The one you’ve all been waiting for. Part three. All about the moola. Not normally a topic I would find particularly sexy, but in this case, I think you can agree it really is. By following some pretty basic steps, we ended up saving $1,827 from rebates (namely from withdrawal fees) and earned $621 in interest solely from banking with ING and UBank during our year abroad. That’s $2,448 AUD we wouldn’t have had if we hadn’t been savvy managing money abroad.
Unabashedly, I recommend this post for every-single-traveller out there. While we learned the majority of these tips along the way, I’d be lying if I said the Barefoot Investor didn’t have a little something to do with it too. Given I’ve talked non-stop about Scott Pape’s book, I’m expecting him to contact me regarding commissions any minute now. Before we get into it, if you’re interested in how we saved our money in order to go travelling you can read about that here and here. Because after all, you are going to need money in order to earn money. That will make more sense below.
I do need to preface this by saying that I am in no way educated in finance and have no qualifications on the subject (you’re shocked aren’t you?). But I do have a smart cookie for a boyfriend and notwithstanding, I have a good fifteen years of experience travelling abroad.
Interest
Before we left Australia, I’d researched which bank accounts awarded the highest interest. I was a little disappointed that the longevity of my Dollarmites Club membership at Commonwealth Bank gave me very littel currency when negotiating a better rate (pun alert) and hastily moved our joint savings to Ubank. In a mere moment, our interest rate went from 0.1% to 2.8%.
We earned a total of $621 in interest during our year-long sojourn. Excuse me reader, I have to go full caps/bold here for a minute. THAT’S $621 OF FREE MONEY. I should mention, we were also pretty savvy on when we transferred money in and out of the account to ensure we were constantly eligible for the bonus interest rate each month.
Cash Withdrawal Fees
We’ll talk about cash a little later, what’s most important for you to know now is that we saved $1,827 on ATM cash withdrawal fees. We found some ATM’s along the way were charging up to $20 AUD per transaction. Can you imagine those fees on every cash withdrawal. That’s a lot of money! Especially if, like us you are weary about withdrawing large sums of money each time you visit an ATM. Thankfully Ubank and ING refund withdrawal fees immediately so we never had to pay along the way.
Currency Converter fees at ATMs & Point of Sale
Our biggest advice: always, always, always make your purchase in the local currency. We never choose to pay for goods if we were being charged in AUD because the fees and exchange rates are without fail scandalous. Always choose the local currency to avoid nasty exchange rates.
Accounts
To access our joint savings, we used three accounts. One for the bulk of our money (we don’t have a card for this) and two (one each) that we transferred money into as required.
Why? Firstly for security. If we had our wallets stolen we knew at least one of us would (ideally) have theirs as backup, and we were never at risk of losing the total amount, as it was stored in a different account. Secondly for the interest. We wanted to keep the bulk of the money in the one account to accrue the interest and only transfer our subsidiary accounts as needed. Thirdly to keep track of our spending and keep within a healthy budget.
Paying by cash or by card?
Paying by card was a double edged sword. For starters it was easier to overspend by using contactless points of sale, it was also a nightmare for Moo to track. He kept a spreadsheet of everything we spent over the entire eleven months, and while waiting for payments to clear, the currency conversion would often blow out the total sum – causing him major headaches (plural). Then again, we never wanted to carry too much cash with us, so using both cash and card was a fine balance.
Cash
On arrival: Sure, having cash in the currency of the country you’re visiting on arrival is handy. But we never found it essential. Namely because we were able to use Uber (we used it worldwide!) or pay by card for train or bus tickets to get from the airport to our destination. We avoided withdrawals from ATMs at airports because of their notoriously poor exchange rates. Come to think of it, we never exchanged money at banks or airports or currency counters.
In country: We are big fans of using cash while abroad. Small denominations of money allow for purchases that simply wouldn’t be possible with card. Around the world, food markets, some cafes and restaurants, surf board hire and supermarkets would often be cash-only operations, so we were always glad to have some on us. Plus, as mentioned above, cash was a lot easier to track on the spreadsheet.
Prepaid travel money cards
This is something we don’t use, but admittedly I did have and have used plenty of in the past. I understand how convenient they are but on our last trip, we didn’t feel we needed one. The biggest problem for us was that not all currencies were available to convert from AUD. Only the Euro, Pound and USD would have been accessible to us. I did have a Commonwealth Bank travellers card with me on the trip as a backup (in case I lost my Ubank card) but didn’t use it once.
Credit cards
Mat had one, I didn’t. He only used it for when deposits were required for car hire. As a rule, I’ve decided credit cards and me – do not mix. Mainly because I never pay them off (until one day I did!) and so after learning the hard way, I chopped them all up.
However, if you’re more responsible with money than me, make sure you know your credit card limit and withdrawal limits.
Travellers cheques
Lol. I have used them in the past. I feel these are most certainly out of date by now. Millennials: it was a cheque you’d buy from home and exchange for money at a bank while you were abroad (I’m certain at least one of you didn’t know!).
Wiring money
I’ve done this once (in Cuba, that’s a story for another time), it was a saving grace at the time but it cost me in conversion fees, big time. I don’t recommend it. But know that it’s an option if you every lose all your money and cards.
Lastly, always, always, always tell your bank when you’re travelling and where you’re going. Banks are smart and they want to protect us from fraud… But they will block your card if they suspect your card is being hacked. We had one experience on the trip where Moo’s card was declined, in our defense, we didn’t know at the time of leaving Australia which countries we were going to be visiting.
PS: So what about you? How do you handle money when you travel?
Until then xo
Images via Unplash