The Biggest Money Mistake People Make When They Start Travelling Full Time

Imagine waking up in a foreign country without access to your money.

You had to withdraw some money after you landed, and the commission both ATM and your bank took was 30%. They charged you with a foreign currency exchange fee. The exchange rate itself was suspicious too.

That ATM never returned your card. What’s more, your bank blocked your account altogether. Withdrawing money from a foreign country seemed suspicious to them.

Sounds like a nightmare?

I wish. It is a probable reality if you keep your money in your local bank while traveling.

Banks equal stability and security, right?

Wrong.

It is natural for us to trust a local bank. And we never even ask if it is the best bank for us. It happened to be in our country, close to us, and convenient. All our money is there. So we stick with it.

Banks are notorious for complicating a perpetual traveler’s life. They offer draconian exchange rates. You pay additional unexpected fees (you thought they were transparent, huh?). The limits are strict, and you can only change them so much. Let alone all the complications with support in case something goes wrong.

To illustrate the point, I once tried to order an expensive piece of tech and used my bank account to pay. The price was way above my payment limit, so I called the bank to raise it. After all, it is my money, right? So I can do whatever I want with it.

As it turned out, my plan did not allow me to surpass that limit. Even though I did have money for the purchase, I could not use it.

Have you ever had your bank account blocked while traveling?

I cannot count how often banks have blocked my accounts for no reason other than being abroad.

They blocked me for foreign transfers and changing limits, for accessing my bank app without a VPN from a “forbidden” country. Once a bank blocked me because my roaming ended in the middle of a conversation. Even though I was calling them to address a mistake they made :D.

To unblock your account, you must visit the bank to verify your identity. Easy, right? But what if you are, like me, always on the road, a continent away from your bank? Not good.

Even if you have money in your bank account, you have little control over it and cannot use it as you please.

But what do you do instead?

Diversify

There are many banking solutions, so choose the ones that work for you and are available in your country.

My personal favorites are Revolut, N26, and Wise.

Revolut

Revolut (my referral link) has been my go-to choice for a long time. Revolut’s mission is to unlock the power of a borderless economy for everyone. Even though it is not a bank, it does hold a banking license in Europe.

It provides multi-currency accounts and fair currency exchange rates. Being able to hold money in different currencies is precisely what we need.

It also offers money transfer services and ways to budget, save and invest.

N26

N26 is my second personal favorite. It is a digital bank that operates 100% online. I once had an issue with my physical card and had to contact support. I was mentally prepared for a long conversation and many ridiculous questions. To my surprise, they managed to fix my problem through a chat in no time.

The drawback here is that there are no multi-currency sub-accounts. So you can only hold one currency: EUR.

Nonetheless, it is a more progressive alternative to a traditional bank.

Wise

Wise (my referral link) is another banking solution I use. It partners with licensed banks to provide its international services. The exchange rates are fair mid-market rates. You can have many sub-accounts in different currencies.

Wise is best if you plan to stay in an exotic country. It offers the most extensive number of currencies to hold.

Revolut, N26, and Wise offer physical and virtual cards, mobile apps, and free starter plans.

Whatever banking solution you choose, make sure to choose more than one. Even if you want to stick with traditional banks.

“Do not put all your eggs in one basket.”

— Warren Buffett

Another piece of advice learned the hard way. Anything can happen while traveling, so make sure you come prepared.