Things you need to do to prepare your finances before you travel

There’s nothing worse then coming back from traveling or vacationing with no money left in your pocket, or even worse, in debt. No matter how well you think you will budget during your travels, more often than not people come back home with shattered bank accounts and maxed out credit cards. Not that it makes it any less worth it to have gone, the experiences you will carry with you for the rest of your life are of course priceless, but bottom line, no one likes to be broke. Ask anyone who’s been backpacking why they decided to end their journey to return home. I guarantee 95% will give you the same answer, “ran out of money”. Sad but true many of us deplete every last monetary resource before giving in to the inevitable return home. A surprising amount of people end up without a single a penny to get themselves home, this is when the phone calls to mom and dad start pouring in. All of this financial chaos can be easily avoided by following these 8-steps before you embark on your adventure.

1. Come up with a ballpark figure

Come up with a general idea and number of how much money you will need to bring with you.

2. Now, double that ballpark figure

This is how much you will actually need. What you think you will spend and what you will actually spend are two completely different things. This is directed more toward first time travellers, weathered travellers of course will have a better idea of how much they are comfortable living off of.

3. Set up a savings plan

A very good system is to have two separate accounts for when you travel abroad, one for daily expenses like food, toiletries, public transit, partying, etc. And the other for accommodation, long haul transit, and sightseeing (this could mean anything from a pass to a zoo or national park to bungee jumping or skydiving). You will need a larger budget for the latter.

4. Use a credit card

I actually encourage the use of a credit card, not as an extra source of funding but it makes it easy to track your spending. Use it to pay for accommodation, long haul transportation, and sightseeing. For things like booking flights and hostels you will likely need to use it anyway. The money allocated in you second account should be used to put directly on the card after the purchases are made. The use of online banking makes this very easy and wherever you are traveling there is usually a way to access the internet. This is a good method of payment because it limits the amount of time you are carrying around a bunch of cash. Also, your bank cards aren’t always compatible with the handheld debit machines in other countries, credit cards work pretty much everywhere.

5. Book your flight

Once you’ve decided where you want to go you can start looking into booking a flight. Although the excitement will have you jumping on the first flight you see, be sure to check out several different airlines and travel websites. Certain days of the week are cheaper to travel on, see what kind of special offers various airlines have. If this is your first time traveling make note of how many layovers are on your route. It may be worth the extra $100 to get a more direct flight, it can be overwhelming having several transfers in foreign cities.

6. Air passes

There are a few different air passes to choose from. You can book a single flight at a time, but there is also something called Round The World (RTW) airfares. This is a great thing to take advantage of if you plan on traveling to multiple cities. This alone will save you thousands of dollars on flights. There are usually several sample itineraries to choose from, but they can customize them to suite your desired locations. Another great money saver is the Multi-Stop Air itineraries.

How it works is you choose your point “A” to point “B”, they book the flight but include several stopovers along the way. Once you leave your first destination, all subsequent flight times can be changed, sometimes with a small fee, but other times there is no penalty at all, this usually is the case if it is switched within a certain timeframe. One thing to note is that you cannot change the cities, only the times. So really all you are doing is extending your layover in a particular city. The ticket is usually left open for a year, so you can extend your time in multiple destinations so long as you reach your “point B” and board your return flight before the year is up. (In 2006 I purchased a return ticket from Vancouver, Canada to Auckland, New Zealand with stops in Tokyo, Japan; Bangkok, Thailand; Singapore; and Sydney, Australia. It only cost me $1600cdn, $2100 after all the taxes and insurance.)

7. Discounts!

Yes they are out there and easy to find. There are loads of perks for youth travelers 26 and under, as well as students, and even teachers. You can purchase your IYTC (international youth travel card), ISIS (international student identity card), or ITIC (international teacher identity card), online or at most of your local travel agents offices. These cards entitle you to discounts on flights, trains, busses, hostels, hotels, museums, shopping, bars and restaurants in 106 countries! It also gives you access to a 24 hour multilingual emergency help line. It only costs about $25 and will save you hundreds.

8. Travel cuts

Now this was my secret weapon when I traveled overseas. They have offices all over Canada and a rather remarkable website. I booked about 95% of my accommodation through their website over the span of seven months. They have the best prices that I have seen thus far. When I first arrived in Sydney, Australia my friend and I made our way to a popular hostel at Kings Cross. When we were told the rate per night I remembered seeing a different price on the Travel Cuts website. They wouldn’t give us the price I had mentioned so we made our way across the street to use the internet. We booked it online through and minutes later we were back at the front desk with the conformation number for our booking. We paid one third less. That is a huge savings.

There are plenty of other money saving tips out there that I recommend you take advantage of, but these eight points are major money savers and will put hundreds or even thousands of dollars back into your pockets!