How to manage your money while on the road

You spend a lot of time saving up for your trip and money is what we all need to travel. The last thing you want is to find yourself in a situation where you’ve lost your cash or had your cards stolen and your account raided at an ATM. Manage your money well while travelling and you can stay on the road for longer.

How you spend your money is entirely up to you. I’m here to help with a few ideas on how to make the most of what you’ve got, and how to keep it safe and easily accessible when on the move.

Cash or card?

In the developed world, we almost exclusively manage our spending money through credit or debit cards, cashless payment apps and electronic payments. Travel destinations to larger cities and towns often offer those options. However, cash still reigns in large parts of the world, especially in rural areas and smaller towns. How can you travel while still having easy access to your money and keep it safe while on the road?

• Use a credit card for shorter trips. If you are going on a short holiday and cards are widely accepted at your destination, this is your best bet. You also won’t have to worry about making a monthly payment while abroad. Plus, you can check and query any suspect transactions if necessary once you’re home.
• Get a card that earns you points for more travel or hotel stays. If you’re using a credit card, look for one that helps you earn points for travel and hotel rooms. There are plenty on the market – and if you live in the USA, you’re in luck: there are lots of competitive options. You can earn points on almost anything to use on future flights, hotel bookings or car rental.  
• Keep an eye on your card at all times. In the UK we are told never to leave our card out of our sight. In the USA it’s often taken away in a restaurant and charged behind the bar or counter. If that’s the case, follow your card. It may not happen often, but cards are cloned. You don’t want to risk being without one on the other side of the world.
• Let your bank know you’re travelling. Not all card providers need to know anymore and with some you can do it online. If you do need to advise them you’ll be travelling extensively, call them before you leave.
• Always have some cash on you. Even if you are planning to use a credit card, always carry some cash in the local currency. It’s particularly useful for small purchases and tips. It’s also necessary if cash is more prevalent where you’re going. Getting some in advance of arriving can save you the hassle of finding an ATM straightaway. If you’re flying in, there are usually plenty of ATMs at the airport.
• Ask for smaller bills. Smaller bills are much more popular. You may find that shops and restaurants don’t accept larger bills because they don’t have change. Ask to change any larger bills into smaller ones at your accommodation or at a local bank.
• Bills must be in good condition. Local bills may be tattered but if you are in a country that uses US dollars (such as Ecuador or Cambodia), they will only accept bills in near-pristine condition. This is because they can’t walk into a bank and replace them like we can at home, so they have to make do with what they have. If you are taking some from home, make sure they are in good condition. You can refuse to accept bills that are torn or defaced if anyone is trying to pass them off knowing they can’t use them. If you accept it, you’re stuck with a useless bill.

Keeping your cash and cards safe

It doesn’t matter whether you’re staying in a luxury hotel or a local hostel, you want to keep your money safe. Avoid carrying too much cash. Instead, take what you need for the day before you head out. You can always cover larger purchases with a card if they come up unexpectedly – like a souvenir you can’t walk away from or a treat in a fancy restaurant.  

• Use lockers and safes. Most accommodation options will have a locker or a safe in your room or on site. Where they do, use them! Take only the cash you need for the day and leave the rest behind, including your backup stash (see below). It’s also a good idea to carry a small padlock with you in case you need it for a hostel locker.
• Split your money while on the move. This is especially important on travel days and when there is no locker option. Keep your money and cards in various places. Split them across your bags, but make sure that they are with you at all times and not ones you’re putting in a hold. Keep some on you, either in a money belt, a wallet or in your clothing. Socks and bras are excellent places to hide money.  
• Don’t flash your cash. Keep small bills if you can so that you’re not flashing around large amounts of money. Figure out the local currency exchange in advance or in the privacy of your room. Don’t do it when you’re out and it’s time to pay. You risk attracting attention and getting robbed.

Exchange rates and how to get the best one

Around the world, exchange rates are a way for people to make money off tourists. In an ideal world you will avoid them, but that’s not always possible. When you do need to use a cash exchange bureau, do your homework so you know what the going rate is to better manage your money. I recommend using an app such as XE Currency Converter. One useful tip: when an exchange place advertises “no commission” it often means an unfavourable exchange rate.

• Use ATMs. Ideally, you’ll have a travel or cash card that allows you to make ATM withdrawals without extortionate fees. While you may have to pay a one-off fee for each withdrawal, taking out the maximum and keeping it in a locker or safe can keep costs down.
• Avoid exchange booths. Small exchange booths, often found around shopping malls or markets, typically offer the worst rates around. Avoid, avoid, avoid!
• Have some local cash before you arrive. The ATMs may not be working at the airport. Or if you arrive late at night they may be out of cash. Where it’s available, it’s also cheaper to get foreign currency before you leave home. It’ll be easier to shop around for a better rate too.

Have a backup plan

It’s always good to have other solutions in your back pocket, should you need to use them. These are mine:

• Carry a few US dollars, British pounds or euros. You don’t need much, but they are hard currencies and accepted everywhere. (Note: one exception is that it costs a lot more to exchange US dollars in Cuba.) If you find that you need to dip into your secret stash, you’ll be able to get your hands on some local currency if you need it urgently.
• An additional debit/credit card. Whether you choose to use your own card or a travel cash card, carrying at least one other could be a lifesaver if you lose your main card. Remember to keep it separate and ideally locked away. Alternatively, keep it in a separate bag when travelling. That way, if you lose one or have a bag stolen, the other will be safe.  
• Option to have money wired to you. As a last resort, plan ahead and ask a family member or friend to be ready to wire you money in an emergency. This may not be the cheapest option, but if you have no access to your bank account or cards for any reason, it’s one that gets money to you quickly. Western Union and Xoom are two options for this and can help get you out of a jam pretty fast.

However you choose to get, manage and spend your money at your destination, shop around for the best deal and keep your cash and cards safe. Looking for tips on how to stay safe while travelling? Check out my 7 travel tips to help you stay safe on the road.