Best Ways to Handle Money When Traveling Abroad
24. May. 2022
When preparing for your Remote Year adventure, it’s easy to get lost in visions of Bali’s beaches or Mexico City’s markets. After all, a visit to Antigua is a bit more exciting than a visit to an ATM! From which travel credit cards to sign up for, to which bank issuers and ATM cards cover currency exchanges, we’re sharing some of our favorite travel tips to help you navigate personal finance while traveling with Remote Year.
Credit cards
Using Credit Cards Abroad:
One of the best financial travel hacks to take advantage of are travel-friendly credit cards. In addition to being widely accepted in most global destinations, travel-friendly credit cards have proper exchange rates and zero foreign transaction fees on foreign currency. While some cards’ annual fees may be off-putting, the many credit card companies' benefits outweigh the fees. Some credit cards entitle you to expedited security in the U.S. Airports, travel insurance, bag-loss reimbursement, and access to premium airport lounges. There are dozens of different travel credit cards on the market, so we’re sharing a few travel credit cards that Remote Year travelers recommend:
Citizens of any country:
Wise Card - this multicurrency card is available to anyone in any country, making it a great option for digital nomads.
U.S. Citizens - U.S. Dollar
Chase SapphireReserve or Preferred Visa
Platinum American Express - while a hefty annual fee comes with this platinum card, the benefits include free TSA Precheck, Global Entry, Clear, and each card comes with travel insurance.
Australian Citizens
Helpful Hint:When using travel credit cards, you can simultaneously collect points and miles on each purchase. This way, your day-to-day spending can help fund your adventures around the world.
Debit cards
Using Debit Cards and ATM Cards Abroad:
While many businesses around the world accept credit cards, in certain instances and destinations, cash will still be king. Whether you’re looking to tip your favorite tour guide or try some local street food, you’ll want to withdraw local currency at a foreign ATM using your checking account, which can sometimes come with a foreign transaction fee. Some banks reimburse ATM fees to your bank account when you withdraw local currency, while others do not. Typically, larger banks are more likely to offer travel benefits than local banks. Here are some of the banks that Remote year travelers recommend:
U.S. Citizens
European Citizens - Euros
Australian Citizens
Citibank Gold Visa
Canadian Citizens
Helpful Hint: To save yourself from any potential hassle, pack a backup credit card and debit/ ATM card when you travel. While uncommon, petty theft, accidentally leaving your card in the ATM, or forgetting to close your tab at a bar sometimes happens. Keep your backup cards separate from your main wallet during your travels so you always have an extra card, ready to use if needed.
Woman using her phone
Helpful Financial Apps Abroad
First and foremost, download any of the existing card (both credit and debit) apps on your device. This way you’ll be automatically able to view transaction history, pay bills remotely, or immediately suspend or cancel your card in an emergency. In addition to your banking and credit apps, we've listed four of the top finance-related apps to download – no matter what bank or credit card you have.
What we love most about these apps is their ability to swiftly transfer money from one person to the next. As you share experiences, meals, and special occasions with the Remote Year community, these apps make it easy to divvy up the bill without needing any cash on hand.
Helpful Hint:Some banks or financial institutions will not allow you to connect your account or sync your cards for the first time while abroad. It’s best to always download any necessary apps to your phone and log in before leaving your home country.
City food tour
Handling Taxes While Abroad
If you’re heading out on a 4 or 12-month Journey, you may have a question or two about how to file your taxes for the following year. While we love to think we're a "jack-of-all-trades" here at Remote Year, we are most definitely not tax professionals. As we are unable to give tax advice, nothing below should be construed as tax advice or legal advice rendered by Remote Year or anyone employed by or associated with Remote Year. It is also important to note that you alone are responsible for maintaining tax compliance while traveling with us.
Many of our participants found it helpful to reach out to trusted tax professionals for advice, and we suggest that you do the same if you feel that your tax obligations are unclear!
Below are helpful resources when considering your taxes after or while traveling. Please note these resources are geared mostly toward U.S. citizens/resident aliens.
Worldwide Taxation of U.S. Persons
As a basic rule, U.S. citizens and resident aliens, even those living outside the United States, are subject to U.S. tax and reporting on their worldwide income. You must annually report all of your income to the IRS, just as you did before living abroad, whether the income is from U.S. sources or foreign sources, and whether or not the income is taxed or reported in the foreign country.
Foreign Earned Income Exclusion
Some US tax residents participating in Remote Year programs have been able to take advantage of the Foreign Earned Income Exclusion (the "FEIE"). Lots of factors go into determining whether the FEIE may be applicable in your case.Expat Tax Professionals andOnline Taxman (two groups of tax professionals that some Remote Year participants have worked with in the past), were kind enough to write summaries of the FEIE. Expat Tax Professionals also wrote anFEIE Assessment Checklist.
Remote Year is not a tax professional, and none of these documents should be considered the rendering of tax advice by Remote Year or anyone employed by or associated with Remote Year.
Helpful Hint:If you’re self-employed, contracted, or freelance, keep a list of all of your travel expenses that directly relate to your job such as technology, camera equipment, etc (this can include a portion of your Remote Year fee for coworking spaces). When you file taxes at the end of the year, these can help you and your accountant figure out your expenses and potential tax write-offs.
While navigating finances abroad may seem overwhelming at first, managing money while traveling is simple once you’ve put the right tools in place. With a little research and practice, you’ll be making the most of your finances and budget in no time! If you have any questions or are looking to speak more in-depth about your international financial plans, it’s advised to speak to a proper financial expert before your travels.
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