How The Happy Nomad Tour Rolls – Money

Many people have asked me how I could just leave my job and seemingly travel perpetually. How can I afford it? How do you find places to stay for free all the time? How do you find places to volunteer? All questions I’ve received by email, and now I’m sharing the secrets in a series of posts about how The Happy Nomad Tour Rolls and what things are like behind the scenes.

Money

Dealing with money is actually pretty easy. Just go to the ATM!

That said, it is a bit more complicated than that. For example, I am writing this on my way to Venezuela, where exchanging U.S. Dollars in the black market will get you twice the exchange rate you can get from a bank or ATM.

In Colombia my Danish ATM card didn’t work at the first three ATMs I tried so I used my U.S. one. But my Danish card later worked. But in general, using an ATM is your best bet. You get the bank exchange rate and often just have to pay $2-$5 depending on your bank and the one you’re getting the money from.

In many developing countries everything is generally done in cash. I think I’ve only used my credit card in Mexico and Peru so far, and in both cases it was to buy bus tickets. So you’ll need to carry more cash than you’d like to.

Each place has its own “profile.” So far, for the things I need to spend money on, things have been cheaper than I’m used to. Food is usually quite cheap, internet cafes, accommodation when necessary, transport, etc. Once you get to a place you get a feel for what things cost. Nicaragua had pretty expensive food for some reason. El Salvador had extremely cheap transportation for some reason. Every place is different.

Be prepared to get ripped off by locals, especially in the beginning. It’s inevitable. My point of view is that as long as it’s cheaper than what I’d expect then so what? Later I’ll become accustomed to the real price and make better decisions. Getting upset over $1 here and there is a waste of energy.

Despite having an MBA, the average person in a city market can negotiate far better than I can. And almost always when they hear my accent they raise the price 50-100%. When this happens, depending on what I want to buy, I often leave. I don’t patronize sellers who try to take advantage of the fact that I’m a foreigner even if I can get them down to the real price by telling them I didn’t arrive there yesterday. Conversely, when someone gives me the real price from the start, I patronize them and for some reason feel a warm bond with that person for not trying to take advantage of me.

Again, all of this is harder when you don’t speak the language. It’s hard to negotiate the price when you don’t know the numbers in another language. So bring a calculator and they can show what the price is! Use the calculator as your negotiation medium!

I would never try and gouge a local vendor here as they really do work hard and have it pretty tough. But I appreciate fairness and that’s all I’m after.

Paying For Things

To push for fairness, I often approach things differently in different situations. If I generally know what the price of something should be and don’t need to ask any questions, I usually just order it (like a coffee on the street or a bag of fruit) and hand over a note that certainly covers the cost of what I’m buying. This is what you’d do as a local. Even though prices are rarely posted, a local person knows what the price should be and wouldn’t ask what the price is. Be confident. Speak as little as possible (when you have an accent), and you’ll come out ahead.

However, in many cases I don’t know how much something should cost or I need to talk at length about something to make sure there is no milk/cheese/lactose in something. Then they get the upper hand since local people would know that a certain dish has cheese, etc. In these cases, I always ask how much something costs before ordering then. If it seems fair, I go for it. Better for me to get ripped off than have intense intestinal pain for the next few hours.

Exchanging Money

Speaking of fairness, I generally avoid exchanging money. I exchange a little bit at the border to give me what I need until I get to an ATM. Similarly, when leaving a country I exchange the old currency for the new one at the border. But be careful. I’ve received counterfeit money doing this in Ecuador.

Often once you get inside a country the currency of the previous country becomes more and more worthless. I traveled with two Danish girls from Honduras to El Salvador. They didn’t exchange their Belize Dollars at the border, and they simply could not get rid of them afterward. Take a lower rate to get rid of the money upon leaving if you have to.

And be aware of scams. Many money changers have rigged calculators designed to cheat you. Do you own calculation before reaching the border. For example, if you will exchange $20 when leaving El Salvador for Honduras, you know that at 19 Lempira per Dollar you should get around 380 Lempira. If someone offers you 300, move on.

Sometimes, conveniently, there is a bank right at immigration as was the case at both Nicaraguan border crossings I went through.

Develop mental tricks for quick conversions in your head when out and about. You don’t want to be calculating everything with a calculator. Each place will require something different. In Honduras it was about 19 Lempira per Dollar so I divided by 20 (divide by 2 and cut off the last digit) to keep it easy. In Colombia it was 1930 Pesos per Dollar, so I divided by 2 and cut off three zeros. I divided by 8 in Guatemala, 12 in Mexico, and in Costa Rica I divided by 2 and removed two zeros. Just figure out a system  that works for you and use it.

Just be careful you remove the right number of zeros or you’ll be in for a big surprise!

Just In Case

One final tip.. It’s always a good idea to have some extra U.S. Dollars on hand. Euros may be fine in some places, but in Latin America it’s Dollars. I remember arriving to the Taipei, Taiwan airport in 2006 and the ATM system for the only bank in the airport wasn’t working. If I hadn’t had some foreign currency on me, I would have been stuck at the airport unable to buy a train ticket to the city and unable to pay for my hostel. I exchanged my leftover South Korean Won for Taiwan Dollars at the Seoul airport which gave me just enough for a train ticket upon arrival to Taiwan. Once inside the city, I found an ATM that worked.

Disaster averted. Lesson learned.

Safety

I covered how I keep myself safe when it comes to money in the security post.

Anything Else?

If you have any more questions, put it in the comments below and I’ll either answer your question there or write a new post covering it.