Planning to go abroad can be a stressful process. From insurance to Visas to money, there are a lot of areas to cover before departure. One of the most important areas to cover before leaving for a vacation or move abroad is your financial accounts – bank, credit cards, investing accounts.
It’s vital to simplify these accounts before departure so you can enjoy your time instead of wondering about that extra $43 sitting in an unused checking account somewhere. I’ve spent just two-weeks abroad and I’ve spent up to three and a half months, so I’ve seen the best and worst ways to prepare your accounts before departure.
This will be the first of a mini two-part series in preparing financial records before a trip. Today, I’ll show you how to go about preparing financially for a vacation, a month in time or less.
Vacation
Avoiding stress when abroad is the easiest way to maximize your enjoyment. I’ve seen people absolutely hate their trips abroad because they didn’t prepare beforehand and were stressed and worried the entire time. Many people spend years of their lives preparing for vacations abroad so do yourself a favor and spend some time prepping your financial life. Being stress-free is especially important when vacationing and site-seeing because the small amount of time you do have is so limited. Here are steps to make sure your financial life is set before heading off on the trip of a lifetime.
- Debit Card
Make sure you have a debit card attached to your bank account at home. This will be the easiest and cheapest way for you to access your money abroad. Before you leave, deposit more than enough money into your checking account for you to access during your trip. This will allow you to avoid one of the worst fees, the overdraft, which can often be $35 or more.Do some research to make sure the country you are visiting uses ATMs. If they do, you should be able to access them with your debit card. Some countries use VISA or Mastercard so make sure you know which one the country you’re visiting prefers. This will save you on unnecessary fees every time you go to the ATM. You’ll be charged a small fee for currency exchange, but with the best debit cards you can avoid most of the fees. Some people will vouch for avoiding ATMs and instead exchanging a large amount of money pre-departure. I believe the ease of the ATM and not having to carry thousands of dollars in cash on you is worth the small fee.
The language barrier can be an issue with ATMs in foreign countries. The bigger cities will often have an English button, but my local ATM (small, rural setting) is only in Japanese. If you don’t know the language, carry a small dictionary or translation book with you. These will list words like “withdraw” or “deposit” that you will need to know.
***My debit card for international travel suggestion: Schwab Bank High Yield Investor Checking – voted Best Checking Account by Kiplinger in December of ’08. Has some of the lowest foreign transaction fees and actually pays interest. - Credit Cards
Some people never travel internationally with credit cards because they don’t want to tempt themselves with access to large amounts of money. I would never travel without one, two, or even three. Here’s why. You may have enough money in your checking account to cover any large expenses – car accident, friend thrown in jail, accidentally knock over an original Dali – but the minute you liquefy this account you’re in trouble. You’ll have to figure out how to get money wired to you by a friend or parent, and in a foreign country you are not familiar with, this can be a very difficult task.For this reason, when I travel I only keep credit cards on me in case of large emergencies. They give me access to a large amount of money in case a once-in-a-lifetime incident occurs. I will still have access to my planned cash, through my debit card, and I can continue on the trip and worry about the incident when I return home.
On a more positive note, there are some awesome credit cards out there for international travel. Since you will be spending more than usual, it’s a good idea to use a card with some good rewards. However, pay attention to the foreign transaction fees. Some cards will charge up to 3% per transaction and this can cost you hundreds of dollars over just a couple of weeks if you’re not careful. Jim at Bargaineering has a great post that highlights the foreign transaction rates of different credit cards. You can read it here.
I mentioned that I would travel with up to three credit cards. You have to prepare for everything when you’re abroad and occasionally a card will get denied for no apparent reason. Don’t rely on just one card to get you through your three weeks in Moscow, plan ahead and have options in case your card is denied.
The convenience of credit cards abroad cannot be beat. If you find a card with 0% fees and you’re responsible with your credit cards, than you can be safe using that to fund your entire trip.
***My credit card for international travel suggestion: Schwab Bank Invest First Visa Credit Card – 0% foreign transaction fee, 2% back on purchases
- Link an Account to a Parent
The best part about traveling abroad is the unexpectedness of different situations. Occasionally, these situations can be a burden on your wallet and you’ll find yourself with little or no cash after a night out on the town, or a shopping binge. This should be a last resort, but link your checking account to one of your parents savings accounts back home. In case of an emergency – like you having no money or way to get to the airport in three days – you can have them easily transfer money into your account. This is cheaper and easier than a wire transfer. Just find a local internet cafe and send them a quick e-mail requesting funds to get you home. They won’t be happy about this, but they’ll be glad you’re not stranded on the streets of Thailand having to wash dishes to make money.
- Inform Your Bank Before You Leave
Take fifteen minutes and call your bank and credit card companies before you leave informing them of your trip plans. If you don’t, the minute they see a charge for even $6 in Paris, they’ll shut down your account because they’ll think your card is stolen. Be courteous and give them a call; they’ll ask you when your planning on being away and then they’ll say have a great trip. That’s it. - Exchange 2 Days Worth of Money
This will allow you time to settle into the new country without having to worry about finding an ATM. Before you leave, find one of the bigger banks in your area and exchange money with them. They’ll have access to foreign currency and will offer you the best rate. Do not exchange money at the airport! It’s incredibly convenient, but their rates are horrible and you’ll lose a lot of money.
Congratulations, your bank accounts and credit cards are in order and you’re ready for the time of your life! Enjoy your trip, buy your mom something nice, and come back with some great stories!
Remember, on Friday I’ll show you the steps to preparing financial accounts for moving abroad.
———————————————————
Subscribe 
Follow us on Twitter 
Get email updates
Trackbacks/Pingbacks
[...] Vacation Abroad? – Prepare Your Financial Accounts For Stress-Free Living Part 1 in a series that looks at how you should prepare your bank accounts, money, and credit cards if you’re going to voyage to another country. [...]