Considerations before you go (or, adulting properly)

Food + Drink + Housing < $50? No problem in Southeast Asia!

I've got this! Let's get out of here!

Anyone who has made a budget knows that there's more to it than what's on the surface.
  • What happens if you get sick? Or your parents get sick back home?
  • What if there's a political coup?
  • Or you get robbed?
  • If you hate living abroad, what will you do when you come home?
  • Taxes (shudder)?

Guess who forgot to plan ahead?


Here are a few things (mostly financial) to consider before you leave your home country.

Full disclosure: Normal Nomads contains affiliate links, for which you are charged nothing and we may make a small commission. 

  1. Travel insurance ($2100 per couple/year)

  2. Visas and baggage fees
  3. Emergency fund ($5000)

  4. Start-over fund (6 months home-country living expenses)
  5. Credit cards

  6. Taxes

  7. Power of Attorney

  8. Photocopies

  9. Personal stuff relevant to you.


1. Travel insurance: US $2100 per couple/per year (~$5.75/day)

Based on a recommendation by the lovely traveling ladies at RemoteWorkGuides.com (check out their amazing resources!) we decided on World Nomads travel insurance. It's not the cheapest, but it is widely recommended. This covers us if our flights are cancelled, we need emergency medical care, we need to evacuate a country, our locked up possessions are stolen (make sure you lock everything up), or if I catapult myself off of a bicycle trail into a marshy ditch in Vietnam (it almost happened).

A rare part of the trail with railings


Note that travel insurance is not health insurance. Like all insurance policies, read the fine print and always have the emergency numbers on hand. A good thing to note is that for medical emergencies, check their covered providers first. They'll reimburse you if they recognize the partner. You will usually still have to pay out of pocket if something goes suddenly wrong, so make sure that you have a fluid, cash...

2. Emergency fund

OK, this is definitely something that you should know if you've made a budget, but you've probably ignored. Recommendations range anywhere from three to nine months of living expenses. This ensures that if all hell breaks loose, you can continue living your life uninterrupted until you get on top of things.

I know what you're thinking: but that's my travel money! Unfortunately, it's can't be. You need this in addition to your traveling fund.

Emergency money is for more than losing your job. In our case, you may have already done that! This is the fund that you use if you need a plane ticket back home last minute, you break your only pair of glasses, or you step on a filthy nail.

Or get bitten by a seemingly friendly stray dog.


One of Bali's dangerous beasts
This money is for real emergencies. It can't be considered part of your travel money, but it should be in an accessible bank account that you can access for cash.

My recommendation is that you keep this in your checking account (or "savings account" as you say in Australia... basically the account your debit card accesses). Keep a few thousand in there in case you need medical attention or something that requires cash.

Cash accounts are scary, though, because they won't necessarily be reimbursed if your information is stolen. The safest way to pay for emergencies is to pay with credit, then pay off your debt using money that's held in a savings account (like BarclaysUS online, which has treated me pretty well). This therefore brings us to...

3. Visas and baggage fees

Visa costs vary by country, and baggage fees vary by airline. 

Some countries have free visas, which means they're a great place to start! For example, we started in Bali, where US citizens can either stay for free for 30 days, or pay US $35 for a 30 day visa and extend it for about $30 more. Thailand is free for 30 days. Malaysia is free for 90 days.

Check out my visa round-up for more info for US citizens.

If you plan to travel around SE Asia, there are a lot of cheap local airlines that offer economy fares. The thing to remember about economy fares is that they don't include any extras. This means meals and baggage are extra. For example, AirAsia has a Value Pack bundle that includes a meal, travel insurance, and one checked bag for about US $25. Per flight. Every time. If you're going to 10 cities, this adds up to $250. That's substantial!

No.

We have decided to skirt these fees by keeping our backpacks under 7kg (~15lb). No more baggage fees!

(Check out our packing lists for men and women and Warren's handy travel vest to understand how we've done this.)

4. Start-over fund (6 months home-country living expenses)

You may have wonderful friends and family who are willing to host you, should you find yourself heading back to your home country. You may have a job you can walk back into when you get home. In those cases,  you really don't need much to start over again.

For us, we want to make sure that we can move to whatever city has the best jobs available, rent an apartment, furnish it as much as necessary, buy an interview suit and pay for transportation to job interviews, and still be able to eat.

Probably not enough.

It adds up. We've got six months of living expenses stowed away in a Vanguard individual account that we can access with a bit of notice.

Plus, think of it this way: if you never use it, you're saving up for retirement!


5. Credit cards

This is normally the point where I tell you that credit cards are budget killers and should be destroyed. The "credit score" system is a sham designed to make sure that you're paying banks as much as possible for the rest of your damn life.

BUT I GUESS they're good sometimes. Especially in emergencies. And the best way to have a substantial amount of credit available is to have "good credit", which takes time to amass. For more information on how to get good credit, go to literally any big business finance website, or bank website, and they'll be happy to tell you how to give them all of your money.


Spoilers: you lose

But I digress.

Credit cards come with two major benefits: insurance against fraud/theft and rewards programs. I will ignore interest rates, because if you've saved up money to travel, you should always pay your balance in full.

In terms of insurance, they're all basically the same. You can find horror stories about the failures of reimbursements for theft, but for the most part it may just take time. It's usually pretty painless.

Rewards are more complicated. Do you want cash or points? Categories or overall spending? For travel, a card that charges no international transaction fees is essential. That still doesn't narrow it down, so the way I decided on a good travel card was based on bonus sign-up points.

People have mastered the art of credit card points and done a LOT of research into this. The Points Guy does a good job summarizing the best credit card options for Americans. For me, the best choice was the Chase Sapphire Preferred card (use this link for 50,000 bonus points for you and 10,000 for me). No international transaction fees plus bonus points when you use it for flights, hotels, etc... since that's all I'm using it for, it's a great choice. Plus, if you use your points through the reward center, you can get a 25% bonus -- that's $625 in points cash once you have spent $4000.

I spent my $4000 quickly by paying for a year's worth of travel insurance ($2100), buying an AirBnB gift card for my husband ($500), purchasing tickets to Bali from LAX ($900), and putting our first six weeks of accommodations on the card ($521). $4021 just like that! VoilĂ ! Points galore!

Don't forget to pay it off immediately or credit cards revert back to their evil true selves!

Speaking of anthropomorphizing an inevitable part of society...

6. Taxes

If you were working and aren't anymore you will likely receive taxes back when you file. Congratulations! This is due to taxes being calculated in the US based on how much money you expect to earn annually, e.g.
  • I earn $60k annually, so I am taxed monthly on my $5000 earned, at the rate of earning $60k.
  • If I quit six months into the year, I have only earned $30k, so my tax bracket is lower.
  • Therefore, I will receive a tax return that accounts for my overpayment.
Nice!

However, if you start working independently doing freelance work, this will quickly become more complicated. You now have estimated taxes and deductions, and just that should be enough to elicit an audible groan.

This is your brain on taxes

I'm a stickler for rules, and am also terrified of taxes, but luckily there are a lot of resources out there to help. I'll again refer you to Remote Work Guides for their tips on taxes, since they've been at it a while and I'm still basking in the glow of not working!

If you're feeling particularly cunning then check out taxnomad.com and PLEASE let me know if you manage to live tax-free!

(For the record, taxes keep our societies running and help people out of bad situations, so I'm not suggesting that we all skip out on paying taxes. But you do you.)

I think the #1 easiest way to do your taxes is to pay someone else to do it. Even better, have a trusted family member do it.

 Just kidding! No one loves you that much! Filing taxes is awful!

This does, however, bring up an important point. What if urgent legal issues arise back home and you're doing a meditation retreat in Tibet? It may be unlikely, but it's wise to account for the possibility by setting up your...

7. Power of Attorney

We have excellent, trusting relationships with our parents, so we have each assigned our mothers as our POAs. This is a simple process: simply find a free Durable Power of Attorney form online, sign it with your POA in front of a notary, and have it notarized.

Don't forget your John Hancock, or as the above image illustrates, your Iuu V...

You may want to send or bring a copy to your bank before you go, to make sure they have it on file.

A notarized form gives your POA the ability to make decisions on your behalf, based on your instruction. You can limit it as much as you want.

8. Copies of everything

I suggest making digital copies of everything (passports, vaccination books, medical records, visas, credit cards, drivers licenses, etc.) and leaving them with a trusted source on a hard drive. Put them on the cloud, too.

Take physical copies of things like passports and vaccination books with you. We also have our marriage certificate which is especially useful since we do not have the same last name, and in some countries it's a big deal that you're married if you plan to live together.

Photocopies can allow you to leave your passport locked away, without being unidentified in case of legal troubles (like getting pulled over riding a scooter in Bali).


9. Personalize it!

Finally, recognize that this is what works for us. You may have prescriptions you'll need to fill or terrible credit or other family obligations. If you have a hard time buying clothing or shoes, make sure you have what you'll need to get by in foreign countries.

Do not ignore your life in pursuit of travel. You can run away from some things, but you certainly don't want to destroy yourself because you were too lazy or foolish to maintain a reliable life back home.

I'm looking at you, guy-who-never-pays-his-taxes and gal-who-thinks-student-loans-will-disappear and friend-turning-a-blind-eye-to-medical issues!

Girl, you know that's not normal.


Now you're ready! Go and get your adult on before you depart!

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