Money Management Abroad: The Basics

In this exciting blog, I am going to be talking about how I manage my money, focusing on the cards and cash methods. It seems like basic logic but when you can’t read anything in the entire store, it makes it a tad more challenging. Plus, once you add in the factor that they don’t enjoy credit cards here and any card will rack up a foreign transaction fee, you learn to get pretty crafty with shopping.

Let’s start with the beginning. Before you go abroad, you must tell each bank you are with where you will be going, the dates you’ll be there, and which cards you will be using. If you do not do this, they will lock your account as soon as you try to use it. This is a great safety feature but not when it is the only card that you brought! Thankfully, I was told this in advance and this did not happen to me. I was, however, mistakingly told that my debit card would not incur foreign transaction fees.

Foreign transaction fee’s are something your bank charges extra (usually 3%/purchase) for the privilege of using your card abroad on top of the conversion to the local currency. I was lied to in this instance and after a few weeks of paying these fees, I decided to suck it up and withdraw the cash (which also charged me $12 per withdrawal). So, my word to the wise is check with your bank about their foreign transaction policy before going so you don’t end up in my shoes.

Now, your probably thinking “Rachel, what about credit cards? Don’t they have some that are designed for travel?”. You, my anonymous reader, would be correct. And me, being the luckiest person on the planet, had my credit card numbers stolen from me and I found out about it on my second day in the Netherlands. As a result, I had to cancel my card and was left without my “foreign transaction fee free” card. Plus, this country doesn’t accept the bank it was associated with so it wouldn’t of been accepted anyway. So, another word to the wise, check which bank (IE; visa, AMEX, Discover) is accepted abroad in the country you are going to.

As mentioned earlier, it only took me paying about $50 in foreign transaction fee’s before I got wise and started paying for everything in cash, aside from my rent. This is immensely atypical for me as I generally handle my money better when using my card. It turns out, I am doing much better with cash anyway! I began slow and withdrew the money I needed for groceries for the last week of February. I only carried the money I had allotted for that week with me so I was not tempted to spend more. After seeing how successful that was, I withdrew the cash needed for the rest of my trip and have been doing so well since. Withdrawing a larger sum of money at one time is better than doing several smaller ones as you only pay one fee. For example, I paid $12 to withdraw about $200 but if I wanted to withdraw $60, I would pay $6. See the math?

That’s all my advice for today but I will continue with how I’ve been saving money and spending it wisely in my next blog 🙂

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