Whether you travel a lot or a little overseas, managing foreign currency and money on the road remains an issue. I figured with all of my experience in this area that I’d share my tips on how I manage money on the road.
- Round Down. This is key. If the exchange rate is 68, the typical inclination is to round up, as we learned in school. No. Don’t do this. It is always better to round down, pretending that the rate isn’t as good as it really is. This will make a difference in two ways. First, you won’t make the mistake of paying ten or twenty percent more than you thought you were. Secondly, if you make it look more expensive then you might convince yourself not to buy something you probably don’t need anyway!
- Pay Attention to the Denominations. Make sure that you count out your money carefully (as old money tends to stick together) and pay attention to the numbers on the currency. Many countries have several notes that are close to the same color, particularly in poor lighting. You could end up paying a hefty foreign dummy tax for a simple mistake.
- Counterfeits. Depending on where you are traveling, these might be common. I believe I still have a half of Peruvian Soles note that my friend and I split the difference on and each sucked up the twenty buck loss to travel tales. (Yes, it did look real, with hallo gram and all!)
- Travelers Cheques. These are old school. Even if you do need to have a great deal of money on you, chances are that Travelers Cheques won’t help you when you need them. Many places just don’t take these anymore, so you might find yourself with a wade of cheques and no way to access money when you need it. I used these on my first travels to Finland and then again only when I had to take loads of cash for six months on work in Australia. In the former case I basically got screwed with every transaction. With the later I had to go into the bank every so often and change when it was time to dole out money. It worked in this instance, but that wouldn’t be the case for my work travel these days.
- Keep Money in at least Two Locations. This is very helpful in cases of loss and theft. It’s also good to do the same with a copy of your passport as well. This won’t always save the day, but it’s always good to have a bit stashed if you can’t make it to a functioning ATM.
- ATM. Speaking of ATMs, this is basically the method that I use these days, aside from loads of cash. Tips on use of ATMs abroad is to take out the largest amount allowable at each go, this will save on fees. Also keep in mind that in some places, as when I was recently in Pakistan, only some banks will take foreign ATM cards. Also, make sure there is an ATM where you are headed. In many places around the globe there may only be a couple of functioning ATMs in the capital city, and none elsewhere. Always good to have cash when you need to get out of a pickle.
- Foreign Transaction Fees. Also keep in mind that your bank will likely charge between 1 and 3 % for foreign transactions. As a rule, I only use my cards for larger expenses, and use cash for anything smaller.
- Back-up Plan. To go along with carrying money in two places and carrying cash, also carry two cards if you can. Cards are tricky overseas and it isn’t too odd to have one of your cards suddenly freeze up without explanation. Always good to have a back up.
- Let Your Bank Know You are Traveling. To help with possible freezing, make sure to call your bank and let them know where you are going. I know you’ll have a lot on your to do list before you head out, but this one will be worth the time.
- Big Wallet or Purse. Also keep in mind that in many places in the world, currency adds up. It might not be worth much, but it sure does take up a lot of space. When my mom came to visit me in Ghana so was amazed that we could fill a couple of big travel wallets with only a few hundred dollars. Make sure that you are prepared to carry large chunks of bills securely.
- Ask for Prices. You may be heading into a country and wondering what the real price is. It might be tempting to play it cool and pretend like you know it all. My tip: Just ask! This will save you money and stress. If I don’t know already, I’ll ask someone on the plane what to expect for the average price of a taxi into town. Then I know how much money to change. Once I’m there I ask for a couple of basic prices so I can base things on that, i.e. a taxi ride or fruit.
- Where to Change Money? The two worst places to change money: airports and hotels. There is rarely an exception to this. I change as little as possible to get me by at the airport, twenty or fifty often. Or I do the same at the hotel just to get out with some money. Then I find a real exchange place that won’t add a hefty tax to everything I buy.
- Negotiate. Keep in mind that this isn’t Kansas. Don’t be afraid to negotiate. They’ll respect you more and have more fun with the sale.
- Don’t Spend It Just Because It’s in Your Pocket! It’s ever so tempting to just spend down your foreign currency to nothing, just because it is in your pocket. Remember, it’s still money. Unless it is only a couple of bucks in your pocket, you’ll always be better off changing it back and not just spending it on stuff you don’t need.
- Airport Tax. Also keep in mind that there might be an airport tax. Most airports will only take this in local currency. Many of them are switching to include this in the price of the ticket, but there are still places that still do this.
Readers: Please share your tips if I’ve missed a good tidbit!
Safe travels!
Miel
