How to get most of your money when traveling
By Victor Siu
When traveling to another country, there are several key ways to get most out of your money. Among most effective methods is timing your travel right: taking advantage of a favorable exchange rate can considerably enhance your buying power. In real world, though, a plethora of arrangements to be made and tickets to be bought may inhibit luxury of planning travel months in advance. But even if you’re planning your travel just a month or even a week in advance, there are still ways to be smart about your money. To minimize losses when converting to another currency, finding a good place to change your money is key.
Plan to travel when your money is worth relatively more in country you are visiting. Every country has a fluctuating exchange rate so that there is balance in supply and demand of currency. Timing your travel correctly, therefore, can make a significant difference in amount of spending you do.
A clear example of a fluctuating market is euro to US dollar exchange rate. In year 2002, each euro was worth $.83. Now, in July of 2005, each euro is worth an upwards of $1.2059, meaning euro increased more than 31% in three years. This favorable rate of exchange for euros makes traveling to US a much more favorable deal in 2005.
Two ways to see if traveling to another country is a good deal, then, are to look at historical data and anticipate future. You can easily check historical rate of a currency pair by visiting a foreign exchange news site and pulling up a yearly chart. A good website for this is DailyFX (www.dailyfx.com). Having an inkling about future direction of exchange rate may prove more challenging, but it is not impossible. DailyFX has fundamental and technical news reports to guide you in this respect.
When travel plans are made in short term, key to maximizing buying power is finding right place to change your money – that is, getting best rate for time that you are traveling. It is essential to do research in advance, namely, checking rates at domestic banks, credit cards, foreign banks, and ATMs.
At Home At home, you can contact your local bank teller and ask about changing your money to a foreign currency. Experts suggest to only change enough to cover travel costs until you are settled at your destination though, as costs of exchanging money at home can be prohibitive. Another service available is an online money exchange, which will take your funds and send converted money to your home. The risk posed in this service is safety of your funds during transportation.