As a frequent traveller I have a lot of experience on how to look after your finances whilst abroad.
In the year 2000 I went on secondment to work and live in Saudi Arabia. This was initially for five months but turned out to be for 17 months in total.
Nowadays I am an international business traveller from my UK base and trips vary from 3 days to up to 3 months on the odd occasion.
When it comes to managing finances you need enough money to get by whilst abroad and pay all your bills from home on time.
Money For Travel
Whilst travelling you need some money to cope. I’m lucky in that work provide me with cash advances in the currency of the country / countries I’m visiting.
If you are not that fortunate then you need to shop around for the best exchange rates in your home country before you leave. In the UK you could use one of various comparison websites to find the best exchange rates currently available.
Check before hand which currency you need for your locations. In some places around the world, such as India or the Middle East you might find that the US dollar is an accepted currency so consider carrying these.
Where possible try to buy your currency in advance of travel. If you buy your currency at a bureau de change in the airport then you’ll get a shocking exchange rate. You can also benefit by some currency sellers on the high street who may offer to change your left over money for free once you get back from your trip.
If your cash is stolen you really are in trouble as you’re unlikely to ever recover it. Thankfully if you have travellers cheques you are more likely to get your money back.
This happened to me when I was inter-railing around Europe for a month. Whilst on an overnight train my travellers cheques were stolen whilst I was sleeping (I still swear it was the ticket inspector). Thankfully I had the slips with travellers cheques numbers stored separately. On arriving at Prague train station I reported the theft to the police then lodged the details with a bureau de change who issued replacement travellers cheques. Ultimately I suffered no financial loss but it was an inconvenience.
There are typically three types of plastic you can use whilst travelling to access cash or pay for things.
Prepaid cards are the new kid on the block and are growing in publicity and popularity. With these cards you pre-load the card with money which is converted to the local currency at a rate you see in advance. You can then use ATMs as and when whilst abroad.
Debit cards are basically your bank card which you use at home. It is linked to your main bank account so you don’t have to worry about pre-loading your card. Just make sure there is money in your account.
With both of these you can face ATM fees typically from the bank which operates the ATM. If it is your debit card then you are unlikely to know which exchange rate you’ll get (as it will be a daily rate) and likely to face transaction charges from your own bank too.
Credit cards are generally a last resort to access cash due to the cash advance fees which means you pay interest from the moment you access the cash until you clear your credit card balance in full.
Credit cards are useful though (like at home) as you can pay for many things with them. I’m quite particular as to which credit card to use for my personal expenses as the cards can vary significantly. From fees to exchange rates there are big differences so you need to look for the most competitive exchange rate card from your issuing country.
Tip: When paying for something try not to let the shop/hotel you are buying from to automatically charge you in your home currency. The exchange rate is usually very poor and you can often get a better exchange rate from your card provider.
If you are going to be in one country for a long time you might even want to consider seeing if your bank will provide a bank account in the currency local to your destination. The international big banks could potentially offer this. You’ll need to assess the cost benefit of this though based on the value of money you are talking about and how long you’ll be at your destination.
How do you look after your finances whilst abroad? In particular spending money? Share your experiences in the comments box below.
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