), but that doesn't mean you can't make some of your meals. If you're coming from home, I try to bring a few things that I know will travel well that I can eat. Usually a box of granola bars and a jar a peanut butter. Once you're on your trip it's easy to buy bread and jam and some fruit to supplement what you brought. This will usually get you several meals for just a few dollars or less each. It helps to bring a few other things such as a plastic knife, napkins and a water bottle (for countries where the water is drinkable) to avoid purchasing these items on your trip.

Although it's kind of pain, I usually end up carrying around a plastic bag full of food during my trips. Not only does this mean several cheap meals, it means I can eat wherever is convenient and easy and not spend a lot of time looking for a restaurant.

2. Take Advantage of Free Food
Many hostels provide free breakfast or even "tea time." If the place you're staying has this option, make sure to advantage of it - you're already paying through the cost of your room. This may mean waking up early, or working your plans around it - but it's usually worth it. Also, if your plane ride or train ride includes food, make sure to plan your meals around this schedule and to save anything that you could eat later on. Take your plane provided crackers in your bag might mean saving a lot of money when you're hungry for a snack at the airport later.

3. Familiarize yourself with hidden fees and perks
Before you ride an airline, or stay in a hostel, make sure you check up on what they offer or charge for. You don't want to show up at the airport only to find they always charge for checked baggage - or find out that your hostel charges a dollar a night for towel rental. If you know ahead of time you can pack light enough to carry on, and bring a small cheap towel for your use during your stay. You might also find out that your hostel offers perks that will help you save money - for example, some have free airport pick up which means you don't have to take the train. They might also offer free WiFi, which  means you will save money on Internet cafes by packing your IPhone.

4. Use to learn public transport
Like #1, this tip is true at home as well as abroad. Using public transport will save you money that you might have otherwise spent on cabs. Taking this a step farther, public transport will also help you to get away from the tourist areas to places where food and drinks will be cheaper. Anything for sale in the town center will be marked up, and you can by traveling a little out of the way you can find discounts.

5. Pay Smart
The reason I always pay in cash when traveling is because most credit cards have a foreign transaction fee - and it can sometimes be large. Even small fees add up overtime. Make sure you know your bank's fees and work to avoid them during your trip. This means not using credit cards and avoiding excess ATM withdraws. Some banks and credit cards have better travel fees than others - it pays to research the best option before you go.

Do you have any good money saving tips? What do you end up blowing your budget on when you travel?


Rob said...

Excellent advice.

One other thing I'd add is a message I got from Warren & Betsy Talbot's book "Dream, Save, Do".

Plan in advance, as best you can, how much money your travels will cost. You're already doing this with the double & add $300 suggestion in part #1.

But now, 5 months before your trip, start looking at everything you buy as "X days of travel". $4 latte every day? In 4 months that's FOUR $100 travel days. Buying a $20K new car instead of a $10K used one - the SALE TAX on the difference is 8 $100 travel days. The $20 movie? Lodging for one night while traveling. Etc. I am here to tell you that when you look at everything in terms of what you're giving up in 4 or 6 months the latte won't taste as good and watching a DVD is much more interesting than going out to a movie.

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