Guide to Managing Finances when Going Abroad

Going on holiday is an extremely exciting thing to do, and you certainly don’t need me to tell you that. It’s often the pivotal point of the entire year, the time that spurs you on through difficult work deadlines and even more difficult at-home budgeting; it’s the only period of time you can well and truly relax – in principle, at least.

Unfortunately, we’re more money-conscious than ever before, and with the ever-lasting impacts of both coronavirus and the cost-of-living crisis, it’s harder for us to relax about our finances than ever. With holidays being undeniably costly affairs, how on earth can you be expected to enjoy yourself without fretting about the price of locally-sourced fish? Well, the following money management tips could well be the calming influence you need… 

1. Setting a Travel Budget and Sticking to It

This tip is an evergreen one, and has always been a key aspect to proper holiday planning regardless the state of our national economy: set a travel budget, and stick to it. Every holiday has the potential to balloon in cost if you’re not keeping a careful eye on your spending, but that kind of mindful expenditure is both taxing and boring when you’re meant to be having a fun time away from worry! 

Rather than leaving yourself room for anxiety, set your budget ahead of time; give yourself a spending budget for the whole holiday (with a little headroom), and split it up into allowable expenditure per day. Make sure this money is ringfenced from accommodation and transport costs, and you’ll be good as gold. A good way to do this is to use a pre-paid card for travel, or a budgeting app that lets you allocate your money to different holiday-cost pots.

2. Currency Exchange and Foreign Transaction Fees

If you’re not careful, you can lose a lot of your holiday money to incidental and invisible costs – namely, exchange rates and foreign transaction fees. Exchanging money from one currency to another costs you money, even if you’re just using your debit card in another country. If you’re using cash, shop around for the best exchange rates at bureaus de change in your nearest city.

Some bank cards can also have hidden fees relating to foreign transactions; you could mitigate this by using credit cards that do not charge foreign transaction fees, and which are transparent about the exchange rate you’ll experience when using them.

3. Managing Your Finances During Your Trip

We’ve already made mention of using apps to manage your budget, but here let’s drill down a little more. By splitting your holiday costs into key brackets – transport, accommodation, food and drink, ‘fun money’ and so on – you can properly manage how much you put towards activities. 

Some budgeting apps let you set up alerts and reminders, to enable you to effectively outsource your worry; you get to spend the day enjoying yourself, and your phone will tell you when your daily spend limit is nearly reached. These apps can also let you set an untouchable emergency fund, which you may need in the event of an unexpected issue or accident.