Today is the start of my first business trip. I’ll be gone the rest of the week, returning home on Saturday.

In training, we were told a few things about business trips:

• Business travel should be cost neutral. All meals and reasonable expenses (i.e., taxis) will be reimbursed. I appreciate this because if it were on my dime, I might walk a mile to the metro station to take the metro into DC to catch a train; since I can expense it, though, I will be more comfortable taking a taxi to the train station.
• Expenses should pass the “red face” test. If my face turns read telling my manager about a business expense, I should just pay for it myself. I guess that means no mani/pedi on the expense account.
• Carry cash, and do not count on management to pay for cabs.

One rule of thumb for carrying cash when traveling is to take $1 for every mile away from home. On this trip, I will be 450 miles from home. $450 seems like a lot of money to carry!

To figure out how much cash to carry, I estimate my expenses:

Taxis: $200-$300
I will be traveling with three other people, so we might take turns paying for cabs. But, I would hate to run short and will budget for paying for all of the taxis myself.

Meals: $70
For the most part, meals can be paid for with a credit card, and I can put the tip on the credit card. If I buy something small or from a street vendor, it may be easier to use cash. If we go out to a bar, I will pay for drinks with cash because I am hesitant to open a tab with a credit card.

Hotels: $0-30

Hotel arrangements have already been made, and the only cash hotel expense I foresee could be tipping.

Everything else that I can think of I can pay for with credit card (and I have a separate credit card for business expenses).

That puts my cash expenses at $300-400, which is not too far off the $450 estimate based on miles-from-home.

After the reader question earlier in the week, I wanted to share a few stories from traveling abroad.

Credit vs. Debit

On a very crowded subway in Santiago, my wallet stolen. The wallet contained a small amount of cash, a credit card, and a debit card. It was trivial to cancel the credit card and all fraudulent charges were immediately removed. With the debit card, though, I had to spend a half day and $50 running around Santiago gathering a police statement and sending notarized documents back to the US.

My back-up plan for money in Santiago was a second credit card tucked away in my suitcase at the hotel. I was able to use this credit card for large expenses and borrowed cash from a friend, who I repaid with a check when we returned home. An alternative would have been to carry travellers checks.

I was later told (after being followed by a pickpocket from the streets into a museum and then being ‘rescued’ by a security guard who kept watch to make sure nothing happened) that my watch was too flashy and indicated that I had a lot of money. This was a $15 watch from Target (trust me, it wasn’t flashy). In the US, no one would have mistaken this watch for an expensive watch. The nice Chilean ladies at the museum gift shop said that my wallet was probably stolen because I wore this watch.

ATMs

During my four months in Hungary, my landlord called on a Sunday morning and wanted two months rent on that very afternoon. I had the money in my bank account and went to the nearest ATM to make the withdrawal. What I did not know was that ATMs in Budapest ran low on Sunday morning. I could only withdraw half of one month’s rent from that ATM, and I ran around town withdrawing small amounts of money from five different ATMs.

Health Insurance

In Hungary, an American friend Kat tripped while getting off the bus and had to see a doctor. I do not remember the details now, but she was mad that she had not bought an international insurance plan.

Food

One of my classmates in Hungary was a tall guy with a big stomach. Each morning, he bought the biggest loaf of bread he could find. He ate that all day and then ate a nice dinner. The bread was one of the best deals of calories/$.

During spring break in Greece, I made a sweet bread to accompany dinner. Because none of my companions nor I spoke or read Greek, we bought salt instead of sugar. Fortunately I tasted the dough before baking the bread, and I discovered our mistake — it was the worst bread I ever made. I was ready to give up, but a hungry friend returned to the store and found sugar so that I could make another loaf.

Holidays and Vacations

Traveling in the off season (i.e., fall and spring) can be cheaper than in the peak summer season. This can be prime time to negotiate. When buying souvenirs from small vendors, you can usually pay less than the listed amount. Talk with locals or other students to find out how much can be negotiated.

Exchange rates

Don’t change all of your money ahead of time. If you feel better, go ahead and change some in the US, but you can usually get better exchange rates abroad.

A reader, Jenny, asked about managing finances when studying abroad in Spain for a semester. If you have a question, send me an email or use the comment form.

Bank accounts

This is my advice for a college student studying abroad who is not earning income (or is earning a minimal amount) and has saved enough for the trip: take a credit card and a debit card. Before leaving, set the credit card account to be paid with automatic payments. Keep the ATM card at home except when you are using it.

In the event of a stolen card, credit cards generally provide better protection than debit cards (some debit cards offer comparable protection, but you have to check the details). If you notice the credit card or debit card is missing, call the issuer immediately. To make this phone call, you need to know the number. Before leaving, prepare a list of emergency numbers — emergency contacts back home, the study abroad office, and your bank/credit card phone numbers. Keep a copy with your belongings and leave a copy with a fried or family member.

For most students abroad for a semester, a local bank account is probably not necessary. Opening a bank account can be difficult if you do not have the necessary documents (proof of address, proof of a job, and sometimes proof of citizenship or residence). Modern ATM networks are extensive, and they should provide enough access to your cash.

Call your bank to ask about fees at international ATMs. In my experience, the fees cost a few dollars. By making fewer, large withdrawals (as opposed to frequent, small withdrawals), you can pay less in fees. Check with your bank to see if there are some ATMs that you will not be charged for using.

Think about a budget

Jenny said this is her first time to deal with money on a daily basis. At college, she has a full meal plan and only needs money for occasional expenses. In the summers, she took jobs that provided a meal plan and sometimes housing.

There are three basics to a budget abroad: housing, food, and transportation. (Jenny is covered by her university’s health plan, which has international coverage, so she does not need to buy a separate plan). Then there are the fun expenses: traveling, souvenirs, …

Housing - Jenny is taken care of here; her study abroad program hooked her up with a homestay.

Food - One of the best cheap meals in Europe is bread and cheese from a grocery store. With a homestay, breakfast may be provided and sometimes dinner too. Grocery stores can be intimidating in another country, but you can stick to the basics — rice or pasta with vegetables.

Transportation - One of my favorite things about Europe is the extensive public transportation network. In large cities, there are typically subways, trolleys, and buses. In smaller towns, there may only be buses. Check with locals about the best way to travel (you might find a monthly pass with a student discount)

Holidays/vacations - Consider taking some weekend trips to nearby towns (or countries). A great planning resource is the Lonely Planet Guidebook series. Lodging and restaurants are sorted by price with frank descriptions of what you get for the money. Before leaving the country, make sure your visa allows re-entry!

Resources

Whenever traveling abroad, check the State Department website. It has important information (such as if the country is unstable and Americans should not visit) and some silly advice for students (“try not to make a spectacle of yourself”). Though maybe it isn’t so silly in light of the increasing numbers of Britons arrested abroad.

One way to use airline reward miles is to get a round-trip ticket between two cities in the mainland US. An easy way to get more from your frequent flyer miles is to extend the trip to one more city. For no extra miles, another city can be added to the ticket as a stopover.

On American Airlines, the small downside of this wonderful deal is that reserving such a ticket is currently not possible online. It requires calling a representative, which incurs a $20 or $30 charge.