Thursday, 27 October 2016

Travelling: let's talk money

For most, travelling comes down to money.
Of course work, family, education and other commitments may play a role in deciding whether or not you can take the leap, but in reality it largely comes down to funds.

And for us, it was pretty clear. We had one year to save as much as we could, but a minimum of £10,000 between us. Ideally, we each wanted to save £1,000 for each month we'd be travelling; 6 months = £6,000 per person. In total we saved just over this; £13,000. This meant we had a rough budget of £2,000 a month between the two of us. From speaking with others we know this is more than most 'backpackers' take with them, but although we had backpacks we weren't backpacking as such. Personally, we didn't fancy hostels and budget accommodation - maybe it's the fact we're travelling as a couple and in our late twenties (or just high-maintenance) - so we budgeted enough to be able to stay in mid-range hotels.

I'm not going to go into detail on how we saved. Because it was pretty simple, we worked out how much we needed to live off each month (rent, bills, coffee...), and put as much as we could of the rest into savings. This ended up being £500 per month. Of course it isn't as black and white as this, and each situation differs, but this was how we did it. And it was the obvious stuff we cut back on; buying clothes, Starbucks on the way to work, meals out, those dangerous trips to HomeSense (seriously). Yes, all the fun stuff! But we kept reminding ourselves why we were doing it, and that the outcome would be worth it. And yes; I can confirm it was! When sitting on a beach in the Philippines, drinking from a fresh young coconut and listening to the ocean... that dress I really liked but didn't buy was the last thing on my mind.

Once we saved the money we needed to go away, we had to decide how we were going to access the money whilst we were abroad. We didn't plan on taking any foreign currency away with us, simply because we would be visiting so many different countries it would mean we'd have to carry all different currencies - such a hassle. We also didn't feel safe travelling with heaps of currency on our person and didn't want to make ourselves targets. I bank with NatWest, and after a bit of online research I found out I would be charged around 4.75% (of the value of the transaction) for withdrawing foreign currency abroad and 2.75% for using my card to make a purchase abroad.. each and every time. HSBC charges the same as NatWest for using your card abroad, but a little less (2.75%) for cash withdrawals (correct as of 2016).

Seeing as we would be spending a heap load of cash during our time travelling we didn't want to (and couldn't afford to) be charged each and every time we used our cards. A little search online brought me to the Halifax Clarity credit card; there are no fees when using abroad or withdrawing cash, and it operates in the usual way. More info on interest rates and the like here.

We also took an STA Travel Cashcard but found the exchange rate to be too poor to justify using it. It also charges £2.25 each time you withdraw cash. Madness.

Using the Clarity card really worked for us. We were able to use online banking to set up a monthly direct debit to pay the full balance each month, keep an eye on our spending and most importantly not rack up a load of non-Stirling transaction fees! It saved us heaps during our six months away and would totally recommend it.

To be clear, this post is not sponsored in any way. These views are my own. 

What else can you do to manage your money whilst your away?

I will put my hands up and say we came home with a little debt and I am no expert when it comes to budgeting. That said, there are things you can do whilst away to keep on top of your money.

Learn the currency. Basic, but it can prove tricky when you pass between several countries in a relatively short space of time. I downloaded the XE currency converter app which was a lifesaver. Once you've selected the currencies you need, it can be used offline - a necessity when you're still getting to grips with what 5,000 Cambodian Riel equates to (just under £1 as it currently stands, FYI).

Work out a daily budget. Put those GCSE maths skills to the test and work out a budget for the day. This is really useful when working out how much you can afford for accommodation and excursions. We found giving ourselves a monthly budget helped, then going down to a weekly and daily rate. It may feel a bit pedantic, but if you're away for a long time it is so important not to blow your budget early on. Living like kings might feel great in month one, but when you're sharing a bucket shower and squat toilet with twelve other people in month six it ain't so rosy. And yes, I'm speaking from experience!

Use an app. I was introduced to Trail Wallet by Sheree (if you've not checked out her blog do) - an app that helps you exactly what I said above.

Do your research. Figure out before-hand which countries will be the most expensive. We found food to be super cheap in Vietnam - you could eat incredible street food for under a quid - when we got to Bali this wasn't the case and we had to really adjust our budget. Just be prepared so you're not met with any nasty surprises.

I guess most importantly, don't let money management take away from enjoying your trip! Be it a long stint abroad or a shorter holiday, it's easy to let money, bank accounts and budgets take centre stage. With a bit of pre-planning and making the most of various apps and services, you can spend more time concentrating on topping up your tan, seeing incredible sights and most importantly relaxing and taking some time to re-focus.

As ever, any questions please drop me an email, tweet or comment below!

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