World currencies courtesy of the ATM network.

Your hard earned savings, the money you are to live on for the next however many months is ready to send you travelling, so just what do you do with it? Firstly, You need two bank accounts, both accounts must have debit cards with ATM access and  ideally each account will belong to a different ATM network  e.g. Visa,  Maestro, etc . They both require online banking set up too.

Two Accounts, Both With ATM Cards.

Into your main account, we will call it your "daily" account, you want to be putting the majority of your cash, say around 80-90 percent of the total. Into the second account goes your "emergency" money, approximate 10-20% of the total amount.

The world is covered with ATM's and this is what you will use to access your funds. Occasionally, some ATM's will only accept one type of debit card, and in this situation, if you cannot access your daily account, then hopefully your emergency account will be fine.  Also, if your daily account card gets stolen or lost, then at least you have your emergency card to get by on. The daily card is to be in your purse or wallet and the emergency card is to be kept somewhere different and safe.

As well as having your cards and the local currency they provided from the hole in the wall, you should also carry additional US dollars with you. The one currency that can be changed worldwide is the US Dollar, the Euro is a close second, but for general acceptance to change to any local currency, the US dollar seems to be top dog.  As such, purely as a back up to both cards not working or both cards getting lost or stolen, then you should have some US dollars that you can utilise. This is serious emergency money and as such should be kept very safe.  Some places can be picky about the quality of the notes and may even refuse to change them if they look too worn, so get good quality notes, with a mix of  denominations, $50 notes and below is probably best, but the odd $100 bill shouldn't be an issue to get changed. I'd also recommend you keep this in a your "secret agent" money belt as seen under Clothes Item 16 in the "What To Take" trip helper and also available to buy from Walkabout Travel Gear*.

ATM Charges

You will typically get charged twofold for withdrawing cash: one for changing the money from your account at home into a foreign currency and two for taking the money out whilst abroad. These charges do vary, but as a guide, you'll be charged 1.5% for the overseas transaction and 2.75% for the exchange rate transaction. This means that on a withdrawal of £100 you would be charged £4.25.

Many of the UK banks will charge, but there is one saviour and that is the Nationwide Building Society . It is FREE to use their card abroad*. They say "we are the only [UK] high street provider who doesn't charge if you use your card abroad". Amazing, and to highlight what you would pay with your current  provider, they even provide a nice calculator so you can work out what other banks will charge you whilst away. To use the calculator visit :  http://www.nationwide.co.uk/current_account/Calculators/overseasCalc.htm . If you are not with the Nationwide, change now and set this account as your daily travel account. Don't be lazy, do it and it will save you hugely.

*UPDATE : Changes to fees using a Nationwide Visa Debit card abroad.
Nationwide have announced that from 1 June 2009 they will start to charge you for using your card abroad. The fee is 0.84%, rising to 1% from 1 July 2009.  The fee is only payable on transactions outside the Visa European region. You can find a list of the countries affected at http://www.nationwide.co.uk/foreigntransactions .

This means that on a withdrawal of £100 you would be charged £4.25

As if these charges aren't enough, the ATM machine providers may also charge you a nominal fee. Unfortunately not even the Nationwide can prevent  this, so your wallet will just have to take the hit.

All these fees may have you thinking there must be a better way. Well the alternative would probably involve huge bundles of money or travellers cheques. Obviously carrying large amounts of cash is extremely high risk, unsafe and cannot be advised. As for  travellers cheques, well these are slowly becoming obsolete. They do offer protection over cash, but it is becoming increasingly harder to change them to currency. And remember that changing these will also involve a fee. As such, the widespread acceptance of ATM's, combined with a Nationwide account seems like the most logical, cost effective solution to managing your monies.

Credit Cards

As well as a couple of debit cards, it's worth having a couple of credit cards too. These are for paying hostels online or for other trips and large purchases. Set the cards up so that the minimum payment will be paid whilst you travel. And most importantly try to get cards that offer 0% interest for as many months as possible, this way you won't have to worry about paying them at the end of each month and can settle it when you get back home.  A great site for seeing which cards are offering 0%  and generally on all things money related is http://www.moneysavingexpert.com/ .

For an abridged printer friendly list of everything on this page please visit The Check Lists.

Carrying 4 banking cards (see the first tab) to manage your finances whilst travelling doesn't come with out its complications, so consider the following tips to help you get along:

• Don't keep all the cards in one place. Take your "emergency" (see the first tab) credit and debit card and place them somewhere other than your wallet.

• You may have new pins to remember or old ones you struggle with, but either way you do not want to forget your pins whilst travelling. A way around this is to take a pin reminder card with you. It's a simple way that means you have one word instead of four pins to remember. The pins are then disguised on the reminder card so they cannot be read by someone who does not know the secure word. Instructions and a template of a pin reminder can be downloaded here .

• Phone the banks and tell them you are going travelling and that you will need access to use the cards abroad.

• Check the expiry dates on  the cards you are taking and make sure they do not expire whilst you are away.

• Invest in a card protection scheme. These typically cost around £45 for 3 years. You register all your cards and passport, even house keys, with them and if anything gets stolen, you inform them and they put a stop on all the cards. It saves you phoning different banks and acts as kind of panic button to stop everything.

• Be discreet when using your cards online. Try to avoid getting your cards out to use online in Internet cafés. Malicious software could be installed on that machine that stores every key you type. Such software is called a key logger and is very easy to download and install. So If someone sees you carefully typing your card number into a PC then they will know to check that PC for logged details, your credit card details!

• Cancel and destroy any cards (or cheque books) that you don't take with you. However, remember that when you return back from your trip (unemployed?) you may no longer be eligible for the cards you once had. So if you doubt you'll get that special credit card when you return, keep it in a safe place at home and add it to your card protection scheme (see earlier point) . You might also want to check when that card expires too, as you won't want them posting a new card to your home when you won't be there.

Is online banking a travel buddy or a travel baddie? The problem you have to ask yourself is can you trust the PC you are using? The PC's in Internet Café's can range from very secure to very dubious and because of this I would recommend that you don't do Internet banking unless absolutely necessary. When you leave home, leave with the intention that you will not be using it and pretend that it does not exist.

Remember, you can always check your balance via ATM's and this is far more secure than logging onto a random PC in a café or hostel.

You may think that I am being over cautious, however, regardless of how secure the PC is, the mere fact that the PC has Internet access means that anyone could download software and install it on the computer. Simple key logging software is readily available (just type "keylogger" into Goggle) and could be used to store passwords and user names. I'm not suggesting complicated hacks, I'm suggesting anyone with basic computing knowledge, access to the PC and malicious intent could quite easily record your key presses and everything that they reveal.

The British Bankers' Association (BBA) produce a Banking Code which is a code of practise that most of the banks abide to. This code clearly states  that banks will not be responsible for losses due to online banking if consumers do not have up to date anti-virus\spyware and firewall software installed. So if you were hacked, and the bank felt that you could have done more to prevent it, then they can refuse to help and reimburse you.

This [banking] code clearly states that banks will not be responsible for losses due to online banking if consumers do not have up to date anti-virus\spyware and firewall software installed. 

 If you can manage without, then don't use online banking. If you must use it then use your common sense and consider the following tips:

• Don't choose the cheapest Internet café. Try and find an up market one, it may cost a little more, but hopefully this will reflect in their services. Ideally you want a newer PC with the latest version of Windows and all it's Windows updates.

• Choose your seat carefully. Don't choose a seat where everyone can see what you are browsing. Be discreet.

• Check that the PC has anti-virus software running.

• Before you start, ensure that you can delete your browsing history and other data. The facility to do this may be disabled, so check before you start. If you don't recognise the browser or it's an old version then don't use it and go somewhere else. To delete your history :

  • In Internet Explorer Version 7 : Tools, Delete Browsing History, Click "Delete all..." button. (Click it before & after your browsing session).

  • In Internet Explorer Version 8 : Safety, Delete Browsing History, Tick all the check boxes, Click "Delete".

  • In Firefox Version 2 and 3 : Tools,  Clear Private Data, Ensure all boxes are ticked, Click "Clear Private Data Now" button (Click it before and after your browsing session)

• Some Internet café's start each day with a clean build on the PC, so getting there early may also help.

• If the place looks dodgy then go somewhere different.

It's impossible to budget for a round the world trip. You might be great managing money, but this really is the mission impossible. There are just too many unknown factors, so the best you can do is guess.

The cost of living in countries is hugely different : for the same price as a 3 course meal in one country you will get a coffee in another. Then there's the moment when your budgeted $40 USD a day goes out the window because you did a $150 USD bungee jump. "But it was Queenstown, New Zealand, the home of the bungee and a once in a lifetime experience" you convince yourself, and you are right, but that was 4 days budget gone in 10 seconds of free fall!

for the same price as a 3 course meal in one country you will get a coffee in another

You can of course live on less than $40 USD a day and not do bungee jumps, but I believe if you are going to do a round the world trip, then it's worth doing it well. It's better to stay at home and save more than to go and be restricted. My rules of budgeting are as follows : 
 

• If there's this rare opportunity to do something special then you should do it on one condition : It's special and specific to the country or town you are in. i.e. Seeing orangutans in Borneo is a must do. Go-Karting on one of the biggest tracks in the world can wait - unless karting is your favourite pastime.

• Stop in hostels. Hostels are always cheaper than hotels and cater for the budget traveller. You can always pay that bit more for a private room, or for a private room with en suite. And if you are travelling as a couple then the price increase between 2 dorm beds as opposed to a double room isn't always that much. So it could well  be worth paying it, just for the added privacy and security.

• Don't eat out at the nice restaurants. An occasional splurge is fine, but try the supermarket, try street food, try cafés and use the hostel kitchen rather than the nice expensive places. When you splurge, if a country has a national dish then you must  try that, don't just eat the most expensive thing on the menu as it might be a foreign import.

• Partying is expensive, but fun. So don't deny yourself an occasional night out, but just don't go mad. If you are nowhere special then detox, stay in and read, and lay off the beer. If you are in Rio de Janeiro, then get out and party - it's what Rio is famous for!

Let's face it, you are doing a round the world trip for the experience, so be smart :  keep everything in moderation, keep one eye on the bank balance, but most of all have fun. This is a bit of a juggling act,  but with a little thought I'm sure you can find the right balance.

Hidden Expenses

When you work out your budget there are couple of costs that can easily be forgotten, so don't forget these two:

1. Tour Costs & Local Payment

   If you have an organised trip or tour planned, then you will probably have paid for it in advance. Check what this covers and examine the small print to see what remains. Typically your transport and your room will be included, but check entrances to sights and meal prices. Are you still expected to pay for these?

   Also, many tours have what's called a "Local Payment" and this can be a large sum of money,  easily $300 to $600 USD, depending on the length of your trip. This money is usually paid when you arrive at your tour starting point and is a compulsory payment too. However, this is paid to the tour leader in cash to ensure that the payment goes direct to the local community and not some travel company's head office in London.

2. Existing Life Still to Pay For?

   Do you still have a mortgage, debt or other bills to pay? Any outgoings you have before you leave will also need to be paid whilst away. So remember to check your current account for monthly debits that you'll have to maintain whilst away.

A Ball Park Figure

It's impossible to put a price tag on what a round the world trip costs, but in an attempt to give readers a ball park figure, consider the following :

Round The World Flight Ticket : £900
Other flights and overland travel: £500
Accommodation in Hostels (£10 a night for 300 days) : £3000
Spending Money (£10 a day for 300 days) : £3000
Travel Insurance : £300
Rucksack and accessories: £250
Vaccinations & Malaria tablets : £250
Visas: £200
Miscellaneous: £200
--------------------------
Total : £8,600  per person

Be warned,  you could easily spend a lot more than this amount - think double the amount if you're pretty relaxed about cash. Of course, you could spend less too as it all depends on the trip and the individual.

Prices are meant as a guideline and were correct as of summer 2008.