With so much to plan and organize and pack before a vacation, it’s no wonder most people don’t think about planning their finances before their trips! But surprises and accidents are the quickest way to ruin a relaxing vacation, and when it involves your money and travel, a little problem can turn into a big problem very quickly. Here’s a few ways to keep your sanity and your money safe while traveling:
- Don’t just plan your trip, plan your bills: When you’re budgeting your finances for the trip, make sure you incorporate enough money to pay bills, rent, and any other expenses that might be happening at home without you while you’re on vacation. Making a checklist of bills with due dates before you leave ensures that everything is paid before you go, and that you don’t come home to an overdue payment! If you have the ability to sign up for automatic billing, you can set your payments up to happen with or without you.
- Set a budget before you go. Things may always change when you arrive, but having a set amount of money for spending on souvenirs, daily food allowance, and even the maximum amount of money you’re willing to spend on late-night taxis determined before you leave will help you stay on track when you arrive.
- Take a credit card. Banks, ATMs, and currency exchange will all work for you while you travel, but credit cards will always give you the most favorable exchange rate and you’ll avoid fees. Many countries are still mostly cash-only economies, so you may not get to use it much, but any time you can use a credit card while traveling, do it. You’ll save money. (But don’t use it for cash advances, as that will lead to hefty interest rates later on, and you’ll end up losing money in the long run, rather than saving it. Use banks for cash!)
- Don’t change your money at the airport! It’s the most convenient time to make the exchange, but it’s also the heftiest fees you can pay. Avoid currency exchanges and money changers. You might, however, want to change just enough cash to get you to your first stop from the airport in a cab, bus or train. Just in case!
- Know the exchange rate before you go. This keeps you from being ripped off with currency exchanges, and helps get you in the mindset of the currency before you use it, which helps you keep to your budget. You don’t want to accidentally spend your whole budget on one nice dinner because you didn’t know the exchange rate!
- Notify your bank and credit card company. Banks are getting better and better at spotting theft and keeping your account safe, but that downside of that is that you run the risk of you account being flagged and frozen if you don’t warn your banks and credit card companies in advance. Many banks and credit card companies can do this via app or website, but a simple call before you take off will do the trick too! While you’ve got them on the phone, it’s also a good idea to make sure you know your PIN number for your bank cards, your credit cards, and that your PIN doesn’t start with a zero (some countries won’t allow a PIN that starts with a 0).
- Don’t carry more cash than you need, but minimize your ATM use. Depending on your bank, and the countries you travel in, ATM fees can be steep, and add up quickly. You can be charged for ATM withdrawal both by your bank AND the bank that owns the ATM. While the factors are variable with bank fees, ATM fees, and exchange rate, you can lose anywhere from $2 to $10 per ATM transaction, maybe even more! You’ll use cash often, it’s accepted everywhere, and it can keep you to a budget, but there’s no way to get cash back if it gets lost or stolen.
- Make copies of your important documents. Make two sets of copies of your important information, like passport/ID, credit cards, flight confirmation numbers, prescription medications, and any other important documents you might need. Give one set of copies to a family member or friend at home, and keep one set with you, separate from your money, identification, or cards. If you don’t want to carry extra paper with you, take a picture with your phone and store the photos somewhere you can access online internationally.
- Keep your receipts. Some countries let tourists either A) Get a refund on taxes paid on purchases in the country before you leave, or B) Let you pay for the item without having to pay taxes on it at the time of purchase. In either case, keep your receipts for everything! You’ll need proof of tax exemptions as you leave the country. Also, this helps you keep on budget!
- Use multiple accounts to avoid theft. Fraud and theft are everywhere, and there are tons of horror stories of travellers all over the world losing money to criminal activity, and being unable to spend money while on vacation. One way to avoid losing everything is to cordon off your assets with multiple accounts. This ensures that your finances can’t be wiped out in one fell swoop.
- Open up a separate Travel Checking Account. Keep enough funds to cover a few days of meals and lodging, but no more. Set a maximum limit for yourself with the mindset of “money you could lose if someone were pointing a gun at you”. Depending on your finances and travel style, this could be anywhere from $150 to $1,000. Keep this card in your wallet, and use it at ATMs, to pay for cabs, et cetera. If you are mugged, or your account details are stolen and fraudulently used, you have just limited the amount of money that a thief could take, and you won’t be wiped out while you’re contacting your bank to refund the money and declare the fraud.
- Personal Checking is your day-to-day account, for bills and other personal reasons. This should be separate from your travel account, and you should keep this ATM card locked in the safe at your hostel or hotel room. If you are backpacking, hide this card far away from any valuables. (I.E. wrapped up with a feminine sanitary pad, tucking into your soap caddy, or hidden under the insert of your spare pair of shoes.) You should never spend from here while traveling, but keep it on you in case of emergencies.
- If you put your travel money into a Savings Account throughout the year, your money will earn interest. With no debit cards or checks to steal, a savings account is the safest way to store your money. Link this account to the other two accounts, and you’ll be able to transfer money anytime you need to replenish your balance. Having a savings account linked to two other accounts also means you won’t have to worry about time lost waiting for a replacement ATM card, you can transfer funds to either of the two accounts and still be spending your travel money.
- Carry a “dummy” wallet. In particularly dangerous areas, or those notorious for pick-pocketing, you may want to fill a wallet with a few small bills of local currency, expired ID cards or fake IDs, those fake credit cards that come in solicitations in the mail, and anything else that makes it look legit. Keep your real wallet someplace more secure, and carry the dummy wallet in your pocket. If you get held up or pickpocketed, your money and ID are safe!
- If you travel often, make it work for you! Look into banks that have the lowest ATM fees and most international ATMs/branches. Sign up for credit cards that give you bonuses on travel, airline points, or free hotel nights! If you’re going to be traveling anyway, you might find businesses that can help you get there. Depending on your country, some types of credit card may not be accepted, so make sure before you get a card, that your card is going to work in the places you would like to travel!
Victor Notaro is an accomplished Corporate Banking Executive with a demonstrated record of success leading consultative and relationship management strategies in the financial services industry. Victor Notaro is skilled at building and managing high performing teams of professionals in commercial and corporate banking, fostering relationships with middle market and multi-billion dollar companies. Victor Notaro’s record reveals exceptional performance in the development of business capital strategy, with expertise spanning start-up of business units, leading YOY revenue growth, and producing sales in the millions of dollars. Victor Notaro is the Senior Vice President, Corporate Banking / MidCorporate Banking at Citizens Financial Group.