Money and travel: How to maximise your overseas holiday funds

We all love an overseas holiday. But no one loves the additional charges that can be dropped on us for using our money when on the road. It puts a bit of a dampener on returning back to normality!

We’re often asked about travel, particularly how you can best manage the financial aspects of it. So here are a few areas that I think you should look at to ensure you better manage your money when travelling.

Currency transfers

We’re often asked about maximising currency exchange, with the theory being to look at transferring money early, when you have a ‘preferential’ rate.

My first tip is to avoid the practice of trying to guess exchange rates. It’s a difficult game to play and one that almost always ends up with you no better off than if you’d just swapped the currency at the time you needed it.

Instead, spend time focusing on the costs involved. There are many different currency converters so look at what option suits you best. Many providers look to double hit you on commissions and other charges, so look at what the real cost is, both when you convert cash before your holiday and after you return.

Also, think carefully about how much cash you want to carry, especially if you’re heading to countries or areas that are less developed. There will always be a threat of losing your cash or theft, so it pays to consider how much physical currency you really need.

Credit/Debit cards vs. travel cards

As a general rule, I’m a big fan of travel cards. They dramatically reduce your conversion fees, are easy to top up, and provide you with a back up card in case you lose the original. You can also pre-load multiple currencies, so if you’re hopping between countries it can be a real bonus.

It’s no secret that the banks like to charge like wounded bulls when it comes to overseas transactions. These can come back to sting you so it’s worth planning this out upfront.

The one downside I’ve seen with travel cards is trying to convert any leftover money back to AUD upon your return; some of the fees can be excessive. If you can, try to accurately plan your spend upfront to save you the hassle later.

Always take out insurance

This might sound obvious, but there are plenty of statistics showing that many Australians still fail to purchase travel insurance. Go online and you can see plenty of horror stories where people have failed to take out insurance and had a medical emergency that’s cost them hundreds of thousands of dollars.

The other thing to consider is what type of insurance you take out. There will be inclusions and exclusions in your policy, for example, many policies will exclude cover if you undertake ‘extreme’ activities. Some of these might surprise you: Sports, such as surfing and skiing, may be excluded on standard policies, so make sure you check the fine print.

Shop around

There are many ways to book a trip, with plenty of online deals and travel agent specials to consider. From a financial perspective, be prepared to shop around as you could find some significant savings.

Travel agents are still a great resource and can offer benefits beyond just taking the legwork out of booking your holiday. For example, should an airline cancel your flight, your agent can take over the process of having you rebooked. That can remove a lot of hassle on your end when you’re ultimately trying to enjoy yourself!