Once upon a time (about 6 months ago), I thought I’d become a travel blogger. I had recently returned from 2.5 years of globetrotting and I wanted to preach the gospel of you-can-do-it-too.
But I didn’t want to be the lame-o writing about that cool experience she had in 2008. Why live in the past?
I switched my focus to personal finance writing when I realized a few key truths:
- Not everyone wants to travel.
- Everyone wants options.
- Money gives you options.
- Hence, I should write about money.
Okay, it’s not the tight logic that will give you a perfect score on the LSAT, but it was good enough for me. If traveling demonstrates one thing, its the importance of money: there’s almost no situation, however dire, that a $20 (or more) can’t solve.
But since I’ve started writing about money — how to earn it, save it, and spend it on experiences that will give your life meaning – a surprising people have written to ask me for details on how to spend it overseas.
Today I’m focusing on preparing to travel — what to do before you go.
7 Steps to Traveling the World.
1. Housing
The lease on my apartment expired during my final week of work. This was not a coincidence.
My boyfriend, who traveled with me for those 2 years, had a more complex housing situation: he owned a home. Rather than sell it at the bottom of the market, he searched Craigslist for a renter. His mortgage, property taxes and insurance come to $1,000 per month. His renter pays $1,200. He signed the tenant to a 2-year lease, hired a local to collect the rent checks, and funneled the extra $200 into an account to pay for emergency repairs and maintenance.
2. Stuff
Most of your belongings are easy to live without. Sell or donate your old books, sports equipment and 1990’s Bon Jovi CD collections immediately.
Storage units are expensive, so think carefully before you rent one: will the value of the items in storage justify the cost of renting the unit? In most cases, the answer is no. If something has sentimental value, ask a family member to hang onto it.
The week or two before you leave for a mega-trip, sell the big stuff: your mattress, desk and car. Once you do this, life will be significantly less comfortable, which will only make you happier to finally board that flight to Tajikistan.
3. Health Insurance
I purchased health insurance specifically for travelers; the eligibility mandated that I be outside the U.S. and Canada for at least 6 of the first 12 months of coverage.
The plan had a huge deductible, so it didn’t cover doctor’s visits. It was conceptually “worst-case-scenario” insurance, purchased to protect me from bankruptcy in the event of a major accident.
Not to worry, though – health care in many other countries is inexpensive and high-quality, spawning a burgeoning “medical tourism” industry. My boyfriend had extensive dental work done in Thailand that included excavating his mercury fillings and replacing them with gold. In the U.S. this would have cost him around $4,000. In Bangkok he paid $400.
While he was busy getting Novocain shot into his gums, I had a routine teeth cleaning ($35) and filled my contact lens prescription. Total cost for the eye exam plus a year’s worth of Acuvue 2 brand contact lenses? A mere $100, and that was probably a rip-off tourist price. In the U.S., my annual eye exam and one-year supply of contact lenses costs me $350 – $400.
(P.S. If you’re doubting the quality of a Thai eye exam, consider this: I knew my current lens prescription, but I didn’t tell the doctor what it was. He diagnosed me for the exact same prescription.)
4. Airfare
Many people buy round-the-world tickets, but I didn’t want to have an itinerary locked down. I wanted to roam without a plan.
I booked a one-way flight from Denver to Cairo for $700. After five weeks there, I caught a bus to Tel Aviv, spent a few weeks in Israel, but returned to Cairo since it had the cheapest airfare to New Delhi, which cost around $250.
Once I arrived in Asia, I either took buses (it cost about $20 for a six-hour bus ride from Laos to Vietnam) or flew discount carriers like Air Asia and JetBlue.
Discount carriers tend to be best when you’re flying within a continent. For intercontinental flights, frequent flier miles are generally the best route.
I flew to Spain for free on a previous trip using miles I racked up through normal spending on a credit card.
Today I hurl all my daily spending onto a frequent flier rewards card – groceries, gas, trips to Target. At this moment I have around 50,000 miles, enough to get me to sub-Saharan Africa (though not enough to get me BACK from there).
5. Books
I carried about 10 pounds of books on my back at all times. Many of the places I visited were remote, off-the-beaten-path locales where it was tough enough to find electricity, nevermind finding an English-language book exchange.
Whenever I’d resurface in Phnom Penh or some other popular tourist spot, I’d load up on books, cramming them into my overstuffed backpack. To reduce the weight in my pack, I’d rip the covers off.
The minute I returned from my trip, someone invented the Kindle. Drat. Owning an e-reader would have changed everything. Oh, what a difference two years makes.
6. Banks and ATMs
Do yourself a favor: avoid any bank that will charge you a whopping 3 percent fee for withdrawing foreign currency. I kept my money in a nonprofit credit union, which charged a 1 percent fee. If I were smarter I would have held it in a Charles Schwab account, which charges zero.
7. Money Belt
A “money belt” is a small, zippered pouch that you can wear under your clothing. It is one of the most important items you will own.
Keep most of your withdrawn money, your ATM card and your passport in a money belt tied low around your hips (that’s a polite way of saying “in your crotch”.) Keep a wallet with no more than the amount you’ll need for 1-2 days of expenses; in most cases, a wallet with $20 – $30 is sufficient. Use this wallet when making everyday payments, and replenish it only in the privacy of your room at night. This wallet is your decoy. If you get pickpocketed, you’ll only lose a small sum.
When credit card offers come in the mail, save the “dummy” credit cards (you know, those cardboard cards embossed with “Your Name Here”). These dummy credit cards will make your decoy wallet look more authentic. If you’re keeping your ATM card in your wallet, then you’re obviously not wearing a money belt, right?
This is great information for anyone traveling not just round the world nomadic types. I found it incredibly informative.
@cashflowmantra — Thank you! Yes, some of the points in here (like the money belt) are also good tips for those who are going on shorter trips! (And throwing away your Bon Jovi CD collection is probably a good tip for everyone, no matter what your plans!)
I use the money belt as well when I travel. I also use a decoy wallet just in case I get into questionable part of the visited country.
If you are not familiar with the foreign land we tend to spend more to avoid harassment, so researching the place in advance has a major role in saving money
Ripping the covers off books! Absolutely!
I can tell you how many Lonely Planet books we have ripped up. After visting a section, we often tore those pages out. Considering that we travel so much by bicyle, we had to!
I have an “exotic” post coming up in about a week’s time Paula, and another one to shortly follow it. I think you’ll like it.
I’m taking a page out of your book by adding more personal stories to my finance blog. It’s a heck of a lot more fun anyway!
Thanks for the great read Paula!
@Andrew — My first few posts on this blog were very fact-oriented, almost like I was writing for a textbook. As a newspaper journalist, I was trained to “remove myself” from my articles so that everything I write is devoid of personality and just sticks to the facts. But in the blogging world, the opposite seems to be true: people are interested in the human element of these topics. Readers can get cut-and-dry financial information from a textbook. Online readers seem to want to know the full and personal story of the people writing this information.
Sometimes it depends on the audience, I guess.
I published a number of articles on Warren Buffett for some finance magazines about ten years ago. I was so proud of them (still am) and I was paid well for them.
But something interesting happened. At one point, a magazine editor was writing about people who had “made it” financially. He was profiling them as part of a feature spread.
Then one guy decided at the last minute that he didn’t want to be in the magazine–he decided to keep his life private. So the magazine editor called me and asked if I would write a story about myself: a 3000 word feature. It was bizarre and I was self-conscious about it, but I got over that.
I told him that I was going to be traveling on some Malaysian islands over the following ten days, and that I wouldn’t have time to do any editing with him. But he wanted it anyway.
After reading it, he asked me to extend it to 4000 words. I hardly had any time to write it because I was traveling with my parents. In total, the 4000 words probably took me just 4 hours to write….maybe 5 hours, max. I wasn’t proud of it because I wasn’t able to spend much time on it.
But they paid me $4K and the article was nominated a finalist in a national magazine award. From that point on, I realized the power of personal narration: something that can connect with readers. And the magazine editor told me that “first person” pieces were always the most popular.
I think that’s what most people really want. A human face and story to connect to. Culturally, all humans are story tellers…and listeners.
I suggest that I “learned” that then. But like you, I also wrote many “textbook” blog posts. You have reminded me how to make better connections. And it’s a lot more fun.
@Andrew — Wow, that’s incredible! A finalist for a national magazine award … that really means a lot.
4,000 words on yourself can be hard to start, but once you begin writing — as you said — it can be easy to keep the ball rolling. After all, you know every nuance of every decision … and there are so many ways to tell the same story, depending on the angle you want to take (emphasize the hardships? The triumphs? etc.) Did you write about your own financial health and/or your financial narrative?
You’re right; culturally, we all learn through stories. We’re natural storytellers. When I wrote for a newspaper, my editor would never allow us to say we were writing an “article.” We always had to be writing a “story.”
Of course, back then, the story was about someone else. Now it’s about myself …
Hey Paula,
In the narrative story, I was writing about a mechanic I met when I was 19. When I met him, I was working at a bus depot (among other jobs) to pay for my University education. I was the first member of my family to ever go to college. But my parents didn’t have the financial resources to help out, financially, and I didn’t have the grades for a scholarship, so I picked up money wherever I could.
Anyway, this mechanic really was a self-made millionaire…and strangely, a total snob. We worked the night shift together, and it wasn’t a busy job. We had loads of time on our hands, so he decided to teach me about money the second summer we worked together. Incidentally, I don’t think he even spoke to me during the first summer we worked together!).
Anyway, the gist of my story revolved around the lessons I learned from him, and then how I applied them from age 19 to 35.
When the magazine editor saw how popular the story was, he suggested that I write a book.
I toyed with the idea, but never got around to it until after I was diagnosed with bone cancer (age 39). After my surgery–three ribs removed and some of my spine–I had some extra time on my hands. I wasn’t going anywhere for a while (naturally!) so I started to write the book.
It’s getting printed and bound in Singapore today, coincidentally.
And you haven’t joined my facebook “like” page yet! http://www.facebook.com/millionaireteacher
As for the cancer, I am doing well now. I can run again (I love to run competitively) and I can ride my bike–although I have to be very careful about falling. The last time I fell, while running, I broke two ribs. That’s what happens when your body is a bicycle wheel that’s missing a few spokes. The spokes that remain have a higher stress load on them.
@Andrew – I love your story about meeting the self-made millionaire mechanic; it almost has a “Rich Dad Poor Dad” quality to it.
A lot of people in the personal finance world struggle with the question of an early mortality. Since all our investments are designed with the assumption that we’ll be wealthy when we’re in our 60′s, 70′s, 80′s, and beyond, many people in the personal finance community struggle with the idea of what happens if we pass away in our 30′s or 40′s. You should consider posting about that …
I admire your ability to keep on traveling…10 days is the longest I have traveled in a stretch. I really like to keep it short, around 5 days. See a couple of things…then go back to my normal life!
@SuperFrugalette — Going elsewhere for long periods of time is a great way to “immerse” yourself in the culture (you start to ‘think’ and ‘count’ in the local language, crave the local foods, etc.) but it can also be exhausting! Sometimes I really enjoy having quick weekend getaways … and then returning to my normal life on Monday! Both are great for different reasons.
I hope you’re joking.
@ Andrew — I hope I didn’t offend you! I’ve read several articles and blog posts that touch on the intersection of financial planning and early mortality. A lot of these are thoughts are expressed with phrases like “I want to die broke” or “You can’t take it with you.”
A few examples of things I’ve read:
#1) Money Magazine did a profile of a couple who – although now prolific savers – had to overcome the wife’s initial anti-saving attitude:
“I’d say, ‘We could die in a car crash tomorrow, so let’s enjoy ourselves now!’
http://money.cnn.com/2008/08/15/pf/millionaires.moneymag/index.htm
#2) MoneyNing touches on this topic in his post, “Money Isn’t Just for Hoarding”:
“Neither of us care about leaving a fat inheritance for our son … Instead, we want to be able to enjoy a few things now …. what good is having all that money later if we never actually use it?”
http://moneyning.com/money-management/money-isnt-just-for-hoarding-its-for-spending-too/
#3) Get Rich Slowly featured a letter from a reader who struggles to balance saving for the future with enjoying her money while she still can:
“As we watch friends and relatives succumb to cancer (mostly) in their late sixties, I wonder about our financial goals. … When I look at our retirement accounts, it never looks like enough … If we reach 70, I don’t want to do so without having traveled to places we’ve talked about seeing.”
http://www.getrichslowly.org/blog/2011/06/10/ask-the-readers-im-getting-older-should-i-save-or-should-i-travel/
#4) An annunity website, in a post “Die Rich or Die Happy,” touches on this:
“the best time for consumption is during youth … Dying on retirement day would be less than a grand tragedy because life’s principal purpose would already have been fulfilled.”
http://www.freeannuityrates.com/blog/2010/03/die-rich-or-die-happy/
#5) This blogger writes with emotion about her father:
“One thing I learned about my father’s passing is that no matter how much we accumulate here on this earth…it’s the memories we take with us … Plan for your future (retirement, paying off the bills) but at the same time remember to simply enjoy life.”
http://marianna68.wordpress.com/2011/07/12/cant-take-it-with-you/
#6) There’s even a quote about it on The Simpsons:
Financial planner: It doesn’t look like you’ve been saving anything for the future!
Wiggum: Well, you know how it is with cops. I’ll be shot three days before retirement. In the business, we call it retirony.
Planner: Well, what if you don’t get shot?
Wiggum: What a terrible thing to say! Oh, look! You made my wife cry!
—The Simpsons
Didn’t know Andrew was so busy over here!
I really like the tip about the money belt. This is something I do, too, though on my next trip I think I’m going to be leaving most stuff in the safe and even my money belt is not going to have too much on it.
No worries Paula!
I’ll write about the threat of early mortality when I’m 80.