Taking a trip to a foreign country can be one of life’s most enriching experiences. Enjoying the sights, sounds, smells, and tastes of another land makes one realize how large the world truly is and how different the traditions, customs, and cultures in other places can be. The thrill of encountering new people, places, and things, however, sometimes comes with unexpected frustrations. One factor in international travel that is frequently unplanned for is using another form of currency and knowing how far one’s money will go in another country. Planning is paramount in this regard; taking a little time to prepare before you leave will save you countless time once you have crossed borders, allowing you to relax and enjoy everything the country has to offer. Before you leave for an international trip, you should have a rough budget in mind. Consider the following factors:
While you may certainly make adjustments during your trip, you are far more likely to adhere to your budget if you have a rough figure in mind first.
There are close to 200 different currencies currently in use and circulation in the world today. Each and every one of them has a different value or worth relative to another, a ratio that fluctuates on a daily basis. This ratio of one currency’s worth to another is called the exchange rate. Exchange rates are determined by many different factors, the most significant of which is the global market in currency exchanges. Because the values of currencies are not fixed, it’s advisable that you do some research before you leave for your trip and learn what the most current exchange rate is. Once you know what the exchange rate is, you can do a little math to see how much your money is worth in another currency. There are many free tools and resources including currency conversion calculators that you can find online or download as applications to mobile devices. In most cases, these tools simply automate the mathematics of exchange rates (as any calculator would do), but they also allow you to select through drop down menus which currency you are in possession of and which currency you would like to convert it to. If you are taking a trip to several different countries (say, while backpacking across Europe) this option will prove very useful if you have to convert your currency several times during the trip.
Years ago, the golden rule for using money while overseas was to avoid cash and carry international traveler’s checks. These prepaid checks were acquired at your local bank or money broker, signed ahead of time, and then brought overseas. Each of them was in a specific denomination. Since they had to be re-signed by the person whose name appeared on the check (verified by photo identification and signature), even if you lost them no one else could use them, deterring theft. The major drawback to these checks was that you had to purchase them ahead of time; while they were useless to thieves, you could still easily lose them. Knowing that no one else could cash them was of little consolation when you were still out a great deal of money. Another disadvantage was the fees charged to you by the banks selling them to you and often the foreign merchants cashing them. Finally, traveler’s checks were often bought in large denominations so you wouldn’t have to carry around hundreds of checks. But that made it difficult to use them except for large purchases; it was a pain to buy a croissant at local Parisian bakery and ask them to cash and break a $100 traveler’s check.
Thankfully, since the advent of global telecommunications, banks and ATM’s are all interconnected now. You can often use American debit and/or credit cards in foreign countries. At the very least, you can use your credit card or debit card at foreign ATM’s (which all have menus in English) to withdraw as little or as much local currency as you wish. The ATM’s will automatically calculate the conversation rate and charge you the appropriate amount in your native currency. The only disadvantage to this method is that many banks and credit card companies charge extra fees for international usage and withdrawals, in addition to the normal fees associated with ATM usage. Always check with your bank and/or credit card company to verify the fees or rates for international withdrawals. In some cases, you may be able to negotiate a lower fee, or even change your bank or credit card to one that offers a more competitive rate. If you worry about overspending, you can purchase a prepaid debit card, which has a fixed amount of money on it; once the funds on it are exhausted, you can no longer use it.
If you don’t like all the fees associated with using plastic and insist on carrying cash, be sure to carry a wide range of denominations and break it up into several different stashes. Leave the largest stash in a locked safe at your hotel. Have a smaller stash somewhere in the hotel room. Secure an even smaller stash into a money belt or wallet (just enough for one day) and carry some loose bills and coins in your pocket so you don’t have to pull out the money belt or wallet in public for small purchases. At the end of each day, transfer money from one stash to another. This method will ensure that even if you are unfortunately pickpocketed or mugged, you will not lose all your money.
General Travel Advice
Currency Exchange Rates
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