So you’ve taken the plunge, saved your money, paid off your debt, and you’re ready to go traveling. Along with vaccinations, organizing flights, and figuring out what to pack, you also have to figure out how you’ll manage your money while away.
Gone are the days of travelers checks or traveling with large amounts of cash. In my opinion the best idea is to take at least two bank cards, and to have multiple accounts to transfer between. It’s easy to open a bank account online or over the phone, or head down to your local bank and get them to help you out. I’ve personally set up an extra bank account which is connected to my everyday account. I plan to keep the majority of my money in this account, only transferring what I need over to the account that’s actually connected to my debit card in case it gets lost or stolen.
When I first set up my second account I had a lock on it, so that after I deposited money into it I wouldn’t be able to withdraw it without ringing and asking the bank to do it. While this sounds like a good idea in theory, all that really happened was I never really deposited any money into the account and it sat at $20 for six months. A second account can be a great way to save though, as long a you remember to deposit money religiously and then try not to touch it at all. You’ll be surprised how much is sitting in the account after a few months.
Having a second account is definitely helpful with budgeting while overseas. In a week I’ll be heading to Asia and I’d like to stick to a budget of approximately $50-$60 per day. Every week I’ll transfer $380 from my online account to my everyday account, which will help me to stick to a budget. By only transferring this amount I’ll be able to better monitor my spending, and if my card gets stolen I won’t lose all of my savings.
Last time I went overseas I used a travel card that I could load with different currencies. I had a few problems using it at some retailers though, and it was tricky to remember how much I had of each currency in each “wallet”. There are also often fees to withdraw the money if you have any left when you’re back in your home currency, and if you’re visiting more than five or six countries you’ll still need to change money anyway.
Transferring money abroad between bank accounts and currencies through banks can be quite expensive. The wire fees are exorbitant and the exchange rates you are being offered on small transfers are usually quite poor. There are companies that specialise at the expatriate audience. Here is a comparison of banks and these services.
Whatever you do, make sure you avoid changing money at the airport. The exchange rates are terrible, and you’ll be better off using an ATM and withdrawing cash in the local currency. If you must use a local Currency Exchange, make sure they have a sign saying they’re authorized, especially in places like Kuta in Bali, where the guys have fast hands and love ripping off unsuspecting backpackers.