7 Types of Financial Safety Net for Long-Term Travel

400 Flares 400 Flares ×

Prepare for emergencies during travelYou may be the most adventurous adventurer there is, but even you probably wouldn’t want to end up with no money in a foreign country.

It’s always awesome to encounter the kindness of strangers during a trip (like the time I ran out of local currency in Taiwan). It’s not so awesome to be in a position to need strangers to extend their kindness.

You don’t have to have everything figured out before you leave home, but it’s important that you have some sort of financial safety net in case things go wrong.


Types of financial safety net


1. Savings

Every traveler I’ve interviewed starts his or her journey by saving some money.

If you are on a round-the-world trip with fixed travel dates and don’t plan to work at all along the way, you should have a big chunk of cash to cover all your expenses during the trip.

If you’re on an open-ended long-term trip, at the very minimum, you should have enough savings to cover three months of your living expenses and your airfare home. This should give you some peace of mind as you explore ways to earn an income as you travel.

Click here for some money-saving tips to get you started.


2. Work income

You can do without savings if you already have a job lined up at your destination. Many travelers manage to secure jobs as English teachers before leaving home. Other popular gigs for travelers include working as au pairs or hospitality staff. You can also build a career working online, which would give you more freedom to travel.

Working as you travel is the best way to go if you have outstanding debt like student loans or credit card balances. Many of these jobs provide accommodation and food, so you’ll be able to set aside some money if you’re careful with your spending.

Find out what kind of jobs other travelers get abroad to support themselves or how they earn money online.


3. Passive income

You don’t have to work if you can find some other way to earn money. Many people call this passive income, although that isn’t always accurate as it’s rarely completely passive. There’s usually some maintenance work needed, but this kind of income doesn’t require much involvement from you. Examples of passive income: pension, rent and dividends.

Read up on what passive income means for travelers.


4. Travel insurance

You never think it could happen to you, but it totally could — I’m talking about accidents, illnesses, burglaries, lost bags and many other scary things that seriously could happen to you. If you need some convincing, watch these Bondi Rescue clips from YouTube. They’re entertaining and educational.

Get a quick insurance quote from World Nomads — this insurance company is a clear favorite among seasoned travelers and often partners with brands like Lonely Planet and National Geographic.


5. Credit card or line of credit

It’s not ideal, but when you have no other option, a credit card or a line of credit can be a lifesaver. One of the travelers I interviewed, Megan, sometimes uses her credit card when she runs out of money, then pay off the balance as soon as she can.

Don’t plan on using them as the main way to fund your travels, though. It could take a long time for you to pay off the balance. And those high interest rates? You could use the money to travel more instead.

Using your savings is always the better way to go. So if you have the choice, put off your trip by a few months and save up some money instead of putting everything on the credit card now.

Check out what other travelers have to say about borrowing money to travel.


6. Other people

This is another emergency safety net. Most people wouldn’t want to admit it, but I’m sure many travelers have called home to ask a friend or a relative for some money to get them through difficult times. Thanks to Western Union, there’s an easy way to send money anywhere.

If you ever find yourself in a situation where you have to seek financial help from your loved ones, do so responsibly. Pay them back as soon as humanly possible — with interest, if you can. Get them thoughtful gifts on their birthdays. Be available for them when they need your help.

In this interview, Milene told me all about how her parents helped her when she was looking for work in Argentina.


7. A ticket home

If you have fixed travel dates, it pays to purchase an airfare for your trip home as soon as you can. This way, no matter what happens during the trip, you would always have a way to go back home, where your support system is.

Various parties have come up with complex ways to determine the perfect time to book a flight, but there’s really no secret formula to always get yourself in the Goldilocks zone of travel booking. If there is, it’s bound to be overly complicated because it has to take into account your departure point, destination, travel dates, airports, airlines, whether you use air miles, etc.

Keep it simple and be the early bird that gets the worm.

Check out my three-step guide to quick and easy travel booking.


Image: Kat (CC BY-SA 2.0 License).

Like what you've read? Get exclusive Nomad Wallet updates and the FREE seven-part You Can Afford to Travel Too! course


  1. We all know travel is a lot of fun. But with all this travel fun, you need funds. For most of us the best way is to save up for it. And it makes a lot of practical sense to ensure there’s enough buffer in the kitty to get us through any kind of a tight situation. Your tips are most welcomed.

    • Thanks for dropping by, Hamish! You’re right, saving up to travel is still the easiest way to go for most people.

  2. Great list! I think one of the biggest financial safety nets is an organized plan of attack. Most that venture on this journey are coming from a “cushy” desk job and have had enough. Organizing an extended leave or sabbatical is one of the best ways to create a safety net, both financially and mentally.

    • That’s a good point. If your boss is fine with you leaving for 1 year and coming back to work for him, then take advantage of that. I didn’t include this because I wasn’t sure how common this was.

  3. Great tips. I can totally relate to that. It’s not much fun when you get stuck with no money abroad. However, there are endless possibilities of earning money when travelling from doing some part-time work on the road, blogging or freelancing :). Thanks God for the Internet!

  4. Even as a part-time traveler we save a lot for travel. People don’t always realize how much saving and planning it actually takes! Right now, we are building our passive income in an attempt to retire (somewhere warmer and cheaper!) one day – hopefully pretty early. It definitely takes effort, and its a slow process. But it will hopefully pay off in the long run!

    • It seems crazy to me that people think only rich people travel! Meanwhile, the same people have two gas-guzzling cars in the family and expensive toys, but complain about not having enough money to live on.

      All the best with your quest for passive income! It’s a big undertaking that can also pay off big time. I’m always interested in how people build passive income, so do share more about that if you want. :)

      • I couldn’t agree more with your first statement! It basically describes most people we know – haha!

        Right now I dabble in long term investments in stocks as well as EFTs and bonds (outside of our actual 401ks). From these, I hope to save/make enough to purchase a property (did I mention the somewhere warmer part?) that has rental potential.

        • Thanks for coming back and answering my question, Katie! Maybe we’ll be neighbors someday, somewhere warm. ;)

Speak Your Mind


400 Flares Facebook 7 Twitter 244 Google+ 26 StumbleUpon 123 400 Flares ×