This post was written in collaboration with CompareHolidayMoney.com.
In life, I am always trying to optimize everything. Time spent doing a particular task, amount of money spent for maximum enjoyment, and so on. And if there is something I find frustrating, it is to work or spend more money than I should to get exactly the same result.
Take travel money for example. First, there is the part you can’t control, the currency fluctuation. Say you buy your currency in January because you think there will be less demand than in the summer and you might be able to get a better, rate, and then something like a bad economic report happens and shakes the markets.
Or vice versa. But that means you would get lucky, period. However, if in January, the pound is strong enough that you can afford to buy your whole holiday budget worth of currency and sleep soundly until summer, by all means, go for it.
Now onto the variables you can control, and optimize. It has gotten easier than ever to compare exchange rates and deals on currency exchange. CompareHolidayMoney.com for example, is Europe’s biggest dedicated travel money comparison service, and by doing a quick search on their website, you can save up to 10% on travel money.
And a lot of time. In just a few clicks, you can compare exchange rates from different currency providers, instead of spending days walking into banks and foreign exchange dealerships. We know time is money, so not only do you get the best rate out there, you also save on fuel, parking fees, and sanity.
You can have the money posted, or if you are in a rush, CompareHolidayMoney.com even offers a collect service that allows you to pick up your cash at a local store or at the airport. Visit their website for more information.
But how do you optimize how much to order? Or how to pay for the holiday?
The first thing I do is start a holiday budget. It is pretty easy to browse travel forums and estimate a daily amount to cover food, excursions, and anything outside of your flight and hotel.
Once I have that, I adapt the budget to my particular needs. For example, if I rented a place with a kitchen, I would budget for a meal or two out, instead of three restaurants a day.
Then I also add the splurges, like that balloon ride or diving trip. They are one-offs, not daily occurrences.
Armed with my holiday budget, I now define how I am going to pay for all that. Cash or debit, of course, or a credit card that will be paid in full upon return (or the same day if you withdraw cash! The APR runs immediately for cash withdrawals, at least on my card).
You don’t want to charge a holiday on a credit card and pay for it over the next year! But further than that, the perfect cash/card balance will depend on the country, how widely cards are accepted, how safe it is to carry cash, how much tipping or expense splitting is required, which is always easier when you have small change.
While you don’t want to be short on cash, and end up making an expensive ATM withdrawal, you don’t want to end up with too much cash either, and having to exchange it back at a loss.
It is a delicate balance, that travel experience will help you refine more and more.
If you do end up with leftover currency, CompareHolidayMoney.com also has a currency buyback deals comparison feature. Again, you can compare offers and get the best rate to sell back your foreign bills.
Nowadays, what I do is get just the minimum amount of foreign cash I think I will need, plus a few Dollars in small bills, that I can always exchange easily anywhere if I need more. Or Euros for countries near the Eurozone.
Because I travel a lot, I don’t worry too much about having extra Dollars or Euros. Yes, their value fluctuates, but in the US or the Eurozone, they still buy goods and that’s what I need them for.
Since I am bad at keeping track of cash, the rest of my spending is done with a card. An easy way to carry currencies abroad is a prepaid currency card. You can buy prepaid Euro, US Dollar and even multi-currency cards.
Some have no conversion fees, some have no transaction fees, and some even won’t charge you for ATM withdrawals. They work on the MasterCard network so will be accepted anywhere that takes MasterCard. They all work differently so read reviews and compare them on CompareHolidayMoney.com.
That way, you should have minimal cash at the end of your holiday, while enjoying the best rates during.
Have a nice one!