Manage your budget in trips abroad

When planning for trips abroad, make sure you include your budget. With easy access to money through international ATMs (Automatic Teller Machines) and credit cards, it's easy to lose track of your spending. This usually happens in impulse purchases, when you see items that YOU REALLY MUST BUY because you don't have it in your home country. Here are tips on how to keep your finances on track when travelling abroad:
  • Cover the basics. Have a meal and transportation budget. Ask around for the average cost per meal in the country you're visiting, and explore transportation options as well. In most countries, the cheapest and most convenient form of travel is usually by train or bus.
  • Set aside a shopping budget. Having covered the basics of meal and transportation, you are now sure that you won't go hungry or lost in your country of destination. The next step is to decide how much you're willing to spend on shopping in that country. This is a number that entirely depends on you.
  • Have a contingency fund. This is usually a day's worth of your basic expenses. You could probably include a budget for an extra night at a hotel. Why is this important? You can make sure you're covered in case something unexpected happens. I learned this the hard way when our Cebu Pacific flight back to Manila from Shanghai got cancelled. Yes, cancelled! There were a few people there who no longer had money to spend for an extra day. Make sure this doesn't happen to you.
  • Bring only cash for your budget in an easily-traded currency. I usually just bring US dollars for any trip abroad. Foreign exchange shops would easily trade your dollars in the local currency. When you arrive at the airport and have no local currency to pay for taxi, trade a few dollars at the airport enough to pay for transportation.
  • Don't trade ALL your dollars at the airport. Most often than not, airport foreign exchange centers give lower rates than forex services in the city. You'll have better value for your money elsewhere. If you don't have any money in the local currency, trade just enough for transportation and your first two meals so you have money to spend before exchanging your dollars at a better location.
  • Be wary of using your credit cards and ATM cards. These cards give you easy access to money, but they come with extra fees. Be sure you're willing to pay extra if you decide to go for credit and ATM cards. Review your credit card policy. They usually bill your foreign purchases in the local currency, and they use their own exchange rate. For ATM cards, you can use your bank's ATM card in any of their partner banks abroad. However, exchange rates are usually high. I got a 1RMB = 8PHP rate when I was in Shanghai, compared to a market rate of 1RMB = 6PHP. That's 30percent increase!
  • Do I really need this? Ask yourself this question if you see an item you're drooling for. Weigh the options carefully. You might not need the item, but you're sure you cannot go back to that country again for the next few years. In this case, you could opt to buy. If possible, it would be good to sleep on it. If you still can't get that thing out of your mind the next day, then go back for it and buy it if it makes you feel better.
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Mai da Paypay said...

i agree with not exchanging all dollars in the airport. airport rates are harang. and not only that, each exchange cost you money and sayang!!! :-)

GingGoy said...

i know many people who're like that. spend everything they have before going to the airport. good thing flight cancelations didn't catch up with them

Unknown said...

hi mai! yeah you'll lose money with the exchange rate at the airport. :)

Unknown said...

@tutubi: they're lucky! getting to the airport is certainly not a guarantee of a hassle-free flight home. i learned that the hard way when shanghai-manila flight got cancelled.

Anonymous said...

Very good tips... There is an exemption in the exchanging all your money at the airport tip. I found out that moneychangers at Singapore's Changi Airport gives a much better rate than downtown moneychangers.

Unknown said...

@kegler: thanks! i didn't realize changi airport had cheaper exchange rates. will keep that in mind the next time i go to singapore :)


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