25 chapters, 100,000 words, 120 illustrations
 Table of Contents
On $25 a Day or Less
Art of Travel - European and World Backpacking

Chapter 7

Money, Bargaining, and Begging

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

Value  Exchange Rates  Euro  Foreign Currency  Cards and  Checks  Wiring  Black Markets  Baksheesh...Tribute  Spending  Bargaining  Monsterism  Taxis  Begging  Tips

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 were smack in the middle of interesting cities I wanted to see, and cost only 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 slightly 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 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. 

Central PragueI 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 functionary whose main course of study in his youth was "The History of the Party."

I've made six more tours since then, including an interesting month in Mexico for less than $400, and nearly three months in Central America for $1000.

One passing German (who appeared to be making a study) believed the average veteran backpacker traveler worldwide spends about $25 a day. I would agree. In most of the developing world $25 will procure 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 for the same, though most first-timers probably spend two or three times this amount.

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. This is detailed in the next chapter, Pickpockets, Thieves, and Self-Defense.

What are exchange rates?

Spectacular European fountainAs I write a U.S. dollar is worth about six French francs, 1.8 German marks, 102 Japanese yen, 1900 Italian lira, and 9.5 Mexican pesos. One British pound is worth US$1.60, and one euro US$1.01. These rates vary as national economies vary. Because you get six francs for one dollar does not mean France is one-sixth as expensive as the U.S. Since France and the U.S. are both highly-developed economies, prices are roughly similar--what costs six francs in France costs about one dollar in the U.S.

As exchange rates vary, however, things become 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 dollar weakened to a more equitable level.

What is the euro?

With the signing of the 1992 Maastricht Treaty (in Maastricht, The Netherlands), Europe began the process of economic integration through gradual convergence of monetary, budgetary, and regulatory policies. The long run result should be be the emergence of Europe as a second great and peaceful force for worldwide political stability and good.

In 1999 eleven nations led by Germany and France, but including Austria, Belgium, Finland, Ireland, Italy, Luxembourg, The Netherlands, Portugal, and Spain, fixed their national currencies to the newly-created euro to eliminate exchange inefficiencies and ease trade. At first the euro was used only in financial and banking markets (travelers saw them on credit card statements), but on January 1, 2002 euro notes and coins were issued, and national currencies gradually withdrawn. 

Introduced at 1 = US$1.19, the euro soon fell below parity as uncertainty held sway. Over time it will likely strengthen as Great Britain, Denmark, Sweden, and Greece later join, and the huge, highly-educated European market becomes freer and more dynamic.

Front of 100 euro note Euro notes feature windows and bridges to signify openness, cooperation, and communication. Back of 100 euro note


Should I buy foreign currency before I go, or wait until I get there?

Many guidebooks advise buying $50 or $100 of foreign currency for each country you plan to visit before leaving your home country, so you won't be hassled at the airport or train station on arrival. I have never bothered with that, and probably never will. 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 is none whatsoever most of the time.

Sometimes I buy a small amount one country in advance if I will be arriving at an odd hour, but on arrival I usually find I didn't need to, and that I received a rip-off rate at the other end. As long as you have a few mighty greenbacks in your money belt for emergencies, you shouldn't ever have much of a problem exchanging money. Jungle Cambio
Photo: I was greeted with this sign after a three-hour motorized canoe ride to a jungle outpost of perhaps fifty inhabitants. Oh the hardship!


Credit Cards and ATMs

Many travelers now use 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 are not upscale and 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 relatively few and far between, especially when you consider the thousands of possibilities for cashing travelers' checks there.

Check with your financial institution to determine fees, how much you can withdraw per day or week, and system compatibility. Credit cards may assess a ten percent service charge plus interest for cash advances, while bank account withdrawals typically cost $3 or less per transaction. Some international ATMs won't accept personal identification numbers of more than four digits or one that begins with zero, so get an appropriate PIN from your bank, if necessary. Also note that some international keypads have numerals only--no letters. Therefore memorize your PIN by numerals.

Besides convenience, the advantage of plastic is your are 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 with a bad rate. You will usually save $2 or $3.

A past benefit of charging in high inflation/low tech countries was the exchange might not be posted for up to a month after making the transaction. An example is Yugoslavia in 1990 when a 500,000 dinar hotel bill ($50 in July) would cost only $25 when posted in August, due to 100% monthly inflation.

Detail from a 100,000 dinar note Photo: This many dinars buys a house, a beat-up Skoda, or a skinny sandwich?

You should carry at least some travelers' checks in case of loss or mishap. It took one very smart but completely broke young woman ten days and $100 in phone calls to replace her stolen credit card in Guatemala. The magnetic tape on the back of credit and debit cards may also wear out, rendering them unusable in ATM's. Your bank probably has a protective card-holder.

When making a credit card transaction overseas--but especially in developing countries--be extra careful of fraud. Keep the card in sight while the the print is made. One trick is to make several prints on your card, and then have you sign both with a carbon. Be certain the card you get back is your own.

How do I pay my credit card bill while traveling?

Leave money with your Mom! Also beware credit card debt--a slow payback will double your costs, perhaps delaying an ardently desired next journey for years, or worse.

Travelers' Checks

Most countries have a "best" place to exchange travelers' checks. Check your guidebook. In enlightened Norway you receive 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's a good idea to carry the brand most familiar to the clerk or bank--which is usually American Express. Worldwide offices of AMEX are a plus, and may hasten check replacement. CitiBank and Visa traveler's checks are also good. Thomas Cook and Barclays' are popular British brands.

Wiring Money

Many ask about wiring as a means to transfer funds while traveling. Wiring is not often used by backpackers due to complexity and expense, but is something to know in an emergency. Wiring between advanced countries isn't difficult, but 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 to transfer 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 hock. Guatemala Bell policy would not allow 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 would arrive in a few hours, could be charged to a credit card, and would cost a $25 fee plus an unfavorable rate of exchange.

One traveler with long 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 also know, and by then everyone in town knows, and they all need to try to sell you something or at least look you in the eye before bringing out with a huge flourish their oh so important stamps of approval."

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 local customers may try to cheat you, the "rich tourist."

In 1991 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 twenty percent over the official rate, which I considered reasonable and just.

While pressing me to exchange $100 or more, I was willing to risk only $20. He counted the currency 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 renewed the procedure. I fished out $20 and exchanged it for his roll of forints, and then hurriedly walked away to avoid the police who were about to spring. Half a block later I was shocked to discover my pea brain and I had been hooked for $18.

The lesson is if you must make a black market exchange, count your money and hang on to it. Make sure the notes are not counterfeit, or that they are not a less valuable currency from a nearby country.

Bribery, Baksheesh, Mordida, Payola, Dashing, Grease, Tribute, Iran-Contra

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 "transportation tax," each.

While the best policy is never to pay bribes, on principle, there may be times when you are tired, in a hurry, or desperate, and you need dispatch. Even in these cases do not offer money unless you are certain such is being hinted. Not only is the improper offer of a money a crime in every country, but it is a very great insult to anyone who takes pride in his work.

If it appears an official is more-or-less requesting money, never use a word such as "bribe" or "mordida" to describe the transaction. You don't want to be clumsy in this delicate situation--you could end up paying more than necessary, waiting weeks for a visa, or sojourning at the Graybar Hotel.1

Instead, talk quietly and indirectly. "Is there a tax I must pay?" "Perhaps if I pay a smaller fee you could still find a way?" etc.

A few dollars should be enough to get the wheels turning. If 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 wait for as long as it takes.

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 helpful to forget most of my Spanish and lower my intelligence. It's also a good idea to keep your license somewhere other than your wallet, and to have a few small bills stashed in a pocket so you don't have to fish your main money supply.

Over 2400 miles I made two payments, one for $2 and another consisting of $5 and two Negra Modelos (a favorite beer, in the back), and that in the dead of night on a desolate road.

Once in Guatemala I avoided paying a "tax" by asking for a receipt. A few minutes later the official came back saying he had checked again, and that I didn't have to pay after all.

Spending Money

Some budget travelers may become obsessed with always spending as little 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. 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 pay for any museums and cultural events that interest me, in my early travels I overlooked 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 which certainly isn't fresh baguettes.

Enjoying Prague's town squareOn the other hand spending as little as possible can have a positive effect. You may find it enjoyable to sit in a town square for hours, making conversation and observing daily life, as opposed to drinking in a bar. (Which, with discretion, is also cheaper in the town square.) If you're not on a tour or eating a fancy meal, you should have more time to talk to people, play with children, and pet dogs.

Many backpackers spend more 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 alternative you might try a daily or weekly spending limit from the beginning, which only requires forethought, discipline, and light mathematics.

Partially as an experiment I went without spending money or eating for 66 hours in a Greek industrial city, except for water, two scrounged cucumbers, and a few chocolate crackers procured with a found twenty drachma coin. While it was a profoundly interesting experience (mostly characterized by thoughts of food and careful shopping), I don't care to repeat it soon.2

I've got the time, what I need is...

A Few Thousand Dollars

How to Get Money From Your Parents ( ic 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 replying to the pick-up truck driver who is asking $10 for a ten-mile ride--when 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 Danish companion is pleading with you to accept any price.

There is no need to pay $10 for the ride. The driver won't leave good 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 at ten times 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 on the street with beads or jewelry. Aggressive sellers are usually 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 her price to cost or below--which she sadly agrees to because she needs cash to buy food for her family that evening. Sometimes the best bargain is full-market price.

6. Buy stuff from poor people. It feels good!

7. Restrain goofy purchases until the end of your trip, otherwise mail them home immediately.

Economic Monsterism

Too many travelers foolishly and terribly bargain the hell out of the poorest of the poor and the weakest of the weak as described in the Mayan lady paragraph above. Here I'm not describing middle class inn- and shopkeepers, but gentle people in markets who perambulate from surrounding villages, or who spread a blanket roadside, in hopes of a sale.

Yes, you can bargain someone who lives on a few hundred dollars a year, or who is just barely in the money economy at all, to one point above nothing for crafts, shawls, fruits, and labor, or bargain like a great lord atop $100 sneakers and strut away if they don't agree to your demand.

Travelers should see the humanity of the seller, and treat him or her with respect. Perhaps you don't always pay the first price,3 but surely you can determine the approximate market price and be proud to pay that, as opposed to being the walking incarnation of a greedy shoe company to the last half peso.

How to Avoid Taxi Rip-Offs
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-$30 per hour, which kicks in when the cab is stationary or moving less than ten mph. (This compensates the driver for 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 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 those who don't.

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's still not much. In 1993 the drivers of Mexico City's ubiquitous green VW Beetles averaged about $25 per twelve-hour shift, from which came gas, maintenance, and depreciation.4

The key to successful bargaining is to ask the fare before getting in. 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 reply, "No, that's too much," and make an appropriate counter-offer. Note that a $10 fare in developing countries 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 his lowest acceptable rate is likely to be higher.

If at the end of the ride the driver demands a ridiculously large payment, that's extortion. Place a fair amount on the seat next to you and get out.

For meter rate fares, you always only owe for the shortest distance to your destination, unless you specify a longer but timelier or more scenic route. If in doubt, ask the driver to trace the route on a map, which he should have. Never reward a driver for making two circles on a one-circle run, or for otherwise wasting your time. Good taxi drivers immediately indicate the meter will be discounted if a wrong turn is made or an exit is missed.

How to Deal With Begging

The traveler in the developing world is likely to encounter begging nearly every day. Dealing with it is a difficult issue for many, 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 candy, drinks, and gum. It's a shock to return to the same station after several weeks and see the same people walking the aisles, still feverishly hawking their wares.

Once I was in a small shop studying a map when an old man approached and said something so quietly I couldn't quite make it out. I looked up absently, replied, "Buenos dias," and returned to my map. Mustering all his strength, he pointed to his mouth and said, "Tortillas!" I then took a good look and 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 what I thought was a small coin. She looked at it with astonishment and proclaimed for all to hear, "Fir (five) markas!" 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. While they may have thought I was intent on redistributing some of my wealth (one of the Five Pillars of Islam), they more likely thought I was as an idiot who had bumbled into town, and 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 isn't 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 receive 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 an 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 enormous rewards. If their father has to work very hard all day to earn a few dollars, and a backpacker has just given his children nearly as much for doing nothing, 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 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," is my reply.

They may not like this attitude, and they may toss 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 always turns out to be pretty darn nearby). I select one or two as "official" guides, and let them know right away I am only paying a tiny amount. Usually I don't really need the help, but their company is pleasant, and they save the trouble of looking at a map or guidebook. And they're earning the money. Payment in local currency equivalent to a bottle of Coke is generous for a few minutes work.

Travelers' Tips 

In my experience the people who have the most trouble traveling are the ones spending the most 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


Double check that any credit cards you bring have been activated (if they're new) and that you haven't missed a payment recently; otherwise, you may be in trouble just when you need them most (I speak from experience). The same goes for calling cards (which can be a godsend). Also, if you put several hundred dollars credit on your account before leaving you won't incur finance charges while traveling. Jennifer, Tennessee


Beware clip joints. 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, USA


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 change. Anna, California


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., Berlin

Next Table of Contents Reader Comment Top

How to See the World is copyright John Gregory 1995-2009. All rights reserved. Except for personal use like showing to a friend, it may not be reproduced, retransmitted, rewritten, altered, or framed. All product names and trademarks are property of their respective owners. Comment.
Sales. Disclaimer. Thank you.

............ .

. . ....... .                                                    . .. .. .
.......    :)      . . .                                          ..... .. ..  . .
. .   .  . .   . .
.   . . ............... .  . .   .
  . . . ......................................... . . . .  


.  .  


    .   (: ..



......... .

. .  . . . .  .  . .


1. Where every room has a key, but guests don't hold them. back

2. As I arrived at the bank bright and early Monday to exchange a remaining travelers' check at a reasonable rate, the sugar plums were blown right out of my head when I discovered that while the doors were open, a strike in Athens meant no work could be done! At the next bank two-finger typing of my application had begun when work was also halted, and no estimate of resumption could be given! Fortunately my sallow, sunken visage engendered a rare sympathy and I was directed to a private bank where processing was completed in less than an hour. back 

3. They may be too desperate to ask a wild price. back

4. While most taxi drivers of course make their money through work and service, the U.S. Department of State has issued a Public Announcement on Mexico City taxis detailing a serious security threat largely due to epidemic corruption and resulting collapse of justice. back