I used to think that my grandfather was so strange for walking the streets of his neighborhood with his eyes constantly scanning the ground.
“What are you doing, granddad?”, I would ask.
As he bent down to pick up some loose change on the street, he replied, “People don’t value their pennies and nickels as they should. They just let this change fall on the ground and go about their lives thinking nothing of it.”
Though now I had the answer to my question, I still thought it was a bit abnormal to pick up people’s old money. The lesson to this teaching moment hadn’t sunk in yet.
Years went by of consistently observing my grandfather’s quirky practice and I started to witness the fruit of it. Some of the loose change that he faithfully collected over the years had been added to a large water jug and by the time I graduated from high school, the saving of pennies and nickels here and there grew to hundreds of dollars to help pay for college expenses.
I was amazed!
Looking back on this experience, this was one of my first lessons in financial stewardship and one of the main reasons I am writing today on money matters for world travel. Money affects all of our lives in a multitude of ways. It serves as our means of purchasing food, buying new clothes, paying rent, investing for retirement, and of course - traveling the world. Money is indeed that medium of exchange that makes so many things in our daily lives possible.
When Charles and I survey our students at the conclusion of our programs, nearly one in every five students identifies money as the one obstacle holding them back from traveling the world. Many of them are prone to not even think about traveling to a new place all because it just sounds expensive. At WellTraveled, we are all about tackling obstacles head on and finding a way when the odds look daunting. Thus, we put together our top five, tried-and-true tips on money matters for world travel. We hope that this short list provides valuable insight on some of the more common concerns about money and travel. Let's get to it!
1. Scholars Track Every Dollar
Going back to the money lesson that my grandfather taught me - I recall that he was also the first person to teach me how to balance a checkbook. Back in those days, many people used their checkbook register to keep track of the balance in their bank account. I don’t think this method is too common today with the ease of electronic access to your bank account, but this is where I learned the importance of tracking every dollar that came in and left out of my hands. One of the most practical steps that you can take in your approach to money matters for world travel is to write out a budget for your proposed trip.
If you are unfamiliar with this tip or need a refresher, visit Charles’ post entitled Hey, Can I Borrow 150 Malaysian Ringget?. Without outlining a thorough budget for your trip, it is nearly impossible to evaluate how much money you will actually need to make it happen.
2. Stay Current on Currency
Language, culture, time zones and climate are not the only variables across the world. You will also encounter over 170 different currencies! If the word “currency” is new for you, allow me to explain. Currency is simply a form of money that varies by country and is accepted in exchange for goods and services. In the United States, our currency is the US dollar whereas in Canada and Mexico, the currencies are the Canadian dollar and the Mexican peso, respectively. Other well-known currencies include the Euro in most European countries, the Japanese Yen in Japan, and the Swiss Franc in Switzerland. If you are planning for a trip abroad, we encourage you to get current with the currency of your destination. Answering these three questions about currency will have you off to a great start for your trip planning:
- What is the destination country’s currency?
- What is the foreign exchange rate from your home currency to that of the destination country? (i.e. 10 US dollars = 7.16 British pounds)
- Will you need to exchange currency before your trip?
That last question is so important especially if you are planning to travel to a place like China where many businesses don’t accept credit or debit cards. However, make sure you are still carrying your debit card in case you need to withdraw more currency while traveling. A recently published guide by U.S. News & World Report writes that “Debit cards are much more advisable for ATM withdrawals abroad than credit cards” in order to avoid unnecessary ATM fees.
And...if you end up exchanging currency before your trip, check in with your local bank first which is where you are likely to find the best deal. Those who choose to wait until reaching the airport or even their destination often encounter poor exchange rates and other avoidable fees.
3. Hustle to Travel for Free
...or at least almost free. Believe it or not, there are organizations around the world that will pay for your trip abroad in full. Volunteering, teaching, or even studying abroad are all quality travel opportunities with ample avenues for grant or scholarship funding. A quick Google search on “travel grants and scholarships” will yield result after result detailing the hustle to traveling for free. Applying for these opportunities will take some grit and hard work, but remember that anything worth having is worth working for. Colin Powell, the first African-American to serve as Secretary of State, said it this way, “A dream doesn't become reality through magic; it takes sweat, determination and hard work.” If traveling to other parts of the world for free or close to it is your dream, the grind to see it through is non-negotiable.
4. Fly Clear of Debt
Consumer debt is becoming an increasingly popular topic in the finance world. Recent research shows that 70% of American consumers die with credit card balances, mortgage debt, car loans, and the like. The WellTraveled way of experiencing the world does not entail borrowing money to travel. We are firm believers that traveling is done best when flying clear of debt.
Motivational speaker Brian Tracy shared insight on this principle: “The ability to discipline yourself to delay gratification in the short term in order to enjoy greater rewards in the long term, is the indispensable prerequisite for success.” Imagine for a moment the peace of mind that you can have when traveling the world completely debt-free. This is why we suggest aligning your travel goals with your ability to afford them. There’s no reason to rush to fly overseas if you would be stuck paying for the trip, plus interest, for months (or maybe years) after you return. A more local trip to a cultural festival or history museum might be the better option while still providing that travel-like experience.
5. Take-Off for Savings in 3..2..1..
Let’s say that you completed your trip budget and you applied for a few travel grants, but you are still facing what looks like an insurmountable cost to travel. Remember the story with my grandfather from earlier? The one where he was picking up loose change on the street? That’s right - go ahead and start your savings jar for your trip. You will be surprised at how fast a few dollars or some spare change here and there can add up to help cover one of your most pricey expenses. You can even ask your family and friends to support you and make an investment in your travel dreams. Even if you don’t plan on taking a major trip for the years to come, it won’t hurt to start saving for it now. As they say, “Rome wasn’t built in a day, but they were laying bricks every hour.” Consistently setting aside money over a period of time for your trip will save you much financial stress whenever you are ready to travel. No matter your specific strategy, the goal is for you to start saving and to start now.
Maybe you have some additional tips on money matters for world travel - we’d love to hear them. Feel free to drop them in the comments box below and we’ll catch you next time on WellTraveled Wednesday.
Educators/Parents - Work with your students/children on identifying a country where they would like to travel in the world. Does it require a different currency? If so, help them calculate how much they will need to convert from their local currency.
Students - Your challenge is to start your savings jug. Ask your parents or guardians to help you acquire a large, five gallon water jug. Then, label or decorate it according to your ultimate travel destination. After that, it’s time to save those pennies and nickels. Start now!
Stay Educated. Stay Empowered. Stay WellTraveled.