Advertising
Advertising

The 5 Money Nightmares You Can Avoid While Traveling

The 5 Money Nightmares You Can Avoid While Traveling

I’ve been mugged, had my identity stolen and been ripped off overseas more times than I can count. For seasoned travellers these things are part of the job description. If you’re planning to go overseas or have found yourself in one of these situations, here’s how to tackle five money nightmares every traveller risks encountering – because no holiday should be cut short due to money misadventures.

Identity theft

A close friend had his identity stolen at an Australian airport. Had he of known where he threw his trash, it may have been different.

    source:picjumbo.com

    An English friend of mine arrived in Sydney to the news that a personal loan he’d taken out was maxed out. This is devastating news for anyone to hear, but it’s even worse when you never took out a personal loan to begin with. Turns out someone had stolen his identity from a plane ticket stub he had thrown in the airport bin.

    You always think identity theft won’t happen to you until it does – take extra precautions when you’re moving from place to place and dispose carefully of anything with your details on it. As it turns out, you need to know where your personal details are disposed of even in the relative safety of Australia, and though you don’t think about it initially the hardest part of identity theft isn’t regaining your identity but rather repairing it. Luckily, the Federal Trade Commission detail steps on retracing your alter ego.

    Advertising

    Mugging

    Having cash on you is important when travelling. It’s also pretty important to thieves.

      source:picjumbo.com

      I was mugged in Amsterdam of all places, but luckily the thief only got away with 20 Euros. This is because I listened to the advice of a fellow, seasoned traveler: I split up my money and then sewed a pouch under my chest pocket to keep my passport, ID and credit cards safe. This is why listening to other travelers experiences is so vital – you can ensure the same thing doesn’t happen to you, and that your belongings remain yours.

      Credit card account hijacking

      You’ll be paying for some pretty crazy things while abroad – just make sure all your transactions are actually yours.

      Advertising

        source:pixabay.com

        I had already been stung by some unexpected overseas fees and ATM withdrawal fees, but it was after a night out with friends abroad that I noticed some unusual transactions on my credit card (It was also then that I remembered the waitstaff staring at my card during payment multiple times that night).

        I didn’t waste any time – I called the bank and they reversed the charges immediately. This ease of reversing charges is one of the godsends of credit cards – If I’d been using a debit card it might not have been as quick a turn-around. In certain situations it always helps to be using credit as banks may be able to retrieve funds more quickly.

        Make sure your card is going to work with you when you travel and be mindful of how you’re spending on your credit card overseas.  In any case, your bank will tell you what you need to do the second something fishy appears on your statements.

        Getting stuck with no cash

        Cash is king, so make sure you always have access to it.

        Advertising

          source:gratisphotography.com

          Everyone knows South-East Asia is the world capital of bartering prices, so I wanted to make sure I actually had cash to barter with. I went for a travel card with no foreign transaction fees, so I was only paying for money I was actually spending. Many travel money cards also let you lock in exchange rates, so you know how much cash you have to spend before you leave.

          Make sure you’ll be able to withdraw cash from ATMs in the country you’ll be visiting, otherwise your negotiation powers may not be that influential for very long. Oh, and for those of you with little negotiating skills, here’s a quick guide to get you up to speed.

          Getting ripped off when exchanging currencies

          You’re going to have to hand over cash this holiday, so make sure it’s to the best hands possible. 

            source:pixabay.com

            Advertising

            Arriving in Heathrow airport for the first time and with no local currency, getting to an exchange service was my first priority. Spotting a foreign exchange stand in the airport, I couldn’t believe my luck – I wasn’t even in London yet. Once I was in London, however, I noticed that the exchange rates on offer outside of the cushy airport were much lower, with some being almost half the price. Like domestic travel, don’t just look for the quickest deals on services – get your money’s worth by looking for the best deal possible

            Just because you’re travelling, it doesn’t mean you should care less about prices. Give every financial decision the same weight you would as if you were making it at home.

             

            Traveling offers you no plenty of surprises, but they’re not all going to be free hotel room upgrades. Next time you travel be smart about your finances and savvy with your cash to avoid waking up in a scene from The Hangover.

            Featured photo credit: picjumbo.com via media.lifehack.org

            More by this author

            The 5 Money Nightmares You Can Avoid While Traveling

            Trending in Money

            1 The Definitive Guide to Get out of Debt Fast (and Forever) 2 25 Easy Tips on How to Save Money Fast 3 What Is a Good Credit Score (And How to Get One) 4 9 Millionaire Success Habits That Will Inspire Your Life 5 10 Reasons Why Following Your Passion Is More Important Than Money

            Read Next

            Advertising
            Advertising
            Advertising

            Last Updated on July 10, 2020

            The Definitive Guide to Get out of Debt Fast (and Forever)

            The Definitive Guide to Get out of Debt Fast (and Forever)

            Debt can feel crushing, like a weight that is always weighing you down. Looking at those numbers, it can feel as if you’ll never get out from under it. However, if you really want to learn how to get out of debt, it is possible with a great deal of focus and self-control.

            Getting out of debt isn’t impossible. Like any big goal, all that it takes is an action plan to identify where you are and creating a plan to zero out your debt.

            Identifying All of Your Debts

            The first part of paying off your debt is getting a complete picture of what you owe. When you have everything written out in front of you, it makes it much easier to create an action plan. Depending on how much you owe, it might also help you realize it’s not as bad you might have originally thought.

            Here’s how you can get started identifying your debts:

            1. Own Your Debt

            Before you start identifying all of your debts, take a moment to process that you have debt but want to get out of it.

            Forgive yourself for any past mistakes, missed payments, or overspending. It might be painful to accept how much debt you have at first, but you must own it.

            2. Make a Debt Tracker

            It’s astonishing how few people ever created a tracker to understand their total debts. Most likely, it comes from not wanting to accept the guilt of having debt, but, if avoided, it can make it nearly impossible to get out of debt.

            Open up a new Google or Microsoft Excel sheet and list out all of your debts. Start with the name of the creditor, interest rates, total balance, loan term length (if any), and the minimum amount due each payment. This will include student loans, credit cards, and any other type of debt owed.

            3. Get Your Debt Number

            Once you’ve made your debt tracker and taken the other steps, identify your total payoff number. This is crucial, as you will have a starting point and a clear goal that you are trying to achieve.

            Prioritizing Your Debts

            All debt is not created equal. It’s imperative to understand that there are different types of debt.

            Advertising

            1. Understand Bad and Good Debts

            Bad debts are usually paying for things you want instead of always need. While there might be some emergencies that max out your credit cards, often times it’s excessive spending[1].

            There are three main types of bad debt:

            • Credit Card Debt: The average American household owes over $16,000 in credit card debt!
            • Auto Loan Debt: According to CNBC , the average auto loan in the US is $30,032!
            • Consumer Loan Debt: Consumer loan debt isn’t as common as credit card and auto loan debt, but it’s still considered bad as interest rates are usually between 10-28%.

            Good debt is identified as investments in your future. Here are three common types of good debt:

            • Student Loan Debt
            • Mortgage Loan
            • Business Loans

            2. Decide Which Debt to Pay off First

            Once you know each type of debt and their interest rates, you can begin to pay off debt quickly.

            Focus on paying off bad debt first, regardless of if it is a credit card or auto loan. Start by paying off the loan with the highest interest rate first.

            If you have several credit cards with different interest rates, you want to focus on the one with a higher APR. You will actually save more money by eliminating the card with the highest interest rate.

            3. Don’t Pay the Minimum Amount

            Paying the minimum amount digs you into a hole as interest rates will offset your payment. Even a small amount more than the minimum can help you pay off debt much faster.

            Removing Obstacles to Pay off Debt Quickly

            Creating a debt tracker and prioritizing a plan is simple, but avoiding temptation can be difficult.

            1. Set a Reminder to Track Your Debt

            “If you can’t measure it you can’t manage it.” -Peter Drucker

            It’s so important to track your debt to ensure that you get it paid off quickly. Similar to working out and measuring your results, you need to track your debt constantly. Start with a weekly reminder, where you sign on and log your updated number. Did you increase, decrease, or stay the same?

            Advertising

            Regularly tracking your student loan balance can be incredibly motivating, as well. You will get a huge confidence boost each time you see your total debt amount decreases.

            Set weekly and monthly goals so you can have short term wins and keep the momentum going.

            2. Hide Your Credit Cards

            If your biggest debt is credit cards, you need to eliminate temptation and remove them from your wallet.

            Some people have gone to extreme measures by freezing their credit cards. Why? This would create an ice block around your card, which would require you to chip away at it slowly. This will give you time to think if it’s the best idea to buy that thing you’re about to buy.

            3. Automate Everything

            Willpower can be a huge downfall to paying off your debt. By automating your bills each month, you will ensure that willpower isn’t involved.

            4. Plan Ahead

            Getting out of debt will require some sacrifices, but with enough planning, you can make it work.

            For example, if you know that you have a friend’s birthday or family dinner coming up, plan ahead for the costs. Whether you need to cut back on spending the week before, pick up a side job, or meet them after dinner, do what is needed.

            5. Live Cheaply

            The only way to get out of debt is to make some sacrifices on your spending habits. Find ways to save money each month so you can apply that amount to your outstanding debts. Here are some ways to save money each month:

            • Live with roommates
            • Cook dinners and prepare lunches for work instead of eating out
            • Cut cable and choose Netflix or Amazon Prime
            • Take public transit or bike to work

            Finding the Lowest Interest Rates

            The higher your interest rates, the harder (and longer) it will take you to pay off any debt.

            If possible, you want to find ways to lower your interest rates to help get out of debt quickly. Here’s how you can get started:

            Advertising

            1. Maintain a High Credit Score

            Your credit score will have a large impact on your ability to refinance your loans and receive a lower interest rate. If you have a low credit score, it’s unlikely you will be able to refinance your loans. Use these credit tips to increase and maintain an excellent score:

            • Never miss a payment
            • Don’t exceed 30% of your credit limit
            • Don’t sign up for more than one card at once
            • Limit hard inquires, like auto-loans and new credit cards
            • Monitor frequently with free credit-tracking software

            2. Find Balance Transfer Offers

            Start by opening a free account on credit.com. Credit.com offers you the chance to open a free account and see what type of balance transfer offers you can receive. Some of your existing credit cards might already have 0% or lower APR balance transfer offers available.

            Contact each of your credit card providers to ask about lowering your rate for a one-time balance transfer offer[2].

            If you do take advantage of this option, make sure that you use a balance transfer and not a cash advance. Cash advances have a ton of high interest fees (15-25%, depending on your credit card) and will only compound your debt problem.

            How to Get Rid of Debt Forever

            Setting up a plan, removing temptations, and getting the lowest interest rates is the first step to get out of debt.

            1. Keep Monitoring and Adjusting

            Once you have a plan, don’t get comfortable. Track your debt payoff plan and make the necessary adjustments when needed.

            Monitor your credit scores with a free site like CreditKarma. The higher your credit score climbs, the more likely you will be to secure a new, lower-interest loan.

            2. Earn More Money

            There are only so many ways to save money. Instead of clipping another coupon or making sacrifices for your morning coffee, find ways to earn more money!

            Think about it…it is much easier to find ways to earn an extra $1,000 per month than find $1,000 to cut from your budget.

            Here are some examples of ways to earn more money:

            Advertising

            Talk to Your Boss

            Have a conversation with your boss about current salary and/or commission rates. If you’re not satisfied or want a change, don’t be afraid to look around at other positions. Some of them might even have a student loan debt reimbursement plan!

            Start a Side Hustle

            This could be coaching students on the weekends, driving for Uber, or taking paid online surveys. There are tons of ways to make money outside your 9-5. Now that you have a clear plan to pay off your debts, you’ll be more motivated than ever to figure out creative new ways to earn money.

            Build an Online Business

            There are so many websites and blogs that earn money from ads, affiliates, and other online products. Find your niche and get started.

            3. Celebrate Your Wins

            As you progress in your debt payoff journey, don’t forget to celebrate your wins. You need to always reward yourself for the hard work and discipline that is required to get out of debt.

            While you shouldn’t celebrate so big that it increases debt, make sure to factor in little rewards to keep you motivated.

            4. Set New Financial Goals

            Eventually, with a plan and these steps, you can rid yourself of your debt. Once you do, make sure to celebrate your monumental achievement, but don’t stop there.

            Now, you can focus on acquiring wealth and increasing your net worth. Set new financial goals so you have a new target to aim toward. Here’s how to set financial goals and actually meet them.

            These could be anything now that you are debt free! Think about where you want to travel, buying your first home, or saving for your future retirement. Just like before, make sure that your goals are specific, measurable, and achievable.

            Conclusion

            Congrats, you can now set a plan in motion to finally pay off your debt quickly (and hopefully forever)!

            Remember, if you want to get out of debt quickly, it’s not always easy. Just like any big goal, there will be sacrifices, challenges, and problems to overcome.

            More Tips on Getting out of Debt

            Featured photo credit: Pepi Stojanovski via unsplash.com

            Reference

            Read Next