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6 Financial Tips for Traveling Abroad

Personal Finance
Tourist couple smiling and taking pictures after reading tips for traveling abroad

Taking a vacation or any kind of trip outside of the U.S. can be a fun, exciting and culturally enriching experience. To make sure your trip is as enjoyable as possible, you'll want to try to stay ahead of any financial challenges that can arise between booking your trip and boarding your return flight.

These six financial tips for traveling abroad could be a good place to start.

1. Make a Budget

Among the considerations of traveling abroad, setting a realistic budget may be the most fundamental. You'll have to do some research into the cost of basics like hotel rooms, tours, car rental fees and any admission costs associated with your points of interests. The more services you can book and pay for in advance, the more likely you'll be able to accurately budget for your trip.

You can also look into the average costs of expenses you can't pay for ahead of time, like restaurants, local tipping practices and transportation. The last thing you want is an onset of "sticker shock" forcing you to change plans on the fly and miss out on the things you most wanted to do or see.

2. Understand the Local Currency

Although some merchants in some countries will accept U.S. dollars, you'll most likely use the local currency. Consider looking up the currency's current exchange rate against the dollar online, then practice converting local currency amounts into dollars and vice versa. This may help you get used to performing rough calculations of the dollar value of purchases when a souvenir catches your eye.

You can also download smartphone apps to help with conversions. This way you'll know that you won't inadvertently buy something for a much higher price than you'd ordinarily pay.

3. Consider the Exchange Rate

If you're traveling to a country with a different currency than yours, there will be an exchange rate. An exchange rate is the amount of one currency you can exchange for the other. These rates tend to fluctuate, so you may want to look into the current exchange rate before you leave for your trip. For instance, you may want to "lock in" a particularly good exchange rate by prepaying some of the larger expenses you know you will incur, such as a portion of your hotel bill. On the other hand, if the exchange rate is unfavorable to you, you may want to wait until you arrive at your destination to pay for certain things. There are no guarantees but doing your research ahead of time may help you make a better financial decision.

4. Safeguard Your Valuables

It's important to be careful of pickpockets when traveling abroad. Consider limiting the amount of cash you carry with you and being thoughtful about where you keep it. For example, splitting cash into two or three pockets could help minimize a loss caused by a pickpocket. Travel stores sell money belts and other cash-securing devices that may also help.

5. Keep Your Card Information Handy

If you lose a credit or debit card, you may be able to protect your account more quickly if you have noted your account numbers and the international toll-free phone numbers you need to alert the card issuers. They might even be able to send a replacement card to your hotel before you move on to your next destination.

6. Inform Your Bank

Some financial companies will block foreign transactions if you haven't notified them of your plans. Contact your bank or call the phone number on the back of your card to notify them that you will be traveling. While you're at it, find out what fees, if any, each card issuer and your bank will charge you for foreign transactions so that you can decide which card to use the most when you're abroad.

Following these financial tips for traveling abroad could help you make smart financial decisions. You may even keep the trip cost down low enough that you'll be planning your next tour much sooner than you would have expected.

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