Boi From Troy

Managing Your Money While Traveling on a Gap Year

Taking a year off from work or study is a brave decision, but many experts are recommending a gap year as a great way to expand your mind and gain life experience. There’s probably something in that, as there is hard data to back their opinions up.

There are all kinds of ways you could spend your gap year, but travel is a popular choice. Setting off on an adventure is exciting, but it’s also important to not forget you still have a life at home you’ll probably want to return to.

Managing your money while you travel is important. This actually means two things:

  • You must avoid running out of money before the end of your journey
  • You need to ensure the security and availability of your money so you’ll have access to it and won’t lose it

In addition, if your travels are taking you overseas, it’s best to have contingencies like travel insurance in place.

Manage your money well, and your gap year travels can be a wonderful adventure. If you are careless, you could find your dream trip turns into a nightmare. In the following sections, I’ll step through some tips with you to help you keep things going smoothly while having what will probably be the best time of your life.

Start with a plan

You won’t get far in life if you don’t make a habit of planning. Plans can be adapted as you go, but it’s essential to have a basic template of what you want to achieve and how you expect to achieve it.

The first step is to decide where you want to go. For many people, that’s actually the most difficult part of the process. Do you want to see as much of the world as possible, or do you want to immerse yourself in a foreign culture and make lasting friendships? Each of these experiences can be rewarding, but they have vastly different logistic requirements.

Once you’ve decided if you’re exploring the world, a continent, a region of a continent, or just a single country, you’ll have the basis for setting your travel budget.

Each region of the world will have different daily expense requirements for accommodation, food, and activities, so you should choose destinations compatible with what you can afford. You’ll also need to decide for yourself the minimum level of comfort and safety you can endure long term.

With this data, you know where you are going and the standards you require, and from that you can calculate your daily costs. Try to stick as closely as you can to your daily budget limit, but make allowance for a 30% over-run per week.

When you stay long term in one place (at least 30 days without leaving), you can often save a lot on your accommodation costs. In most areas of South East Asia, for example, a furnished apartment in a major city will cost around one third of the cost of a similar hotel room, and most hotels will also give long stay discounts if you ask.

Do your homework

It’s worth researching your trip before you head off.  Check out whether you’re going to need visas and what kind of visas you’ll need. You might be surprised how complicated the rules can be in some places. The cost for any necessary visas will also need to be included in your budget plans so find out how much you’ll need to spend.

Set up a financial safety net

There are a few simple things you can do to make sure you don’t have financial problems at home or on the road during your trip.

  • Ideally you should have at least 3 bank accounts, all with different banks, all with ATM debit cards or credit cards, and all manageable online.
  • Make sure at least one of your cards is a Visa and at least one is a MasterCard (debit or credit is fine). This way at least one of your cards will work almost anywhere in the world.
  • There is definitely no such thing as a safe ATM, but you can improve your safety significantly by only using ATMs inside banks, airports, government buildings, and legitimate (branded) convenience stores.
  • Use sensible passwordand PIN security techniques. Don’t use anything that could be guessed easily just by a simple investigation.
  • Choose banks and payment services that do not require a phone numberto verify transactions. Those that offer multiple verification options are better, because having to keep global roaming activated on your phone for an entire year is not exactly frugal.
  • If you live alone in a rented dwelling, consider ending the lease. This will be a lot less expensive than continuing to pay rent for a year while you’re away.
  • If permanently moving out isn’t the option you want to take, you could consider shutting off your utilities such as water and electricity before you leave.
  • Many banks and credit unions will allow you to set up scheduled direct debit payments to take care of recurring bills. This means you won’t have to remember to pay them.
  • Avoid exchanging a large amount of cash to the foreign currency before you leave your home country. You only need a small amount to cope with emergencies or in-flight purchases. If you’ve chosen your ATM cards properly, you shouldn’t need to change money. But do check online before you go that the airport you will arrive at has ATM terminals available (nearly all do).

Don’t forget about taxes

One of the most common mistakes people make when traveling away from their home country for an extended time is failing to file their tax return. This can cause problems when you get home from your travels, especially if you would have been liable for a lot of tax.

An easy way to stay on top of this problem is to obtain all the necessary forms and mailing address from the IRS (or equivalent agency in your home country) and be sure to mail them in before the due date for filing.

If you’re not sure what your taxes should be, you can use free online tax tools to find the answers you need. When it comes to taxes – particularly in the United States – it’s always better to be safe than sorry.

Insure yourself

Many credit companies provide free travel insurance as part of their package, so it’s a good idea to find out if you are eligible for this, how to claim, and what you’re covered for.

Otherwise you’ll need to buy travel insurance, and this can be complicated. Some companies will only sell you the travel insurance if you’ve been in your home country for at least 90 days before you buy it, and they’ll only cover you for 90 days.

Find an insurer that lets you take out an annual policy, or one that lets you top up an existing policy online while you’re on the go. Before you buy any kind of insurance, you should check customer reviews to make sure they have a good reputation for paying out on claims.

Keep in touch

Communication is important when you’re traveling. Letting friends and family know where you are and where you’re going next helps you all miss each other less and helps keep you safe.

You can purchase temporary travel SIM cards in almost any country, and there will always be places with Wi-Fi available. Just be cautious about using unsecured free Wi-Fi, as it may be unsafe for some types of communications and online activities.

Make it count

By following the above advice, you’ll have everything you need in place to make sure your money is secure and accessible, you won’t run out of money while you’re traveling, and you shouldn’t be facing problems on your return home.

Your gap year travel will be worth it if you have fun and achieve your goals. A good way to meet new friends and gain valuable experience is to find an internship or volunteering for a cause you’re passionate about.

One more option is to get a job on a ship. That way you’re getting free travel, earning some extra cash, and maybe learning some useful skills along the way. Now all that’s left to say is bon voyage and thanks for reading.