Gratuitous vegan donut photo!
Are are 10 things you need to do to get your finances in order prior to a big trip. There’s a lot to think about before a big trip and some of these you might not have thought of.
1. Put subscriptions on hold.
Do you have regular bills you can put on hold? For example, my health insurance allows me to take a break of up to 1 year provided I can prove being out of the country. (In the end I decided not to do this because there are a few catches with it, but it might be a good option for you).
Digital subscriptions (eg. audiobooks) can often be put on hold by calling or emailing their customer service. This might not be advertised. You may need to ask.
2. Change your address with the tax department and consider nominating a person who can deal with them.
In New Zealand, the tax department have an online system similar to internet banking. I signed up with this and changed my address to my Mum’s address. An additional possible step is to designate someone who can deal with the tax department about your tax matters.
3. Change your tax rate on your investments.
If your income is going to be lower, you may be able to reduce your withholding tax rate on your investments (e.g. for NZ).
4. Get a backup credit card.
More than once I’ve had banks put a stop on my ATM card while I’ve been traveling. Get a backup card. You’ll need a credit card for car rentals etc and you don’t want to get stuck with your one card getting cancelled just as you’re about to pick up a rental.
Look for a credit card/ATM card that doesn’t charge currency conversion fees or international ATM withdrawal fees. People in both the US and UK have these options whereas New Zealanders are out of luck.
5. Investigate Savings Accounts.
Make sure you’re comparing the after tax rate of interest you’ll earn when you investigate savings account options, and look at your options across a variety of different banks. If you’ve saved 10,000 GBP to do a year of travel, a 1% difference in the interest rate you earn on that money is enough to fund 2 travel days.
6. Invest your money!
I like to keep around 9 months living expenses in a savings account at a bank where the money is 100% safe. However every cent above this, I make sure I have properly invested. I earn around 10% on my investments and am extremely comfortable with the funds I am invested in. If you’re nervous, you can look at conservative “income funds” aimed at people in or near retirement.
Once again, even 1% of difference is significant when you’ve saved up a substantial amount of money for a year’s travel.
If you’re not buying a house because you don’t want to be tied down, you MUST make sure you are investing your money at at least a comparable rate of return to home ownership.
7. Check into issues with not being resident in your home country or being resident for long stretches in another country.
For example, look into the implications for your student loans or your retirements savings (especially if you have a government backed plan and/or are going to be changing your country of tax residence).
If you’re going to be visiting another country for an extended period, make sure you don’t inadvertently end up crossing whatever threshold would make you a tax resident of that country (eg for NZers visiting Australia).
8. Make sure you get refunds you’re due when you cancel services.
For example, the phone company didn’t refund our overpayment until we specifically asked them to. Make sure you look at the bills that come in after you leave the country related to your final month of services. For services where you were charged in advance, you’ll probably get a partial refund for your last part month of service.
9. If you get online statements, download these before cancelling accounts.
I needed phone and electricity statements for my tax return but after I cancelled my accounts I was no longer able to access the phone bills online. Calling the company and getting copies of the bills wasn’t too big a deal but this was just good luck.
10. Put some money on your skype account.
All the free phone numbers you use for calling businesses/government services probably can’t be called from outside your home country. If you need to ring businesses/services at home, you’ll probably need some Skype credit and the non-free phone number.
Note that this post isn’t intended as financial advice – we’re not financial advisors – it’s just meant to get you thinking about issues you might not have considered.