I've been living abroad for 3 years and these are the 5 biggest money mistakes I've made
- For the last three years, I've been traveling the world and working on the go. I hadn't planned to be away this long, though, so I wasn't fully prepared financially to live outside the US.
- I only brought one debit card with me, and it charges high foreign transaction and ATM fees, and I didn't bring any travel rewards cards like the Chase Sapphire Preferred Card.
- I also lost hundreds of dollars when someone got into my bank account after I used an open Wi-Fi network to buy a ferry ticket.
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Three years ago, I took a last-minute job goat-sitting in a small town in Switzerland. I went to grieve my grandmother's death and to escape the constant ambulance sirens of LA, which only reminded me of her. Seemingly overnight, two months abroad turned into 22 and I was suddenly a digital nomad, working and living remotely.
During that time, I made several money mistakes because I hadn't planned to be away from the US for so long: I wasn't as financially prepared as I could - and should - have been.
When a work trip had me return to the States for a while, before heading back overseas, I decided to eliminate any extraneous expenses that were costing me too much abroad (hello, out-of-network ATM foreign transaction fees).
Even if I'd just stayed abroad those two months - or even two weeks - financially speaking, I wish I'd known then what I know now.
Here are the top five money mistakes I've made while living, and traveling, abroad - so you don't have to.
1. I used the "wrong" debit card and was charged foreign transaction fees with each purchase and at every ATM
One way to spend unnecessary money fast is by using a debit card that charges you penalty fees when you use an ATM abroad. Or, in my case, all ATMs abroad, since I only had Chase's everyday blue debit card (as opposed to one of its other cards) at my disposal and guess how many Chase branches are in Europe: Yep, zero.
Sure, back in the US, in a pinch, perhaps you go to another bank, like Wells Fargo, when you belong to Chase, so you get charged a small fee for using an out-of-network ATM. But when you do this abroad, plan on adding even more fees to an out-of-network transaction, such as fees not just from the ATM, but also from your home bank.
Then there are currency conversion fees, also known as foreign transaction fees, which vary from 1-3% depending on your financial institution. Each time I used that Chase card at the grocery store, for example, my purchase would actually be 3% higher thanks to that card's foreign transaction fee.
Had I initially left the US with a card that doesn't charge foreign transaction fees, such as the Chase Sapphire Preferred Card, or opened a Charles Schwab High-Yield Investor Account and used its card - which not only doesn't charge ATM fees, but also reimburses you if the bank you use charges a fee - I'd have saved a lot of money.
2. I didn't carry more than one debit card - and carried zero credit cards
When I left the US in January 2017, since I thought I'd only be away a couple months, I just had one debit card on me - and no credit cards. I have since learned to carry a few backup debit cards and to also use a credit card - with no foreign transaction fees, of course.
Plus, many cards - such as the Capital One® Venture® Rewards Credit Card - earn travel rewards. If I'd brought the right credit card, the points I earned on travel expenses would have helped me save money down the line, such as on flights, hotel stays, and car rentals.
3. I didn't carry cash
The more you explore new countries, the more you quickly find out which ones are card-friendly, like Iceland, and which ones are not, like Germany.
Not only is carrying cash important for everything from tipping tour guides and waitstaff to having it on hand for an emergency, but also for other kinds of emergencies, like when you have to use a restroom really badly and need to hand over a euro to do so.
I was at a Christmas market in Berlin and it was 1 euro to use the "water closet" (WC). As much as I dug through my wallet, pockets, and backpack, the most I could find was one small coin worth about 10 cents - and the restroom money collector woman was not impressed. She kept pointing to the "1 euro" sign, and then to an ATM.
At this time, I still had my original Chase card. So to get out 1 euro, I'd need to take out at least the ATM's minimum amount - in this case, 20 euros - plus be charged the numerous aforementioned fees, and all just to use the 1 euro restroom.
Needless to say, it was the most expensive bathroom fee ever, but lesson learned: Carry cash. Always.
4. I carried all my cards and cash in one wallet
The old me carried all my money in one wallet, which meant that if I lost it, I lost everything, including my backup debit card. But these days, I have three wallets, two of which I carry and one of which I leave at home.
The first wallet is paper-thin and has a debit card and credit card, as well as some cash - and I never keep it in my purse, but in a hard-to-access jacket or pants pocket instead.
Sometimes, I also use this safety tip from GrrrlTraveler's Christine Kaaloa, who stores some of her money in a sanitary napkin wrapper. Genius. Who would steal that, right?
The second wallet is a decoy one - I keep a couple dollars in it, as well as a store rewards card that has no outright monetary value. This one is kept either in my purse or in an easily accessible pocket.
And the third one stays hidden at home - in whatever city I happen to be living in - and has an in case of emergency debit and credit card in it, as well as some cash.
5. I used open Wi-Fi networks and didn't use a Virtual Private Network (VPN)
Sometimes when you're abroad, you may have to book a bus, plane, or train ticket and the only Wi-Fi available is through a public network. Or maybe you want to quickly check your bank balance. But don't do it - unless you want to potentially expose your account information to hackers and have someone use your card information.
I learned this the hard way when someone charged hundreds of dollars onto my debit card after I paid for a ferry via an unencrypted Skype call.
Instead of using open Wi-Fi networks, find a virtual private network (VPN) and use that. CNET recently reported on the best commercial VPN services out there, including ExpressVPN and NordVPN, some of which cost under $5 a month, which is definitely worth the price for your peace of mind.
If you can't decide which one to use and you're in a rush - you really need to book that bus ticket now - you can sign up for a free one, such as Opera or Chrome's Free VPN.
VPNs also help when you're trying to find the best deals, such as cheap flights. For instance, if you're in Madrid looking for a flight back to New York City, it may be cheaper if you use your VPN and book it from the US or another country.
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