You have consistently told us that money is the main reason that you don’t travel more. We want to help. #FinancialFridays to the rescue! Come back every Friday for tips and advice to help you travel longer, farther, and more often.
Looking to travel abroad?
Consider the currency situation.
Exchange rates and travel are connected. Rates can affect where you go, when you go and what you do when you’re there.
Here’s a brief summary of where the four main countries that read Solo Traveler are at with the exchange rate. You’ll note that the Brits and the Americans are the big winners since last year. Canadians and Australians, not so much.
The cost of traveling to Europe – There’s only a 2-cent difference between the Canadian dollar and the Euro from this time last year. That wouldn’t cause me to change any plans. Australians buying Euros will pay 13 cents more than last year – a bit of a deterrent. However, for Americans, the Euro will actually cost 20 cents less than it did last year. The time may be right to go anywhere that accepts the Euro.
The cost of traveling to the United Kingdom – The British Pound will cost Canadians 21 cents more than it did this time last year and 30 cents more for Australians. That’s huge. For Americans, the pound will actually cost 9 cents less than it did last year. What a relief.
The cost of traveling to Canada and Australia – Clearly, as Canadians and Australians have suffered recently in the currency exchange game, both destinations have become more appealing from a cost perspective for British and American solo travelers.
Click here to see trends in foreign exchange rates in a variety of currencies.
So, what do you do with this information? Here are my travel tips for exchange rates.
Travel Tips for Exchange Rates and Travel
- Choose a destination where your currency is strong – Above, I’ve just covered the four main countries that read Solo Traveler and what it’s like to travel between them. But there are thousands of destinations. Use an exchange calculator to see what your currency is worth compared to a variety of alternative destinations.
- Know what your costs will be when you get there – The cost of a location could outstrip the high cost of buying their currency. Check out the Worldwide Holiday Costs Barometer 2015 to find out what the cost of a bottle of water, a cup of coffee and other travel essentials are in destinations around the world.
- Time your purchase of cash – If you know that you’re traveling to a destination in the next few months, or even a year off, buy your currency when it seems like a good deal. Not sure? Hedge your purchases by buying every couple of months and you’ll get, more or less, the annual average – no big win but no big lose either.
- Exchange your cash at your destination – If you don’t plan your foreign currency purchases in advance, don’t make them at your local bank just before leaving. Wait till you arrive at your destination and use an ATM machine or a local bank in town.
- Know that there’s always another destination – I believe that I can find any place fascinating. If your dream trip is not possible now due to the exchange rate, it may be possible in a year or two. Balance what’s going on in life with this and it may be best to postpone going to this destination and look again at point #1 – “choose a destination where your currency is strong”.
- Get a basic understanding of the exchange rate in your head – There’s no need to nitpick on a percentage or two on your travels. Round up the number on the exchange rate to a point that you can easily calculate in your head so that you know the cost of what you’re purchasing in your own currency.
And if your currency is strong against the currency of your destination…
- Buy what you can at your destination – If you buy things like day tours or travel gear in advance, you’ll be paying in your own currency. Exchange your currency for your destination and buy when you’re there.
Final tips for Saving on Exchange Rates
- Get a credit card without foreign exchange fees – As a Canadian, I use my Amazon.ca Visa Card when traveling outside of Canada. Most cards managed by Chase Bank offer this.
- Choose a bank account that waives the foreign transaction charges – I have a TD Canada Trust Select Service checking account which does this.
- Avoid foreign exchange kiosks – big time!
See you next Friday!