Managing Your Spending Money

November 4th, 2011 | credit cards, frugal tips, Money, money management techniques, Personal Finance, shopping, travel, vacation

Whether you’re flying away with your family, taking a culture-filled weekend break with your other half, or even just a week relaxing in the sun; there are always hidden costs to travelling which you need to look out for. The first cost to think about once you’ve booked your trip is the spending money; how much you should take, and what form to take it in.

Many people rely on their debit cards at home because of their ease of use, but there are loads of charges which can be incurred when used in a foreign country, and you’ll be welcomed with a hefty bill and a big shock when you return home. Usually, the exchange rate when withdrawing cash from an ATM using your debit card is the same, or sometimes, better than the rate supplied by a bureau de change, but when using the card to purchase products or services; you can be charged a lot on top by your bank.

If you’re a pretty organised and prepared person, you might want to take a look at purchasing a currency card. Much like traveller cheques, you can credit these with a fixed amount of money, and use them anywhere in the world like you’d use a card. These can also be topped up from back home, so they’re a good idea for parents who want to keep an eye on how much their child spends abroad.

The common consensus with credit cards is that you’ll get charged a ridiculous amount for using them abroad, but this simply isn’t true. As long as you do some shopping around, you’ll easily be able to find a card which doesn’t charge you for withdrawing cash in another country. Better still, you have loads more protection with a credit card than anything else. For example, if you purchase something abroad and it turns out to be faulty, you’ll be able to claim a refund from the credit card issuer.

The amount you spend is entirely up to you of course; try and work out what sort of activities you want to do there, how many meals you’ll be eating out, etc. It’s sometimes better to only get a small amount of money before going, as currency exchanges are often cheaper in the actual country than they are at home.

It’s also worth remembering too that your travel insurance will only cover you for a certain amount of spending money, so make sure you read the small print and work out how much you’re covered for. Depending on what activities you want to do, or how old you are, you could end up paying more for your insurance, for example the older generation can now get special travel insurance over 70. Overall, the best option would be to take a bit of currency with you, and for everything else use a credit card which won’t charge you, and of course, enjoy your trip!

Image courtesy of Jennuine Captures

Originally posted 2011-06-16 12:36:02. Republished by Blog Post Promoter

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