Alberto Araya is a current undergraduate Finance student enrolled in the Honors program at the University of Florida in Gainesville. His areas of interest lie in investment banking, financial consulting, and collaborating with NGOs focused on economic development in third- or second-world countries. In the following article, Alberto Araya discusses smart money management strategies when traveling abroad.
Headed overseas for a great adventure? In addition to selecting the right hotels, restaurants, bars, and tourist attractions, one should always make a financial plan for vacationing on foreign soil. It’s easy to get swept up in the glamour of a vacation abroad, but individuals should never forget to make a few smart money management choices which will allow for full relaxation and enjoyment without worries about cashflow.
Alberto Araya of Gainesville provides a few smart tactics for managing money, effortlessly navigating foreign countries, and making the most of a vacation.
Alberto Araya Says Start Saving Money Before the Trip
It’s not enough to just grab some cash and stick your credit cards in a wallet before you head overseas. In addition to budgeting for the flights, transportation to/from the airport, and potential car rentals, look at the hotels in the area you’re heading to and see what is reasonable for your budget.
Are there any tours, museums, historical sites, or excursions you hope to participate in that come with a cost? This will give you a sense of how to start saving – maybe you need to start setting aside a few hundred dollars a month to prepare for your adventure. Consider setting up an automatic transfer every month to a savings account.
Alberto Araya says that there can be lots of hidden fees, including exchange rates, baggage costs, souvenirs, additional meals, gratuities, etc. that are unexpected, so budget in at least several hundred dollars for “extras.” You don’t want to go into debt over your vacation!
Check Out the Exchange Rate
Alberto Araya of Gainesville notes that the exchange rate between U.S. dollars and the local currency of your destination of choice can work in your favor – or not. Either way, it’s smart to check the rate online and prepare accordingly.
Enroll in Global Entry to Save Time
To avoid getting stuck in interminable lines at customs, consider budgeting $100 to a one-time application for Global Entry. This will allow you to get into the express line at customs and immigration – forever! Be sure to apply a few months in advance since, like getting a passport, the process to get the entry approved can take some time.
Credit Cards vs. Cash
Alberto Araya also says that while some might recommend using mostly cash abroad for in-person payments, by and large credit cards are the wiser choice. With cash, one must understand the local currency and the foreign bills and coins can get quite confusing in the moment.
Credit cards allow one to access the best exchange rate, and in many cases may not even charge an international purchase fee – which is the number one reason some folks usually recommend using cash abroad!
Alberto Araya of Gainesville explains that certain locales, such as parts of Italy, are known for pickpockets targeting tourists. If you’re carrying a lot of cash, a theft could be devastating. With credit cards, one must simply immediately report the card stolen and get a replacement. Companies like American Express have offices internationally that you can visit for easy access to your account, assistance, and getting a card re-issued.
Plus, if you have a card with a rewards program, you’ll be earning points with each travel purchase, which could in turn be used to fund your next vacation! It’s a win-win.
Notify Credit Card Company of Travel Plan
Speaking of credit card theft and fraud, it’s smart to notify your credit card companies whenever you are about to travel abroad. Most cards have an online portal or hotline where you can easily enter this info in just a few minutes. Give the specific dates and location where you will be, so that when foreign charges from that time and location pop up, the company won’t assume it’s a scam and put your account on hold.
Pick Up Foreign Cash Before You Leave
That said, it’s still good to have some cash on hand for minor purchases or venues that may not accept credit cards. Getting the cash in advance saves you time and the hassle of trying to find an ATM when you step off the plane, when you’re exhausted and just want to go lie down in the hotel. Most local U.S. banks can provide foreign currency exchanges with a few days’ notice.
Set Up Auto-Pay on Bills
Alberto Araya of Gainesville says that even though you’re jet setting, your bills at home must still be paid! Consider setting them to autopay while you’re away so you don’t have to remember to do this tedious chore during your fun in the sun.
With some advance planning, budgeting, and communication with credit card companies, traveling abroad can be a breeze and a worthy way to spend your extra dollars on an experience you’ll never forget.