The Three Types of Money You Need While Traveling
Traveling should be liberating and worrying about money usually has the opposite effect. Therefore, before going into the unknown, you should prepare your heart, mind, body, and wallet. Depending on the country you are going to, some options are better than others.
However, these are the one we always recommend, since they check simple principles:
- never keep all your values in the same place;
- limit the amount of money you can lose if anything goes wrong;
- have a backup solution that can get you out of trouble.
Cash in local currency
Never get local currency in your home country. Chances are that you will pay more than it is worth. However, once you reach your destination, it will become mandatory to have local money for everything from food and water, to transportation and souvenirs.
Check international exchange rates before leaving home and double check once you arrive. Usually, exchange offices in airports and train stations could charge a fee for their services. The safest way to go is to use your international card at a local ATM. More on the subject of what type of card is best to use in the following section.
Do some planning before leaving home and evaluate how much you intend to spend, by checking the cost of living in the country you are about to visit. Take out from the ATM the amount you expect to need for at least half of your trip since there are some fees associated with each transaction.
Prepaid debit card
When traveling, a card is a handy tool which can be used for payments in most places. However, we advise you not to take your credit cards with you. Just imagine the amount of trouble you would go through if you lost your wallet or it was stolen. Canceling or freezing cards in the middle of a vacation is not the most fun activity.
In fact, the best option is a prepaid debit card. This has the advantage that it can help you stay within a fixed budget. Nowadays, most of these come with attached apps that help you keep track of your spending or even share the info with your spouse, just like you share the account. The monthly maintenance fees are around $4 but can be waived if you have enough usage, like above $400-500.
There are a lot of options to choose from, you just need to find the right one for you: https://aaacreditguide.com/best-prepaid-debit-cards/.
Use the prepaid card at local ATMs to get domestic currency at the best rate. Inform the issuing bank about your travel plans and check with them to ensure you get coverage. You could even ask for a list or map of accepting ATMs.
We only recommend taking credit cards if you decide to rent a car since some companies would not accept debit cards or the prepaid version due to limited funds.
Cash in an international currency
Always keep some foreign currency like dollars or euros in medium (10-50) denominations as your emergency money. Don’t include these amounts in your spending budget but hold on to them just in case. You might need them to get a better souvenir, pay for an extra night at the hotel, or even bribe your way out of a difficult situation.
When traveling be mindful of money and only use it as a way to fulfill your needs. Be grateful to your hosts and offer generously especially if the people in the country you visit are making their best efforts to provide you with a memorable experience. Remember, in 10 years’ time you won’t remember the tip, but the smile on the face of the person receiving it.