A Guide to Travel Money

Disappearing off into the sunset for a gap year or extended backpacking trip may in essence be an idea conjuring up images of easy living and leaving all kinds of cares behind but there are some concerns which can’t be so easily dispensed with ……such as money. No doubt if you’re reading this you’re well on your way to raising the escape funds….you may even have bought your ticket and know where you’re headed. However, deciding what means you will use to access your money from wherever it is held once you’re actually travelling can be a bit of a headache. One thing to bear in mind is that among all the various options there is no such thing as a best and a worst; what may work out the top option in one destination might fall well short in another.

How Much Money is Enough?

There is no one answer to this question. For starters it will heavily depend on where you’re going…a set amount of money in South East Asia for example could last you significantly longer than this same amount in Canada, New Zealand or Australia.

Next up, where will you be staying? If you’re going to couchsurf your way around your accommodation costs will be less than if you opt for a dorm bed in a hostel; this in turn will be less than if you have decided that private rooms are the only way to go. Another factor – what are you planning to do on your gap year? If you want to sign up for every adventure activity going and every tour possible you are going to get through considerably more money than some-one who takes themselves off on cost-nothing hikes or self-guided discovery adventures using local transport instead of tour buses.

There are some excellent online resources which allow you to calculate a rough overall figure based on your destination, how you intend to feed yourself, where you will stay and so forth. Don’t use these figures as gospel but they will give you a starting point at least.

Carrying Cash

There are a few considerations here. Dealing in cash is super easy…there is never any worry about whether it will be accepted as there might be with a card and little effort is needed beyond finding an ATM. The ideal is to be able to take out a little money at a time because that way should you have it stolen the loss isn’t so critical. All great in theory. However, in reality this scenario is often not possible – in some tucked away places such as undeveloped islands and little backwater settlements all over the world – developed or otherwise – the taken-for-granted ATM may not be present at all.

The other major consideration here is the charges you’ll incur every time you make a withdrawal. This not only depends on who you bank with back home but also any charges incurred from the local machine you’re using. Withdrawing £100 can easily cost you £5 in fees or even more – charges which very quickly rack up with regular withdrawals. That’s money which could be spent on having fun.

No-one can tell you what is right or wrong here. You will need to weigh up any safety/security issues associated with carrying wads of cash – obviously higher risk in some places – against the costs of withdrawal frequency or cash withdrawal difficulties and decide which way to go. The bottom line – it is a good idea to always have at least a small stash of cash stowed away in case of emergencies and should you be forced to carry a larger amount spread it around a bit among your belongings. And never stash it all in your backpack if this is going to be out of your sight such as in the luggage hold of a bus for example. A good way of carrying small amounts of cash around with you is to store it in an under clothes money belt, so it remains hidden and reduces the chance of thieves getting their hands on it!

Cards in General

The general advice here is don’t put all your eggs in one basket or, in other words, don’t take just one card. Back-ups are always sensible in case yours is stolen. Replacements are usually possible but can be a lot of hassle and a lot of hanging around for extended periods in one place to receive them. The minimum to consider would be one debit card and one credit card.
Check whatever cards you are planning to take with you won’t expire while you are away and always inform your bank/financial provider of your travel plans so they don’t block any card’s use for unusual activity once you start using it in Vietnam for example.

Debit Cards

As already discussed, be aware that ATM withdrawals can incur all sorts of costs including handling fees, foreign currency conversions and more with rates varying wildly between providers so ask your bank about this before you depart. Additionally, you can check out the money advice websites which name-and-shame the worst banks for high fees associated with using your card abroad.

In some cases it may be worth your while to sign up for the type of account which allows fee-free ATM withdrawals. This may attract a monthly fee but could easily still work out cheaper in the long run. Alternatively, if you don’t mind the hassle, switch your bank account entirely to one which won’t rob you blind every time you use your debit card for cash withdrawals or paying for goods abroad. Also know that although you may simply hand over your debit card to pay for all kinds of things in the UK this isn’t always possible in other countries where there are limited or even no facilities at all for plastic payments.

Credit Cards

Even if you have no intention of using a credit card they make great back-ups in case of an emergency. You can even pre-load them with some credit so as such they are a kind of extra debit card. As with debit cards familiarise yourself with what fees will be incurred should you use your credit card abroad especially with reference to cash advances which can have scarily astronomical fees associated with them.

Travellers Cheques

Once upon a time travellers cheques were the only way to go but times change and these days travellers cheques are often the least accepted or convenient of all payment methods. However, have a think before you completely dismiss them out of hand because they are without doubt THE safest way to go and many banks all over the world, as well as some shops and restaurants will still exchange them. It really depends where you’re headed.

Should travellers cheques be stolen you can have them cancelled immediately and then refunded so you lose nothing. Also, because you buy them in advance it is a good way of budgeting. If you do decide to go down this route check what the situation is in your destination so you don’t find yourself loaded with what is essentially a few useless pieces of paper and no other means of getting money.

Prepaid Currency Cards

The newest of all the travel money options, this type of card is another plastic option which is used exactly the same as a debit card to pay for goods or take cash out of an ATM. They are typically available in single or multiple currencies. The difference is you pre-load it with money and can only take/use/withdraw what you’ve got making it a great way to keep track of your spend. When it runs out of money you can top it up again either online or over the phone.

If you pre-load it with a chosen currency such as New Zealand or Australian dollars, the exchange rate is set at the moment of pre-load and isn’t recalculated each time you use it (which may be to your advantage or disadvantage). If you pre-load the card with your home currency, exchange rates are calculated at the point of use and can fluctuate.

Currency cards swing wildly between being a great deal or total rip-off depending on the issuer and some really careful reading of small-print might be required here. Many are free to buy and many state there is no ATM withdrawal fee which at first glance looks to give them a no-brainer advantage over debit and credit cards. However, look a little closer and there is sometimes a world of fees attached to these cards – some so random they may as well be entitled ‘because it’s a Tuesday’ charge.

Changing Currency Abroad

There may be times when you’ll find yourself in need of changing currency for a variety of reasons……perhaps you’ve just crossed an international border or you’ve found a stash of sterling you didn’t know you had (lucky you). Typically speaking dedicated bureau de changes and the bank will offer you a better rate than the guy on the street at the border and typically speaking the worst exchange rates are almost always at airports. But each of these examples may actually be otherwise in your destination.

Personally speaking, my time is rather more precious to me than anything else so I’d rather exchange for a slightly worse rate which yes, may cost me a couple pounds more but means I don’t waste hours of my precious travel time tramping the streets to find the best deal. Your call, of course.


We have already discussed ATMs to some degree but there are a couple more points which you might like to take in consideration. ATMs need electricity and they need phone signals; they also need to be kept topped up with cash. All of these can fail on a regular basis in some parts of the world so just because your guide book tells you that Back-of-beyondsville has an ATM it won’t necessarily follow you’ll be able to use it.

The First Step

Sometimes it can be impossible to know what works best with travel money until you have actually arrived at your destination. Having a little bit of everything allows you to adjust as you go and have back-ups in emergencies – a debit card, at least one credit card (which remember you don’t have to use) and/or prepaid currency cards. It also makes sense to get in advance a little cash in your destination country’s currency for when you arrive. This will get you through your first few hours or day so you can at least get yourself to your accommodation and feed yourself without having to track down ATMs in a strange place while you are disoriented and jet-lagged. Something you’ll thank yourself for later.