Smart Travel: Avoiding Financial Mistakes As Expats and Travelers
Smart Travel: Avoiding Financial Mistakes As Expats and Travelers
As a fellow traveler, I understand the allure of exploring new lands and being captivated by their charm. But I also know how easy it is to overspend, falling into the trap of assuming everything is cheaper abroad. I made the same mistake during my first overseas trip, spending as if I were back home in the U.S. However, I quickly realized the need to be smarter about my finances and identified five key mistakes I was making. By addressing these missteps, I significantly improved my financial health and enhanced my travel experience. Here’s what I learned.
1. Not Having a Budget
When you're out exploring the world, having a budget is key to making the most of your travels. It’s easy to get caught up in the excitement of fancy restaurants and expensive souvenirs, but overspending can leave you high and dry halfway through your trip. That’s where budgeting comes in handy.
Personally, I don’t use detailed budgeting tools because they feel too labor-intensive, and I prefer not to micromanage my spending. My goal is to make enough money to live well below my means, which is relatively easy in places like Latin America. I have a general idea of how much things cost and keep track of my spending mentally. If you're like me, simply keeping a mental tally may be enough.
However, if you’re the type who likes structure, there are budgeting apps that can help you track every penny spent on transportation, meals, and activities. Some apps even send alerts when you're nearing your spending limit. These tools can help ensure you don’t overspend in one area and regret it later.
Pro Tip: Take advantage of rewards programs on credit cards like the Chase Sapphire Reserve. With 75,000 bonus points (roughly $900 in travel credit), you can use points for flights, hotels, and experiences like the hot air balloon ride I took over Teotihuacan. It’s an easy way to make your travels more affordable without sacrificing comfort. *Shameless plug
2. Relying on Airbnb for Long-Term Stays
While Airbnb is a convenient option for short stays, it’s often not the best deal for long-term rentals. Many landlords have realized they can charge expats premium prices for mediocre apartments. Your local friends certainly aren’t paying $2,000 a month for their homes, so why should you?
The best way to avoid this trap is by building relationships with locals or Airbnb hosts and negotiating lower monthly rates. For instance, I’ve successfully negotiated with Airbnb hosts by offering to pay in cash for extended stays. This benefits both parties as the host avoids platform fees and may even skip reporting the income to the taxman.
Another great resource is Facebook Marketplace, where you can find local apartment listings at more reasonable prices. In Mexico, Inmuebles24 is a valuable tool for finding furnished apartments that won’t break the bank.
Pro Tip: When negotiating, keep your initial message to Airbnb hosts simple. Let them know you’re considering a longer stay if things go well. This way, you leave room for future negotiations without locking yourself into a price.
3. Overindulging in Vices
Traveling to a developing country can feel liberating, and the new set of rules—combined with lower prices—can make it tempting to overindulge. Whether it’s cheap alcohol, drugs, or nightlife, many expats fall into a cycle of excess that can quickly spiral out of control.
I’ll admit, during my first trip to Germany, I let loose a little too much. Beer was flowing, and I spent my nights chasing fun. While those were unforgettable times, I soon realized that such excess wasn’t sustainable. It’s not just alcohol that’s cheap in developing countries; the same goes for other temptations. And while it’s okay to let loose now and then, too much of a good thing can be dangerous.
Remember that expats are just as susceptible to the consequences of excess as anyone else. If you find yourself constantly seeking thrills, you risk falling into the same traps as rock stars who burn out after indulging too much too fast.
Pro Tip: Keep moderation in mind. You can still enjoy all the pleasures of your destination without losing control. Make space for other enriching activities like local tours, outdoor adventures, or cultural events to balance out your experience.
4. Shopping at High-End Supermarkets
When living abroad, shopping habits can make or break your budget. Many expats shop at international or high-end supermarkets out of convenience, but locals often get their groceries from outdoor markets at a fraction of the price. Shopping at these markets can save you up to 75% on fresh produce, meats, and household items.
At first, navigating local markets can be intimidating, especially if you're not fluent in the local language. But once you get the hang of it, shopping at these markets becomes an enjoyable part of daily life. For instance, I’ve been able to buy a kilo of fresh vegetables or beef for less than $4, while building relationships with vendors who know my preferences.
Pro Tip: Want to impress a local? Ask them to take you to their favorite market. Not only is it a great way to immerse yourself in the culture, but it also makes for a fun and unique date idea. Plus, it shows that you’re genuinely interested in the local way of life, which can go a long way in building meaningful connections.
5. Ignoring the Local Way of Life
It’s easy to cling to familiar comforts when you’re abroad—whether it’s frequenting chain restaurants, staying in international hotels, or only socializing with other expats. While there’s nothing wrong with enjoying the occasional taste of home, constantly ignoring the local way of life limits your experience and inflates your expenses.
Immersing yourself in the local culture not only enriches your experience but also saves you money. Try local eateries instead of international chains, use public transportation instead of rideshares, and take part in local community events. You’ll gain a deeper understanding of the culture and connect with locals on a more meaningful level.
Pro Tip: Learning even a few basic phrases in the local language can make a huge difference. Locals appreciate the effort, and it can lead to more authentic and rewarding interactions.
Conclusion
When traveling abroad, it’s tempting to hold on to the comforts of home. But doing so can prevent you from fully experiencing the local culture and lead to unnecessary expenses. By addressing these common financial mistakes—failing to budget, over-relying on Airbnb, overindulging in vices, shopping at high-end stores, and ignoring local habits—you can save money while immersing yourself in the local lifestyle.
It’s not about showing off your wealth or avoiding all luxuries. It’s about embracing a new way of life, learning from the locals, and challenging yourself to grow as an individual. With a little effort and an open mind, you can stretch your budget, enhance your travel experience, and avoid falling back into the corporate grind of the Western world.
So, break away from wasteful habits, adopt a more mindful approach to spending, and immerse yourself in the local culture. In doing so, you’ll not only enrich your travel experience but also build a life that offers freedom and fulfillment. Safe travels!