Let’s talk money: tips for handling finances when traveling abroad

Managing money when traveling abroad: baffled woman using a currency appHow to exchange currency, keep your money safe and use apps to track expenses

by Jennifer Mitchell

You’ve booked your trip abroad, created the perfect itinerary of experiences, and now you need to ensure you can seamlessly pay for all of the fun activities you have planned as well as transport and other necessities. You want to ensure cash flow isn’t an issue throughout the trip and you don’t want to overpay when it comes to exchange fees. You also want to know how to keep your money safe if you’re traveling to a destination where pickpockets and haggling are common.

Understanding foreign currency can be a challenge, but the key is pre-trip research and planning. After traveling to many corners of the globe, we’ve picked up a few tricks on how to handle money when abroad and steps to take before leaving home that will make exchanging your money and paying for your trip stress-free.


What to know before you go

In the U.S., credit cards and money transferring apps reign supreme. But in many places in the world, cash and coins are the currency of choice and bartering is commonplace. Spend some time researching your destination before your trip to understand how locals handle money and where to exchange your U.S. dollars. Here’s where to start.

Identify how much you’ll need:

Do some research on your specific destination to determine how relatively pricey or inexpensive your purchases and incidentals will be and how prevalent cash vs. credit card usage is at your destination. Looking at a travel guidebook, relevant blogs and local restaurant menus online will help. 

Diversify your funds:

No matter where you’re traveling, it’s a good idea to diversify your money and store it in several different places. At a minimum, you should carry some cash, a credit card and an ATM card. American Express is not accepted as broadly outside of the U.S., so it is best to have a Visa or Mastercard too if Amex is your usual card of choice. You may also want to consider bringing a prepaid debit card loaded with the local currency. If you’re someone who travels abroad frequently, you may want to open a travel-specific bank account and debit card or credit card that has no foreign transaction fees.

Tips for tipping:

Tipping is expected in the United States, but that isn’t the case in many other places. In some countries, a standard service fee is included and nothing additional is expected, and in others, tipping occurs, but in fewer situations and at lesser amounts than in the U.S. For an international traveler, observing local tipping etiquette is not just an issue of fiscal responsibility; it’s important to respect local culture. In some countries, tipping can even be considered rude. Check a few resources online and in travel guidebooks so you can be fairly confident that you’re observing local norms and have the amounts you need handy at the right time.

In Europe and elsewhere outside the U.S., credit card payments are often processed tableside on handheld devices and do not involve printing and signing a check that has a blank line to write in a tip; you’ll need cash or request the server add the tip before running the bill (which can be awkward especially if there is a language barrier, so really, just have the cash).

Learn how to barter and maybe even bribe:

If bartering is common for tourists, be sure to know how to haggle. Or if you’re traveling to a country where bribes might be necessary, be sure you know how to handle the situation. For instance, when you open your wallet, you need to be prepared to hand over everything, which is why you should keep a pouch with a few smaller bills accessible and separate from your wallet.

Don’t forget the basics:

Call your bank and credit card company to let them know you’ll be traveling, confirm your daily withdrawal limits and ask about extra fees for withdrawals made while abroad—most banks charge something, so best to know what you’re in for. Be sure to write down your credit card numbers or, better yet, store them in a security app—if you don’t have them memorized—and the toll-free number to call in case of an emergency and store that information far from your credit card and wallet.


Knowing where to exchange your change

Regardless of where you’re traveling, an ATM will almost always give you the best exchange rates. Bring your debit card and take out money at an ATM when you arrive at your destination; and if possible, use an ATM tied to a specific bank for an added layer of security. Your bank at home will likely have the worst exchange rates, followed by money exchangers at airports. If you’re concerned about getting from the airport to your hotel and you’re not sure if a cash withdrawal from a bank ATM at your arrival airport will be possible, convert a small amount of cash at home to make sure you arrive safely. From there, you can take out more cash at a local ATM.

Not only will you get the best rates at an ATM, but it should be easy to take out smaller amounts throughout your trip and return as you need more funds; the tradeoff is that you will most likely be charged foreign withdrawal fees each time. It typically costs more to convert your money back into dollars, so you don’t want to take out more than you need. If you have extra local cash at the end of your trip, try to spend what you can at the airport on snacks, water and magazines, so you don’t lose as much by converting it back to U.S. dollars.

You may find that some stores or restaurants give you the option to pay with your home currency. Though that may seem like a tempting offer, it’s almost always associated with an extra charge of about 5-20 percent. To avoid horrible exchange rates, pay with the local currency.


Keeping your scratch safe

It’s a good idea to split your money and hide it in several locations like a locked suitcase, your hotel safe and multiple places on your body. If possible, carry larger bills in a secure pouch and smaller bills in a more accessible place. If you’re traveling with your significant other, split your cards and cash between the two of you.

Though not the most fashionable, a money belt comes in handy when traveling to a location where pickpockets are common. If a money belt makes you cringe, consider a travel infinity scarf with a secret zippered pocket or a jacket with inside compartments. Cross body bags are more secure than over-the-shoulder handbags or a backpack slung over one shoulder. Fanny packs (or bum bags to you Brits) can actually be quite stylish if you choose the right one.

You may also want to take a second look at your beloved travel bag. Maybe it has accompanied you on dozens of life-changing trips, but a sturdier travel bag with anti-theft properties might be a safer option. Look for bags with cut-proof shoulder straps and fabric and a zipper that locks.

Finally, if you’re headed somewhere dicey, it’s probably worth your while to invest in two new wallets. The first is a cheap, dummy wallet, which you can stuff with a few dollars and carry in your pocket or somewhere that’s visible in your bag to distract pickpockets. Also, in the unlikely event of a mugging, you’ll have something to throw and run. If you’re someone who keeps several credit cards, rewards cards and business cards in your wallet, you’ll also want a new wallet that you use only for travel. When you extract the non-essentials before traveling, the pouches of your everyday wallet will likely be stretched out, making it easier for your cards and cash to fall out.

These purchases are extra up-front expenses but will save you in the long run by helping you avoid the dangers of pickpockets or muggers.


Best money-tracking apps for traveling

Here are a few of our favorite travel apps that help you manage your money while traveling.

Trail Wallet allows you to set a daily budget and track your expenses against that budget. You can organize expenses by trip or by month if you’re living that nomad life.

Spent allows users to earn cash back on big travel-related purchases. The company has partnered with big names like Airbnb, Uber and Southwest Airlines to offer cash back on tracked purchases. Scan your receipts or download transactions from linked credit cards and banking accounts to get your moola.

Tripcoin, like Trail Wallet, allows you to track daily expenses, but it works without an internet connection, so you can use it no matter where in the world you’re traveling. You can also set up custom categories to see where you’re spending the most money. Tripcoin also supports more than 200 currencies and converts between them automatically.

Splitwise is perfect for those traveling in a group. You can set up a group and trip within the app and track and split purchases to see who owes whom money. The app integrates with Venmo and PayPal, so you can pay each other directly through the Splitwise app.

XE Currency helps you figure out current currency exchange rates for several different countries. You can look up exchange rates on any given day to get a better snapshot of what you’re truly spending and determine which days are the best to take money out.


Have tips or questions about handling your money when abroad? Drop them in the comments below or share on social with the hashtag #NoSmallPlan. And when putting together your travel budget, don’t forget to leave room for a commemorative t-shirt, jewelry or tote bag from No Small Plan.


Jennifer Mitchell is a blogger, comedian, freelance copywriter and travel enthusiast.

** Please know that while the products featured are selected based entirely on travel experience, research and editorial opinion, we do participate in Amazon's affiliate program which may result in revenue from products purchased through any links to products sold on their platform. ** 

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