Travel budgets and currency exchange
For years people have been traveling on vacation and exchanging money when they arrived at there destination; there’s always a bank or exchange merchant open to handle an exchange and the merchants usually get the best end of the deal. Most vacations out of the country are planned months in advance. Where to stay and where to eat are priorities, as well as researching local attractions and transportation options. The currency exchange rate is also important when foreign travel is involved, so most people look at a conversion chart before the trip, but never exchange money. They assume the rate will stay the same and they base their travel budget around an exchange rate that may be several months old.
The currency exchange market is constantly changing and what was posted yesterday is history today. Waiting until the last minute to exchange money for a holiday is like playing Russian roulette with a fully loaded gun. Currency exchange doesn’t have to be expensive unless you ignore it. There are several ways to exchange money without absorbing additional expenses; all you need is information and a currency averaging plan.
Can I use a bank or a credit card to exchange currencies?
Banks usually add a surcharge to each currency exchange transaction and they may only post an exchange rate once a day, so they always make money on an exchange. Credit card companies use a rate with a built-in profit, plus they charge a surcharge if you use your credit card to make purchases while on vacation. Banks and credit cards are always ready for business, but your budget may take a beating if you use them.
Even after going through an extended planning process as well as looking at currency exchange rate charts, some people still wait until they land at their destination to exchange money. For some reason they believe that the rate won’t change that quickly and take their chances on arrival. It’s not uncommon, given the current economic conditions, to experience a 1500 point swing in a currency pair in a matter or two or three days. A change like that could cost an extra $150 for every $1000 exchanged if the exchange is a Dollar to Euro pair. Travel budgets can be destroyed unless a few simple steps are followed before the holiday begins. The first step is to find a reliable currency trader who can give you accurate information and the next step is to think about averaging your currency exchanges.
What is currency averaging?
The best way to protect your money from an unwanted swing in the market is to start exchanging small amounts of money as you plan the trip. Several small exchanges will give you an average, so you can place a currency trading expense in your budget that’s accurate. Waiting until the last minute when you visit an emerging currency country like Russia, Argentina or Hungary (budapest) can be an unwanted wake-up call if they have a sudden surged in their exchange rate. Sudden surges in value can happen overnight and can wreck a travel budget. By exchanging money before the trip you protect yourself from those surges, as well as other unforeseen rate changes. Averaging your exchanges takes the stress out of the currency exchange process because you know what to expect and can build your budget around that information.
Other travel thoughts
Some countries do impose restrictions on the amount of cash you can carry into the country. It’s always a good idea to find out what those limits are before you arrive. If you are over the limit officials may confiscate your cash. Cash should be carried on the body in a money belt or a hidden pocket which is out of sight. Purses and wallets should only have enough cash for small purchases. Common sense and awareness are the best security tools you can use while traveling.
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