The real fun of travelling can only be got by one who is content to go as a comparatively poor man....it is not money which travel demands so much as leisure, and anyone with a small, fixed income can travel all the time. Frank Tatchell, England, from The Happy Traveller: A Book for Poor Men, 1923
The good news is it doesn't take much money to backpack anywhere around the world. I never thought I had enough to see Europe in a worthwhile way until one day in a bookstore I read that campgrounds abounded all over Europe. Many of these were smack in the middle of interesting cities I wanted to see, and only cost a few dollars per night. So I calculated if I fed myself from supermarkets and pastry shops I could do it for practically nothing.
That first trip in 1990 lasted two and one-half months and cost $2300, including airfare to London and the return from Athens. I met dozens of people, some of whom I traveled with and got to know fairly well. I became a little serious about my French, and at one point was able to communicate in a foreign language for the first time in my life. I went to many of the greatest art and cultural museums in the world. I saw the City of Light. I wandered about the Acropolis. And as I stood outside Socrates' cell I thought to myself over and over, "How can this be?"
Good value? No, the greatest value. The next year I went on a five-month walking/hitchhiking tour of Europe for $3300, again including airfare both ways. I was a smarter traveler that time, met more people from all over, got to know them better, and had more fun.
I heard concerts by some of the world's greatest musicians in some of the world's most fantastic concert halls. I found my own piece of the Berlin Wall, and even traveled with a former communist party boss whose main course of study in his youth was "The History of the Party."
I've made six more trips since then, including an interesting month in Mexico for less than $400, and three months in Central America for $1000. (And I assure you living on 5 or $10 per day in Guatemala is rich in many ways.)
One passing German, who seemed to be making a study, believed the average veteran backpacker traveler worldwide spends about $25 per day. I would agree. In most of the developing world 15 to $25 will get you a cheap hotel, at least one restaurant meal, and a few beers at the end of the day. Many careful backpackers also get by in Europe, North America, and Australia on $25 a day.
Remember to always carry the bulk of your money, including traveler's checks, credit cards, airline tickets, and passport, in a hidden money belt next to your skin. See the next chapter for Pickpockets, Thieves, and Self-Defense.
What are exchange rates?
As I write a U.S. dollar is worth about five French francs, one and one-half German marks, one-hundred ten Japanese yen, 1500 Italian lira, and eight Mexican pesos. One British pound is worth U.S.$1.60. These rates vary as national economies vary. Because you get five francs for one dollar does not mean France is one-fifth as expensive as the U.S. Since France and the U.S. are both highly-developed economies, prices are roughly similar--what costs five francs in France costs about one dollar in the U.S.
As exchange rates vary, however, things get dearer or cheaper. In the early 1980's the U.S. dollar became overvalued to eight francs per dollar. It was a record time for American tourism to France as France was "on sale." But the U.S. was too pricey for French tourists, and our exports suffered. Gradually the U.S. dollar weakened to a more balanced level.
Should I get foreign currency before I go, or wait until I get there?
Many guidebooks advise getting $50 or $100 of foreign currency for each country you plan to visit before you leaving your home country, so you won't be hassled at the airport or train station when you arrive. I have never bothered with that, and probably never will. Few backpackers do. Foreign currency is expensive when bought in the U.S., and the trouble of buying it in advance almost always outweighs the trouble of buying it when you get there, which amounts to no trouble whatsoever ninety-five percent of the time.
Once in a great while I will buy some currency one country in advance if I think I will be arriving at an odd hour, but even then when I arrive I usually find I didn't need to, and that I got a rip-off rate of exchange where I was. As long as you have a few mighty greenbacks in your moneybelt for emergencies, you won't ever have much of a problem getting money exchanged.
Credit Cards and ATMs
Many travelers now use their credit and debit cards to complement or replace the old standby of travelers' checks. Most upscale restaurants, hotels, and shops now accept credit cards, with Visa far more accepted than American Express. Note, however, that most of the hotels, hostels, and cafes frequented by budget backpackers do not accept credit cards.
Also useful for the budget traveler are the tens of thousands of automatic teller machines which are linked around the world. My Cirrus system card currently works in sixty countries, including 10,000 machines in the U.K., 1000 in France, 1400 in Austria, 3000 in Turkey, 300 in Israel, 3600 in Mexico, 1800 in Australia, and 150 in Thailand. Note that 150 ATM's in Thailand means they are few and far between, especially when you consider the thousands of possibilities for cashing travelers' checks there.
Check with your financial institution before you go to determine system compatibility, and how much you can withdraw per day or week, etc. Note that some international ATMs won't accept personal identification numbers of more than four digits, so get a shorter PIN from your bank, if necessary. Also note that some international keypads have numerals only--no letters. Therefore you need to memorize your PIN by its numerals.
Besides convenience, the big advantage of using plastic is you get your funds converted at the wholesale exchange rate (what you see in the newspaper) rather than the retail rate (at banks or cambios de change), which is usually from two to ten percent not in your favor. Therefore you could save up to $10 on a $100 withdrawal as opposed to cashing a $100 travelers' check at a cambio de change with a bad rate. You will usually save $2 or $3.
Furthermore, with credit cards this exchange is not posted for up to a month after you make the transaction. Thus in a high-inflation country, or in one whose currency is losing ground to the dollar, you benefit by charging. An example is Yugoslavia in 1990 when a 500,000 dinar hotel bill ($50 in July) would cost you only $25 when posted in August, due to 100% monthly inflation there.
Photo: This many dinars is worth a house, a beat-up Skoda, or a skinny sandwich?
You should carry at least some travelers' checks in case of loss or mishap. The magnetic tape on the back of credit and debit cards may wear out, rendering it unusable. And while you should be able to get the card replaced overseas, I would not want to wait while some Guatemalan or Turkish bank goes through their bureaucratic shenanigans. It took a friend ten days to get her credit card replaced in Guatemala, and also cost her $100 in phone calls. Your bank probably has a card-holder to protect that precious magnetic tape.
When making a credit card transaction overseas--but especially in developing countries--you should be extra careful of fraud. Keep the card in sight while they make the print. One trick is to run off several prints on your card, and then have you sign both with a carbon. Also be certain the card you get back is your own. While this happens rarely, it may be more common than in the U.S.
Travelers' Checks
Most countries have a "best" place to exchange travelers' checks. Check your guidebook. In enlightened countries like Norway you get the wholesale rate at the post office. In others banks, railway stations, or even cambios de change offer the best rates. American Express offices usually offer a decent rate, and a slightly better one for their own checks.
In some developing economies the problem with travelers' checks is not so much getting a good rate, but getting them cashed at all. In such areas it is a good idea to carry the brand that is most likely to be familiar to the clerk or bank--which is usually American Express. Worldwide offices of AMEX are a plus, and may hasten your check replacement. CitiBank and Visa traveler's checks are also good. Thomas Cook and Barclays' are popular British brands.
Many people ask about wiring as a means to transfer funds while traveling. Wiring is not often used by backpackers due to its complexity and expense, but is something to know in an emergency. Wiring between advanced countries is not difficult, but it's not particularly easy, either. One friend who visited me in Texas transferred money from her account in Germany to my account here. To make the transaction she had to have an account here to transfer it to, the routing number of her bank in Germany, and she had to have an authorized person named on her account go to her bank and sign for the transaction. They wouldn't let her do it over the phone.
Her cost was only $10 for a $1000 transfer, but this varies greatly from bank to bank.
Another friend called from Guatemala totally broke and with most of her gear in hawk. Guatemala Bell policy would not allow her to make a collect call to her family in Europe, but luckily they would to the U.S. On her own she had been struggling for a week with the biggest banks in Guatemala to get a transfer from Europe, without success. I called her father who finally got the money transferred.
I also called Western Union in the U.S. to inquire about an emergency transfer to Guatemala, if needed. A $200 wire transfer cost $25, could be charged to a credit card, and would arrive in a few hours.
One traveler with great experience in India and Sri Lanka summed up developing world wire transfers this way: "Instantly everyone from the bank president on down knows there's a very interesting transfer of hard currency on the way, and soon after that several layers of intermediary banks and government bureaucracies know about it, and by then everyone in town knows about it, and they all need to try to sell you something or at least look you in the eye before they bring bring out their oh so important stamps of approval with a huge flourish."
Black Market Exchanges
Some second and third world countries have their currencies pegged at artificially high exchange rates, or they prohibit their citizens from possessing over a certain amount of foreign currency. Thus there may be a legitimate reason for noninstitutional currency exchanges. Unfortunately, many black-marketers who are honest to the last penny with their regular local customers may try to cheat you, the "rich tourist."
In Budapest I selected a moneychanger with slicked-back hair, flashy shoes, and a crisp polyester shirt--indeed the perfect shyster stereotype. He offered forints for dollars at about twenty percent over the official rate, which I thought was reasonable and just.
While he pressed me to exchange $100 or more, I was willing to risk only $20. He counted the forints three or four times into my hand, flashing the money fancily. Each time he let me count and examine the bills on my own, then took them back and did it again. Somehow this shrunk my brain to the size of a pea. I fished out my $20 and exchanged it for his roll of forints, and then hurriedly walked away to avoid the police who were undoubtedly about to spring. Half a block later I was shocked to discover I had been hooked for $18.
The lesson is if you make a black market exchange, count your money and hang on to it. Also make sure the notes are not counterfeit, or that they are not a less valuable currency from a nearby country.
Baksheesh, Mordida, Payola, Dashing, Grease, and Tribute
Since traveling necessarily brings you into contact with the ever-present bureaucracy of travel, you may now and then be extorted for a few dollars by petty officials, usually in developing countries where they may be so poorly paid as to make it almost a requirement of the job. On the other hand I have seen such officials make out like bandits--shaking down a boatload of twenty travelers for a two dollar "tranportation tax," each.
Probably the best policy is never to pay any bribes, out of principle. But there may be times when you are tired, in a hurry, or desperate, and you need things expedited. Even in these cases do not offer money unless you are certain such is being hinted. You don't want to corrupt anyone unnecessarily.
If you get in a situation where you think a small payment may help you in some way, and it appears the official is more-or-less playing for such a bribe, don't use a word such as "bribe" or "mordida" to describe the transaction. Instead, call it a "tax" or "fee." You don't want to be clumsy in this delicate situation--you could end up paying more than you need, or waiting weeks for your visa or whatever.
Indirect talk is the best way to get what you want in these situations. "Is there a tax I could pay?" "Perhaps if I pay a smaller fee you could still find a way?" Etc.
Usually a few dollars is enough to get the wheels turning. If you are asked for more than you are willing to pay, or you refuse to pay anything, it's best to remain polite, perhaps pretending you don't understand, and act like you are in no hurry and are happy to sit and wait.
During one driving tour of Mexico I was stopped at checkpoints by Federales approximately every 200 miles. About half the time or less I would be slightly pressed for "contributions" or "tolls." I found it extremely helpful to forget most of my Spanish and lower my IQ. It's also a good idea to keep your license somewhere other than your wallet, and have a few small bills stashed in a pocket so you don't have to fish your main money supply.
Over 2400 miles of driving I made two payments, one for $2 and another consisting of $5 and two Negro Modellos (one of my favorite beers), and that in the dead of the night on a desolate road.
Once in Guatemala I avoided paying a "tax" by asking for a receipt. A few minutes later he came back saying he had checked again, and I didn't have to pay after all.
I doubt any of this will work for American backpackers trying to get seven-day transit visas across Iran.
Spending Money
Some budget travelers may become obsessed with always spending as little money as possible. This is especially true for those who have the time to travel as long as the money holds out. From my experience this is not the best attitude. It is worthwhile to splurge on cultural events, some kinds of tours, and the occasional good restaurant. The traveler is spending plenty of money to get wherever he or she is, but sometimes it costs a little more to get the most out of there.
While I usually spend the money for any museums and cultural events that interest me, in my early travels I overlooked some terrific opportunities. On my first backpacking tour of France I never once splurged on a truly excellent restaurant meal. I was too caught-up in going as far as possible on as little as possible. Now I have to cope with the silly fact that while I spent all that time and money in France, I completely missed what many consider her essence--and it's not fresh baguettes.
On the other hand spending as little money as possible can have a positive affect on your travels. You may find it enjoyable to sit in a town square for hours, making conversation and observing daily life, as opposed to going to a bar and getting drunk. (Which, with discretion, you can also do cheaper in the town square.) If you are not spending money on tours and admission fees, etc., you should have more time to talk to people, play with children, and pet dogs.
Many backpackers spend more money at the beginning of their trip, moderate in the middle, and then taper-off to as little as humanly possible as the reality of going home looms colossal.
As an experiment I went without money or food for three days in a Greek industrial city, except for water and two cucumbers I scrounged. It was a profoundly interesting experience (mostly characterized by thoughts of food), but I don't care to repeat it soon.
How to Get Money From Your Parents ( i n c o l o r !)
The Art of Bargaining
One of the oldest and most basic human skills is bargaining, but many westerners have completely lost the art.
To bargain successfully the single most important factor is the apparent ability to walk away from the deal. Everyone knows you are relatively rich and can afford an exorbitant price. Therefore you must look convincing when you reply to the pick-up truck driver who is asking $10 for a ten-mile ride--when the other passengers are paying only a few dollars--"No, that's too much, I'll walk."
Your bargaining power is severely eroded if you look dead-tired, if you have already loaded your pack into the back, or if your over-protected-daughter Danish companion is pleading with you to accept the price.
There is absolutely no need to pay $10 for the ride. The driver is not going to drive off and leave money behind. That would be as foolish for him as you paying the first price he asks.
Bargaining Tips
1. Take your time. You don't have to rush into anything, including the back of a truck, taxi, or airplane. Make inquiries to find the average price. If you can't spare the time to discover the true value and quality of something, do you really want it?
2. You are bargaining from a position of strength if, and only if: a) You are willing to walk away, or b) You look like you're willing to walk away.
3. Offering a price half what the seller originally offers and working up from there is not always a good strategy. Some sellers quote items at ten times their true value. If you bargain to half or three-fourths of that--which many backpackers assume must be a reasonable price--you are still paying an outrageous mark-up. Such prices are often asked by hawkers who approach you on the street with beads or jewelry. They are looking for a sucker.
4. Unless you absolutely have to, don't trade away for unfavorable terms that which you think has more value. (For instance, this book.)
5. Try not to take advantage of the poor Mayan who has been at her stand all day with few or no sales. Without knowing it you can easily drive down her price to cost or below--which she sadly agrees to because she needs the cash to buy food for her family that evening. Sometimes the best bargain is full-market price.
6. Restrain goofy purchases until the end of your trip, or mail them home immediately.
How Not to Get Ripped-Off by Taxi Drivers
Or,
Hey, didn't we pass that mule twice already?Developed-world cities regulate the number of taxis on their streets so every driver will be assured a certain amount of business. In return every taxi is periodically inspected for safety, and must charge the same metered rate: about $1.50 or $2 to get in the cab; about $1.50 per mile; and "wait time" of about $12-$20 per hour, which kicks in when the cab is stationary or moving less than ten mph. (This compensates the driver if he gets stuck in traffic.) Thus a two or three mile trip costs about $5 in rich countries.
In much of the developing world, however, there is little or no regulation of the taxi business. Anyone who has a car and a sign can become a taxi driver. It thus becomes dog-eat-dog for customers, with a bargaining system evolving that favors locals who know the score, and rips-off visitors.
Of course the drivers do not consider it a rip-off. They are merely trying to strike a favorable bargain and make a living, albeit at your expense. And while this living is usually slightly better than an average wage in developing countries, it is still not much. In 1993 the drivers of Mexico City's ubiquitous green VW Beetles averaged about $25 per twelve-hour shift, out of which came gas, maintenance, and vehicle depreciation.
The key to successful bargaining is to ask the fare before getting in the cab. Once you sit down the driver knows he has you, and you're off for a ride. Open the front door or lean in the window to get a quote to your destination. If it seems too high (and it probably will), immediately say, "No, that's too much," and make an appropriate counter-offer. Note that a $10 fare in developing countries is something that doesn't happen every day for every driver. Most short trips around downtown should probably cost no more than $2 or $3.
Even if you bargain well you will probably not get as good a rate as the locals. The driver knows you can afford more, so he will set his absolute bottom rate a bit higher.
If at the end of your cab ride the driver demands a ridiculously large payment, know that he is trying to extort money from you. Put a fair amount on the seat and get out.
How to Deal With Begging
The traveler in the developing world is likely to encounter some kind of begging almost every day. Dealing with it is a difficult issue for many travelers, including myself.
Most developing nations do not have a social welfare system to care for the old, the sick, and the infirm. Mexico, for example, has an official unemployment rate of only a few percent. This is because in Mexico if you don't work, you don't eat. Indeed Mexican bus and train stations are swarming with children and old people desperate to sell you candy, drinks, gum, and so forth. I have returned to the same station after several weeks and seen the same people walking up and down the aisles, feverishly hawking their gum and candy.
Once I was in a small shop studying a map when an old man came up to me and said something so quietly I couldn't quite make it out. I looked up briefly and said "Buenos dias," and went back to my map. Then, probably mustering all his strength, he pointed to his mouth and said "Tortillas!" When I took a good look at him I realized he was so old and infirm a gust of wind might have blown him over.
Culture is another aspect of begging. My first encounter with this was when I made a generous contribution to a small Turkish girl who had been pestering me for several minutes for "eine marka." (As is often the case, she thought I was German.) I finally broke down and gave her from my pocket what I thought was a small coin. She looked at it with astonishment and proclaimed "Fir (five) markas!" The word was out and within seconds I was surrounded by a dozen very persistent children, and even a few mothers, all badgering with outthrust palms for large amounts of money.
While I did not feel threatened by this group, it was a completely untenable situation and I had to beat a hasty retreat. They may have thought I was intent on redistributing some of my wealth, which is one of the Five Pillars of Islam. Or, more likely, they saw me as an idiot who had bumbled into town, and they were simply taking advantage of a lucky situation.
Many travelers feel they are victimized by swarms of beggars who see a "rich" Westerner. They feel it is not their responsibility to take care of the indigent of a foreign country. They may say this is a problem for the local government and people, and they have no idea who to give money to, anyway. They may also say giving to beggars encourages the concept of getting money for not working.
My own eyes have mostly seen seriously indigent people who get most of their donations from local people, but who naturally swarm to Westerners when they see one. I don't give money to every beggar, not even most. Most of the time I try to ignore them. It's easier. But now and then, perhaps a few times per week, I do make a small donation to someone who particularly tears at my heart, who usually has some kind of obvious physical handicap.
Probably such donations would be better spent at relief organizations, but I cannot help but think at least this person will have a little more to eat that night.
Child beggars are another issue. For many developing-world children begging money, candy, or pens from travelers is prime sport--and one which, from their point of view, nets them obscenely generous rewards. If their father has to work hard all day to earn a few dollars, and a backpacker has just given each of his kids enough money to buy a huge bag of candy, something, in the long run, may go wrong.
I now make my best effort not to give money, candy, or pens to children. Instead I usually give them a surprised, indignant, or quizzical look, like "Why should I give you money?" "Because you are rich!" they shout. "I save my money. I don't give it away," I reply.
They may not like this attitude, and they may throw a few stones as you trudge over the hill, but it's about equally likely they would have thrown stones anyway, and they will probably respect you more for not being a fool with your money.
I do, however, sometimes give small rewards to children who perform a service, usually by acting as a guide to somewhere (which usually turns out to be pretty darn nearby). I select one or two as my "official" guides, and let them know right away I am only paying a tiny amount. Usually I don't really need their help, but their company is pleasant, and they save me the trouble of looking at a map or guidebook. And they are earning the money. Payment in local currency equivalent to a bottle of Coke is generous for a few minutes work.
Travelers' Tips
Try not to accept torn or overly worn money in developing countries because people may refuse to accept it from you. Also, count your change immediately after a transaction, while still in front of the clerk. In Japan, however, it is considered rude to ever count your change. Anna J., Berkeley, California
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In my experience the people who have the most trouble when traveling are the ones spending the big bucks. Travelers on a tight budget get along better because they know everything is not going to be perfect all the time. Robin, Brownsville, Texas
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Beware clipjoints. If a tout approaches you on the street offering a free drink to come into a club, or otherwise tries too hard to get you to do something, you can bet there is going to be at least a three-drink minimum of very expensive drinks, or you will be overcharged in some way. Turbo Maserati, USA
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Consumer items and tourist crap rank dead last as motives for my travel. When I do acquire them, they either satisfy an immediate need, or are small, light, and cheap, if not free. M. Böröcz, Berlin, Germany