Even if you’re a personal finance geek and budgeting fiend, you’re going to want to have your bills and budget streamlined and automated as much as possible while traveling. First, for simplicity sake, and also because you don’t want to have to deal with money issues while in another country which might possibly involve you just trying to verify that you are really you, just in a tiny town in Cambodia on a crappy Skype connection.
But what are the best resources out there for round the world travelers? What’s the best way to stay on top of all your finances and pay those bills that still need to be paid while away? While this article is geared towards setting up your finances before an extended trip, most of these principles are great for all travelers to live by.
#1. Sign up for an online money management software, like Mint.com
One of the top budgeting and finance sites we have found is Mint. It allows you to keep up with all of your finances in one place by registering any account you have – car payments, mortgage, credit cards, checking and savings accounts, student loans, etc. You can sync any account you have with Mint, and they will organize and track everything.
This is great not only for budgeting reasons but also for keeping track of the bills you still have to pay while gone. Some will have more than others, but chances are you’ll still have to pay something while on the road. Mint alerts you to any bills that are due in the next month, and you can set up budgets for anything you like to make sure you are staying on track with your finances.
Not only will this help you easily keep an eye on your spending habits, it’s also an excellent way to check account balances on the road without divulging your bank account login details on random internet connections, as Mint refreshes your data from account information already saved in your account. This adds another layer of security while traveling. Remember to change your password occasionally, just in case, if you feel nervous about using a service like this.
It really is a fantastic tool for anyone who wants to keep better track of their money, and we recommend using it in your non-traveling life to manage your money more efficiently.
#2. Automation: Handling Income
In this day and age, you can automate pretty much everything, which is a great idea for those heading off on long-term trips.
Do you have any income that you’ll still be receiving while traveling? First, make sure your current employer is set up as an automatic deposit now so that if you still have a paycheck that will arrive post-departure it will automatically show up in your checking account after you hit the road. Same goes for tax refunds, rental income etc. Automate this as much as possible so that you don’t return to a check that has ‘expired’ or have to spend your travel time coordinating with friends back home to do unnecessary things like tracking down paperwork.
#3. Automation: Handling Expenses
While the internet is pretty much everywhere (you can get online after day one of the Inca Trail), there are going to be times when getting online is very difficult, if not impossible. Having the extra worry isn’t worth it, especially when it’s so easy to set up all your bills so they get paid automatically.
The key to this, of course, is making sure you have enough money in your account to make those payments. You need to come up with a financial plan. Some just have all their money in a checking account, so this would be a moot point. But for those who have their money spread out amongst different accounts, keep in mind that it often takes up to five business days to transfer funds while on the road and not near your bank, so either consolidating most of your funds into one or two accounts pre-departure or having a plan in place is essential, especially for those times when you know you may be in the middle of nowhere without internet access.
Next, any current expenses that you can automate (utilities, credit card, student loans etc) should be set up to automatically withdraw from your main checking account so that you don’t have to worry about paying any bills while on the road. While on a round the world trip this might include things like insurance, storage expense, student loans etc. Then you’ll just have a cursory monthly glance to make sure everything looks ok. Remember that you can also call up any of these reoccurring bills and most of them will allow you to switch your payment due date if it’s easier to know that all your reoccurring expenses while traveling will happen the first week of the month, etc.
The last step of automating things is to actually stop and shut some things down! This won’t apply to everyone, but if you, for example, already have a set amount of money transferring to a savings account after each paycheck, you’ll want to remember to pause this monthly transfer if you won’t be receiving income during your trip so you don’t end up with your account balances all out of wack and not have access to your money. Same goes for IRAs/investments. If you plan to delay your investments for one year while traveling, make sure anything you’ve already set up to ‘autopilot’ is still in line with your savings goals for while you’re RTW.
#5. Canceling Services & Bills – Pre-Trip
When you have a departure date, it’s time to start canceling services that you won’t be using while on the road (gym membership, utilities, Netflix etc). Set reminders as needed to verify that they did indeed get canceled and you’ve received and paid your final bills. As soon as you can get this done, it feels quite liberating.
#6. Student Loans
Many of us have pesky student loans to worry about. It’s not terribly difficult to defer them if you aren’t going to have any money coming in while you’re on the road and simply don’t have the funds to keep paying them.
If you have student loans that aren’t at too high of an interest rate and it would make your budget/life easier while you’re traveling, it might make sense to either defer or switch to interest only payments while you’re gone. Since everyone’s loan situation is slightly different, this is something only you can decide, but it might make sense to call (seriously don’t waste too much time reading about it online) your student loan provider and just ask them what your options are. Explain the situation and see what you can do.
“We decided to keep paying them while we were on the road. Yes, it did suck as between my wife and I we have a small mortgage of student loans to pay each month. But this was all part of our budget from the get-go, and we planned for the extra expense. Deferring is a nice, short-term solution, and for some, it’s the only one. You have to do what’s best for you.” says BootsnAll editor Adam Seper, who took a one year round the world trip in 2008.
Alternatively, deferring payment on a student loan while traveling can be a huge relief, knowing that you don’t have to worry about it for a year. This is a decision that everyone needs to make based on their own personal financial situation.
#7. Get a Travel Credit Card
Unless you have a serious issue with self-control when it comes to credit, getting a miles/points credit card for travel is one of the smartest things you can do. Not only is it a safer way to pay for things than a debit card or cash while traveling (like when you’re buying a flight or pre-booking lodging etc), it’s also a safety net. If your card number or card gets stolen, your account will be turned off, and you will be protected versus waking up to realize all your money is gone from your checking account. Also, most credit cards provide a form of travel insurance benefit like travel accident insurance, purchase protection, and car rental insurance.
Getting a travel credit card can also be part of your bill automation. For example, setting up your monthly bill to be auto-paid on the last day possible in FULL, and you’re using all the benefits of having a card, plus getting 30-ish days of float on that spending.
#8. Have a go-to person at home
Designate a “power of attorney” at home. Sounds scary, right? Pretty much all we’re saying is that you should have a go-to person back home who can handle anything that comes up. In this day and age of digital signatures and wicked-clever iPad apps, this probably won’t be an issue. However, if something unexpected comes up, it’s always nice to know that you have one person to email or Skype to give them a head’s up that you’re in need of a little remote assistance. And remember when picking this person, that they should be one of those people who doesn’t have time management issues. And that you absolutely trust, as you may want to give that person access to your bank accounts should you need money moved around in a pinch.
If you own a home, this is even more important, especially if you are renting it out while gone. Come up with some kind of deal and do something really nice for that person, as it is a big responsibility, and it will be well worth it should something happen while you’re on the road.
If you automate the bill process as much as you can, you hopefully won’t need this person much, if at all, but it’s important to have someone in case of a “what-if” scenario.
Now all you have to do is remember to call your bank to let them know when/where you’ll be traveling so they don’t cut off your access, and you’re good to go.