Money Management Tips for Traveling and Living Abroad

So for a little change of pace, I thought I’d write a post about how to manage your money while you’re traveling or living abroad.  I haven’t been traveling in a while now (which is slowly, but surely, killing my soul), but I have gained a lot of wisdom about traveling that I figure I should impart upon other eager wanderers. In fact, I was inspired by a recent customer service call with Fidelity bank that went so well, that I thought to myself, I should really write a post about how great banking with Fidelity is, especially if you intend to spend a good chunk of time abroad. So, in addition to that, here are some good tips for money management (and smart travel) while you are traveling outside the U.S.

1) Tell your bank where you’re going to be traveling, and where you intend to use your ATM and credit cards. This way they won’t suspect fraud and freeze your accounts when they see that suddenly someone is making purchases or withdrawals from a foreign country.

2) While you’re on the phone with your bank, ask them what their foreign transaction fees are for using credit cards and ATM cards abroad. I have gathered from living and traveling abroad that people really like to use their credit cards freely, but your bank is probably charging you anywhere from 1 to 3% of your purchase each time you use your card, along with a fee that Visa or Mastercard charges as well. Just as a real-life example, below are my notes that I took down before I moved abroad to South America. Girl did her homework!  If you have several credit cards and/or several debit cards, it’s worth comparing to see which one gets you the best rates.

This was for an ATM card comparison.

3) I always like to bring with me a sizable amount of cash when I travel to a foreign country, just so I have money that I can exchange immediately, and don’t have to deal with finding an ATM that works, etc.  The other advantage of bringing lots of cash with you is that you don’t have to get gutted by transaction fees and ATM fees.

3a) But a caveat to this is that you need to be careful where you stash this cash. If you have a lot of money on you, divide it up into different envelopes/compartments, and keep good track of where your purse/backpack is at all times, i.e. keep an eye on it, literally. And at the risk of seeming like your mom, I actually really like money belts–the soft fabric kinds that lay flat against your belly underneath your clothes.  These also make a great place to store passports, important tickets, credit/debit cards, hotel room keys, etc. when you’re on a long bus or train ride, and don’t necessarily feel comfortable leaving all of that stuff in your backpack while you sleep. (You might be able to tell that I’ve been on some sketchy bus rides.) The same goes for if you’re staying in a hostel that doesn’t provide lockers that you can lock. You can safely tuck that money belt under your pillow or discreetly under your arm/blanket/whatever you decide is safest without being obvious.  (Note that this does not necessarily help if you’re one of those sleepers that tosses and turns and ends up with the covers thrown aside and the pillow askew, since the money belt might just end up in the middle of the floor.)  Money belts are also just good for those people who tend to lose or misplace things easily, especially when you’re traveling with a big backpack and find yourself rifling through all its contents any time you need to find anything.

4) Do yourself a favor and do a quick Google search to find the current exchange rate before you leave. You’ll feel better once you land in a foreign country knowing more or less how much bang for your buck you should be getting when you exchange.  (This might be especially helpful when going to countries where there’s a very high foreign currency to dollar ratio, which can be disorienting. For example, in Cambodia, $100 U.S. dollars will get you $409, 300 riel. That might seem like a looot of money if you aren’t familiar with the exchange rate.) Having some idea of the exchange rate before you go will also help you in understanding how much you’re spending on those initial hotel or hostel rooms, cab rides, tuk-tuk/boat/van-taxi rides, meals, etc.–which will give you some sense of whether or not someone is totally try to take advantage of you or scam you with unfairly high prices.

5) Once you’re situated, if you’ve brought a lot of cash with you, ask the locals where the best places to exchange money are (and then confer it with another local, or the people who work at your hostel/hotel). I’ve found that it’s been different in every country I go.  In China the hotels often gave the best exchange rates. (But in almost any other country, avoid changing money at hotels as they typically have really bad exchange rates.)  In Argentina it was the banks that had the best exchange rates; in Malaysia and Brazil the best rates often came from those less-than-official-looking money exchange kiosks on the street.

6) Finally, get yourself a Fidelity checking account. I know this sounds unconventional, but I switched to Fidelity when I planned on moving abroad and it has been great move in every way. Because Fidelity doesn’t have many physical banking centers and no ATMs, they allow you to use any ATM, from any bank, anywhere in the world–and they don’t charge you ATM fees!  They also reimburse you for the fees that the bank whose ATM you’re using charges you.  For foreign transactions, they do charge a 1% foreign transaction fee, but that’s still less than what most other credit cards and ATM cards will charge you.  On top of that, every time I’ve ever had to call Fidelity about an issue, or have any questions, their customer service reps are hands-down the most friendly, helpful, and patient people I’ve ever dealt with at any company. Get thee to Fidelity, seriously.

And just because I like to share the knowledge wealth, I happened to come across this article in The New York Times about “Money Tips for Globe-Trotters” this past week as well. I’ve covered most of the author’s tips here, but she mentions something about credit cards with smart chips? I dunno, I have yet to run into any problems with my normal credit cards, so that one I’ll have to defer to her.

Do you have any other tips for smart money management while you’re abroad? Any other tricks or helpful advice you’ve picked up from traveling? Share them in the comments!


3 thoughts on “Money Management Tips for Traveling and Living Abroad

  1. I went to Uganda last year with the realization that ATMs may not be available and credit cards wouldn’t be an option. I ended up taking a lot of cash with me. Researching it in advance I discovered that new crisp big face $50s and $100 will get you better rates than smaller bills and they are a lot easier to carry around. The best part was $400 was enough to make me a shillionaire.

  2. Haha, don’t know what happened with your gravatar/sign-in, but since I can see from the WordPress email that was sent to me that you aren’t a spammer, thanks for the comment, Cocos! That’s actually really interesting! Do American credit cards not work there? Why did you go to Uganda? And isn’t it just swell when you get to be a shillionaire abroad?

    1. I’m not sure what WordPress did but they clearly don’t respect my branding. I went to Uganda for work. Credit cards kind of work there but I was also warned that there are a lot of issues with people swiping your number. Also the merchants tack on a fee for processing. There are some ATMs but they are, if anything, tied to Chinese or Barclay’s banks. I took some pictures while there and I’m sure you can see from a few of them my level of enthusiasm about being outside the Beltway 🙂

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