How to Manage and Maximise Your Money When Traveling

How to Mange Your Money When You Travel

Life’s complicated, but not as complicated as working out the best way to manage your money while you’re traveling.

When we moved from New Zealand to Panama, then ended up living in Costa Rica and finally Australia, there was a lot of money changing going on. We’re talking four different currencies right there. But we also traveled round Nicaragua and Guatemala, so as well as dealing with New Zealand dollars, US dollars, Costa Rican colones and Australian dollars we also spent quetzals in Guatemala and córdobas in Nicaragua.

I told you it was complicated.

Fortunately the Mucho Man is a bit of a whizz when it comes to all things financial and he worked out the best way for us to manage our money while traveling.

You’ll need to take charge of your money too when you travel to make sure you’ve got enough money available for your trip, have more funds accessible if you need them in an emergency and can easily get in touch with your bank if you have any financial problems.

Once you’ve got that covered then you want to make sure you don’t  lose money through fluctuating exchange rates, high bank fees or exchange rate commissions.

Here are my tips for managing your money wisely when you travel.

Managing your money so it’s easy to access

This is crucial when you travel. Plans change, prices go up and communications can be hard while you’re traveling so you need to make sure you can access your money any time and from any place.

1. Take a direct debit card

Make sure you can use the ATM at your travel destination. They’re usually the cheapest and easiest way to withdraw cash.

Take a card you’ve used before, check it won’t expire before you leave and make sure you know the PIN numerals, not just a word as the ATMs overseas may not have letters on the keyboard as well as numbers.

2. Make sure you can transfer money online

Online transfers are usually the cheapest way to transfer money from one country to another so make sure your bank can deal with this. Get your password and user name before you leave and test it to make sure it works.

Commit your user name and password to memory or keep them in a very safe place, not in your email account which can easily be hacked. Lastpass is great for remembering passwords securely.

Take Internet security very seriously. If you’re using public computers, for example in Internet cafes or a library, be aware that they may have keyboard logging software which can capture your passwords. Take precautions by using only your own computer or a portable web browser on a USB stick and a virtual keyboard which appears on the screen and is operated by your mouse.

3. Make sure you can also transfer money by phone

If you need to transfer a large sum of money or have problems with your online banking you’ll probably need phone banking set up too. Hopefully you won’t need to use it but, if you do, make sure you know what the phone number is along with answers to the answers to the typical security questions.

4. Choose financial institutions with a proven track record

It’s your responsibility to keep your money safe and make sure it’s in trusted hands. Choose established companies with a proven track record for security and trust. When choosing a bank pick a global institute with branches worldwide.

5. Take at least one credit card

Credit cards are a great back up when traveling in case things go wrong. Keep them in a separate wallet or bag so you have a back up at all times if your cash or debit cards get stolen.

6. Consider getting travelers cheques

If you’re traveling to remote areas credit cards might not be widely accepted in which case travelers cheques are the best back up plan. Make sure they’re in a currency that’s widely accepted where you’re going. Travelers cheques in US$ are usually a safe bet.

Travelers cheques are expensive so get them only for use in emergencies.

Managing your money so none is wasted

The best way to maximise your travel money is to make sure none of it is wasted on unnecessary fees or lost through high currency exchange commissions.

6. Never change large sums of money at a high street bank

High street banks offer a poor exchange rate so if you must change money there do so only for small amounts.

7. Never change money at the airport

You’ll get the worst rate of exchange and a big hit on commission at the airport. If you need cash as soon as you arrive somewhere use a dedicated currency exchange company like HiFX to beat high street bank exchange rates and avoid exorbitant commission fees. If you’re in the UK they will even deliver the currency to your door free of charge for orders over £500.

8. Change your money in two separate transactions

If you’re changing large sums of money into another currency do it in two or more separate transfers over a period of time. You can never be sure if the currency exchange rate will move in your favour or not but the best thing to do is hedge your bets by making more than one transfer.

9. Split your money between currencies

If you’re going to more than one country or you’re not sure where you’ll end up it’s wise to split your funds between two or more currencies. That way, even if one goes down, hopefully the other will go up to balance out your potential losses.

Some banks will allow you to open multiple accounts in different currencies so you don’t have to deal with several different banks to organise this.

10. Check the bank fees

Banking fees can eat up a large chunk of your money, especially when you’re moving money between countries and currencies. Choose a bank or money exchange service which is transparent about its fees and charges fixed sums rather than percentages.

Look out for specialised currency exchange services that will transfer and exchange money free of charge for larger sums.

Managing your money while you’re overseas might seem complicated to begin with but it’s worth spending time working out the best options. That way you can enjoy your travels knowing you’ll be able to access your money whenever you need it and have more to spend on those precious travel experiences.

This blog post is sponsored by foreign exchange and international money transfer experts HiFX who are on a mission to help people save money and minimise the impact of fluctuating exchange rates.

How do you manage your money while you’re traveling?

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  1. Tanzil August 13, 2012 at 3:42 pm - Reply

    Woah. The first part sure is complicated. And you guys have been to a lot of places! Thanks for sharing what you know ;-)

    • Annabel Candy August 13, 2012 at 3:56 pm - Reply

      Hi Tanzil,

      It was complicated – took us a while to work it out but when you travel a lot and deal with multiple currencies there are huge savings to be made if you do it right.

  2. Jenny Binnie August 14, 2012 at 10:30 am - Reply

    I’m glad I encountered your blog post. I love to travel but I don’t travel often because I’m not really good in handling my money. I always end up spending more than expected. These tips are helpful not only for first time travellers but for everyone with budget-handling problems.

    • Annabel Candy August 14, 2012 at 11:00 am - Reply

      Hi Jenny,

      Great to see you here and thanks for the lovely feedback:)

  3. Rachel Jua August 14, 2012 at 12:28 pm - Reply

    The best part of using traveler’s checks is that when you lost it or was stolen, it will be replaced for free, and often quickly. The bad part though is that, not all vendors are accepting traveler’s checks, so.. it’s still best to always be ready with your cash or credit card.

    • Annabel Candy August 14, 2012 at 12:44 pm - Reply

      Hi Rachel,

      Yes, it’s good to have a few different options so you don’t get stuck:)

  4. Davey August 15, 2012 at 9:26 pm - Reply

    Just realized that most of these tips I already kind of follow. One thing I like doing apart from Traveler’s checks and bring a credit card, I usually send myself some emergency money via a remittance service like Western Union. This way if I get into a jam, I have some extra money hidden away that can be easily accessed.

  5. Pamela August 19, 2012 at 7:16 pm - Reply

    Dear Annabel
    Thank you for the helpful suggestions. As Australians we generally use an Australian bank holiday travel card where your bank will organise cards for you in a range of currencies depending on where you’re going, eg to Euro countries you transfer funds into a Euro card (you could also have a US dollar card or English pounds card). You also get a back-up card so if you lose the original you can still access your money. They have chips which are much better accepted these days in Europe than cards without. We always take out several different travel cards for extra security (it costs a bit more of course) so if a particular card is compromised you still have other separate funds. Of course we also take credit cards and several hundreds of dollars worth of cash in the countries we’ll be visiting. Mostly stashed in our money belts. We used to take out travellers’ cheques and really liked them but sadly most places no longer accept them. AS we always go to France and spend quite a bit of time there, well before we left on our last holiday we opened a French account with a multinational bank which has many branches in Paris/France. We nominated a home branch as the one closest to the apartment we always rent in Paris. It worked out really well. When we needed Euros we would just walk down the road to our local branch and withdraw the money directly from our account. We were appointed a customer relations person who looked after us. He was a lovely man who was a great fan of Australia and couldn’t do enough. We’re also lucky to have a son who is a chartered accountant and financial adviser and can contact him as a back-up in case we need emergency money. We never change money at airports or railway stations. It’s also important to chose ATMs carefully. We try always to find one inside an alcove of a well-known large bank where you can make large withdrawals in one go rather than having to make several smaller withdrawals to get the amount you want – as this costs more in bank charges. We’re very careful in such situations and one of us always keeps an eye out for any people close by. We try to avoid taking money if people are nearby and as soon as possible get most of the money into our money belts which are under our clothes and completely invisible. I designed them and they’re very safe to use. As they’re made of linen-cotton with zip up pockets on each side of the stomach they’re not bulky, are soft on the skin and can be washed easily. They have both two double sets of buttons and a wrap around tie to secure and are worn low on the hips. Best wishes.

    • Annabel Candy August 20, 2012 at 8:10 am - Reply

      Hi Pamela,

      Thank you for taking time to share your tips. That’s a good one about withdrawing large sums of money from the ATM to reduce bank fees and your money belts sound excellent. It’s much easier to relax and enjoy your travels when you know your money is safe.

  6. megan August 21, 2012 at 7:30 am - Reply

    Really great tips for managing your money while on trips.

  7. Ivy @ Pathway to Asia August 21, 2012 at 3:01 pm - Reply

    I realized that most people are already aware of these tips but sadly, they just can’t really seem to follow them. There are people who are snowdrifts who thrive on luxury purchases when traveling and always spend more than expected which isn’t really good!

    Maybe you can add “Discipline yourself” at #11? :-)

    Thanks for the sharing these tips! Remind us to be how to be more wise & practical.

    • Ivy @ Pathway to Asia August 23, 2012 at 6:08 pm - Reply

      I mean *spendthrifts.
      Sorry for the typo. Auto correct. :)

  8. No name supplied August 24, 2012 at 2:47 am - Reply

    These days you won’t find travellers cheques being accepted by retailers in Europe. A few hotels may still accept them, but otherwise you’ll find you need to go to a bank to cash them. The exchange rates for travellers cheques also aren’t that favourable.

    These days I use a prepaid card than I preload with Sterling, Euros or US dollars. It’s accepted wherever I see the Visa or Mastercard logo and use to to withdraw cash at my holiday destination. The purchasing exchange rate is fixed at the time I purchase the currency, so when a currency is particularly weak I take a moment to top it up ready for my next trip. They’re great because they’re really quick & easy to topup online.

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