Money & Career
Going abroad? Here's how to manage your money
Illustrations: iStockphoto
Money & Career
Going abroad? Here's how to manage your money
Two finance experts share tips on what to do with your money on a big trip.
Scott Hannah and Stacy Yanchuk Oleksy weigh in on the cash-flow questions that weigh on you when you travel.
Q: How do you best budget for a big trip?
Nothing erases the elation of an epic holiday more than coming home to even more epic bills. Sure, vacations are a time to splurge, but have a spending plan. Start with a SMART goal. An acronym for “specific, measurable, achievable, relevant and time-bound,” SMART is simple. Fill in the blanks: I want to go to (insert location) in (insert time frame); the cost of my vacation will be (insert dollar amount) and I'll need to put aside (insert dollar amount) (insert how often) in order to achieve this. If the numbers don't add up, opt for a trip that's less expensive or extend the time frame. And remember to factor in oft-forgotten costs, such as an international phone plan, travel insurance, a house sitter, pet care, transportation to and from the airport, parking and luggage fees.
Q: Do people still carry traveller's cheques? When are they good to use?
Most people don't use or recommend traveller's cheques anymore, and depending on where you're going, you may not be able to cash them. More convenient options include a credit card (even better if you use one that doesn't charge foreign transaction fees), a prepaid credit card in the currency of the country in which you're travelling or a debit card for withdrawing cash in the local currency (be aware that fees may apply).
Q: What are the safest practices for travelling with credit cards?
Let your credit card company know you're travelling so your card isn't flagged as potentially stolen. Ensure that there's enough room on the card to make purchases as well as have a cushion for incidentals. Keep a record of your card number and the company's phone number separate from your wallet or purse. It's best to travel with two cards from different payment systems, such as Visa and MasterCard, in case there are network problems with one of them. Consider leaving a third card in the hotel safe for backup just in case your primary cards are lost or stolen.
Q: Is it OK to use my debit card?
Research in advance the country's acceptable payment methods or consider calling your hotel for advice. Is debit widely accepted in the country to which you're travelling? Are there Canadian banks with branches there? If the answer is yes to both, you can easily use your debit card to withdraw cash, but don't use it for purchases, since you'll be charged foreign transaction fees; and, if your debit card is compromised or someone gains access to your PIN, you could be held responsible for the loss.
Q: What's your advice for stashing cash?
Don't store all of your funds in one place; keep some in your wallet or purse, some in a money belt that fits snugly against your body (over or under your clothing) and maybe some in the hotel safe. One place that isn't prudent to hide cash is in your luggage, which isn't always protected or in your sight and can easily be whisked away.
Q: Is it ideal to arrive at my destination with preconverted cash?
If you're converting currency before you leave, compare the exchange rates with your financial institution and the exchange service—and know that ones at airports often charge a premium. Be cautious about travelling with too much cash, as it cannot be replaced if stolen.
Q: Do you have helpful tips for handling foreign bills on the go?
Whether you're splurging on the chef's special or bargaining at a market, you'll want to know how much dough you're spending in hometown terms. So you're not struggling with conversion calculations while you're out and about (after all, you're on vacation, not in math class), download a money-exchange app, like XE Currency or Currency Convert. If you don't wish to use your data or pull out a calculator, write down the main denominations and what they convert to in Canadian dollars for reference.
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