How To Plan Your Finances As A Traveler

Many people wonder how do travelers and nomads afford to travel around the world. Each traveler does this differently, and while we occasionally travel on a shoestring, these days, it is no longer the norm. Instead, we plan our finances and save for each of our journeys. This page has some of the tips and tools we have found most helpful and is designed to help you plan your finances as a traveler. Let’s dive in.

Getting started with financial planning for travel

Before you jump into downloading a budgeting app or make drastic cuts, decide what your priorities and goals are. Do you want to travel? Are you looking to save more for retirement? Do you want to buy new clothes? Saving for a home? College funds?

Creating your financial goals is an important first step. If you don’t know what you want to do with your money, your spending will be all over the place. Use our planner below to help you set up these goals.

Financial-Goals Download

Now that you have some financial goals planned out let’s figure out how to manage and reach them.

Managing Your Finances

Plenty of tools are available to you, but first, we recommend reading a book about financial planning. Our favorite is I Will Teach You To Be Rich by the knowledgeable (and hilarious) Ramit Sethi.

I Will Teach You to Be Rich focuses on several factors of financial planning, from automating your finances so you can cover your basic needs to how to pay down debt, save and invest (it’s all aimed at complete novices, so don’t worry). Across his content, Sethi advocates for cutting mercilessly into the things that are not as important and spending extravagantly on what matters the most to you; the things that make your Rich Life.

Despite the title of this book, it’s not a get-rich-quick scheme but instead an approach to being responsible with your finances short-term while enjoying life now. You can learn more about Rami on his site, IWT.com. We highly recommend downloading a copy of his Conscious Spending Plan to run your budget allocation.

You can buy Ramit’s book and journal on Amazon), follow his Instagram for great conversations on money, or listen to the I Will Teach You To Be Rich podcast on Spotify: It’s a fantastic mix of money coaching and couples’ counseling.

Saving for travel

Once you factor in airfare, accommodation, meals, attractions, keepsakes, ground transportation, etc., you may be looking at a large expense depending on where you’re going and how luxurious you want your trip to be. Saving ahead of time can help you ensure you can prepare financially for future travel.

Here are some suggestions for saving up for travel, whether it’s a specific trip you’re planning or if you want to have money saved up in general for travel:

1. Sinking funds

You may have heard about the concept of sinking funds. In simple terms, you’re saving up a large amount of money for a specific event, which will be used up completely. This savings strategy could be great for home renovations, a car purchase, elective surgery, or a new large appliance, for example.

We recommend saving this money in a high-yield savings account (HYSA), which pays higher interest rates. Here are some recommendations:

Ally: We’ll speak about Ally in more detail below, but Ally offers every financial service a traditional bank does.
American Express: If you have other AMEX products, opening an HYSA is straightforward. You can manage your savings account with any other products you may have with AmEx through the same app.
Marcus by Goldman Sachs: Only available in the US. Like Ally, Marcus offers all the services traditional banks provide yet was among the first to offer high-yield savings accounts.

2. Using buckets in Ally for savings goals

Ally’s buckets help you keep your money organized as opposed to just dumping all your savings in one lump sum in one account. You can name your buckets with a specific goal and set target savings amounts for each. Seeing a visual as you get closer to a specific savings goal can keep you excited and motivated.

In the past, we’ve saved in buckets to buy a car and for specific vacations. Right now, we are using buckets to set aside our computer stipends for when it’s time to get new devices and save up for (hopefully) a more luxurious trip when we turn 40.

When you’re done saving for a specific goal, you can rename the bucket to a new goal, and start saving for your next goal post.

Money tips while traveling

Ideally, when you travel, you want to have ways to pay that are as accepted worldwide as possible. Here are some things to consider:

1. Security

For higher security when abroad, credit cards trump debit cards: Credit cards have much stronger fraud protections in place. In our experience, banks will go to bat for you more willingly on a disputed charge on a credit card vs. a debit card.

2. Fees and credit card acceptance

Use a card with no foreign transaction fees: Most travel-focused credit cards offer this as a perk. You should be able to check this in your card benefits easily.
Go for cards that are as widely accepted as possible: Visa and Mastercard are the most widely accepted credit cards worldwide, so it’s smart to have one to use abroad. Other popular cards, such as American Express, may vary in their worldwide acceptance.

3. Using your perks

Get a card that helps you maximize travel benefits: When you’re applying for a travel credit card, it helps to think about the benefits it will give you access to while you travel (perks like lounge access and travel insurance) and how it will help you build up travel experiences through earning points, travel credits, and other benefits.
Most airlines and hotel chains have dedicated credit cards (we love the perks of the Marriott Bonvoy Boundless credit card), so if you’re loyal to an airline or hotel chain, it’s worth looking into their cards’ benefits.

4. Currency exchange

Evaluate exchange rates when planning travel: How far will your money go when you travel? Ideally, go for destinations with a weaker currency than the currency you earn income on. Last summer, the Euro and the US dollar reached parity, making European travel more affordable than it had been for American travelers in a very long time.
Exchange money in your bank, not the airport: Airports are famous for not having the best exchange rates and charging commissions in every transaction. However, some currencies are hard to find (or unavailable) out of the country. Do your best to exchange as much money as possible in one go.

Planning is critical whether you are taking one major trip or figuring out how to fit traveling into your finances regularly. It’s possible to plan travel without going into debt while still being mindful of your finances. Small steps taken consistently over time can make a world of a difference.

DISCLAIMER: The information in this article is presented for information purposes only and should not be taken as financial advice. Consult a financial professional before you decide on financial products.