How to stretch your dollar further when on an overseas elective

— 5 min read

The Australian dollar has been hit by a double whammy.

Certainly not a good news for international travelers!

If you’re planning an overseas holiday, you might be gritting your teeth for a budget blowout.

So when should you start putting money aside, and where’s the best place to put it?

While you can’t change the exchange rate, you can minimise costs in other ways. With a little planning and some free resources, you can stretch your budget further without missing out on any must-do experiences.

Early bird gets the deal

Book early to get cheaper rates on transport and accommodation. Train fares in Europe, for example, can be significantly cheaper if secured more than two weeks early. Airfares are also cheaper when booked in advance – the time to get the best value is between one and four months before you travel.

Credit (and debit) card 101

The world is more plastic friendly than ever, but the cards you use at home might not be the best value for money overseas. If you like the certainty of a locked in exchange rate for Australian dollar, load a pre-paid cash card with foreign currency before you leave.

Alternatively, look for a credit card with no (or low) currency conversion fees, and use it to pay for everything overseas – even ATM withdrawals. Just remember to pay it off before the end of the interest free period to avoid paying interest. You can even load it up with your savings before you leave, and this can be helpful if there’s a low card limit.

Whatever you do, bring a backup source of cash, and let your bank know your travel plans so your card isn’t blocked the first time you use it overseas.

Travel insurance

To safeguard against lost baggage, delays and sky high overseas medical bills, travel insurance is a must. Shop around online – you’ll generally find it much cheaper than the policy offered through a travel agent. Many credit cards also come with basic travel insurance, but check the fine print on what’s covered and how the cover is activated.

If you travel often, consider an annual multi-trip policy. It will work out cheaper than buying on-the-spot insurance for each trip, and you’ll also be covered for any unexpected trips that come up.

Roaming no more

Switch off your global roaming. There’s no need to risk the bill when you can text and call back home using Whatsapp and Skype with an internet connection. Your accommodation should offer free Wi-Fi – you’ll also find it in restaurants, cafes and fast food chains when you’re out and about.

If you want to use data and communicate easily with your travelling companions, consider buying a prepaid SIM card when you arrive (especially if you’re staying in the one country). Just remember to check your phone isn’t network locked before you go.

For more information on planning your elective, take a look at the MJA’s A guide to working abroad.

* The information contained in this site is general and is not intended to serve as advice. DPM Financial Services Group recommends you obtain advice concerning specific matters before making a decision.

Authors

Anthony Pane

CA, B. Comm

Consultant
Melbourne

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Anthony started at DPM as a Tax Consultant in 2015. He looks after doctors at various stages of their career with a customer-centric approach. His clients value his ability to guide them through their issues and provide them with personalised solutions for their taxation, structuring and salary packaging needs.