There are many perks with living and working abroad, and especially in 2021!
One perk that has really become noticeable, is the fluctuations of exchange rates, due to current world events such as Covid, Brexit, presidential elections, protesters and unfortunately.. even wars.
Some countries have seen an astonishing 10% gain and then a 10% drop in currency value in just a few months. If you are clever and hold multiple currencies, that you can access and spend at any given moment, you can make your Pound, Dollar, Baht, Yuan or even rupee go further.
Knowing which currency to spend in a given time, can save you a lot of money, you just have to be careful about how to achieve the best rates and when to sell. When abroad, knowing what the rate is at all times is an essential part of my remote working and living.
Why is it important to know the exchange rate while travelling abroad?
It’s a good idea to know the exchange rate, so you know whether to pay by cash or card. Being selective could save you a lot of money by the end of the year. Knowing and converting the exchange rate into your native currency can give you a better perspective on value.
I have been living in Southeast Asia for almost 5 years, before I buy anything, I still work out how much things cost in my native currency.
Should I pay by cash or card, using my native currency?
When paying with a card abroad, always make sure you pay in the local currency. If you were to pay for something in Thailand for example and pick “British pound Sterling” It would more than likely convert your money at the worst possible exchange rate.
This is because banks in foreign countries are the ones setting the exchange rates, and sometimes adding fees. This also applies when trying to withdraw money, using a foreign card at a cash point.
In addition to the fee above that, you could be paying. You may also be charged a transaction fee for using your card abroad, especially outside of Europe. This gets billed directly from your bank back home and not everyone is aware of this, so research this before you leave. I found this out the hard way. Some cards and banks are better to use abroad than others.
This is one of the reasons I like to use a credit card instead of current accounts. Many credit cards don’t charge transaction fees abroad. Just remember to clear your balance in full, at the end of each month to prevent paying a huge percentage of interest.
How can I get more for my money?
You can get more for your money, by checking the exchange rate daily. I run a search on Google before buying.
Credit cards and pre-paid debit cards are excellent to use when travelling. These accounts give me a lot of protection. My Monzo cards notify me every time I spend.
Some credit cards such as American Express give points for spending. Points can add up, and be converted into air miles or into money or even Amazon vouchers. Usually, American Express points are worth more when spent on flights.
But beware, not every company accepts credit cards or American Express.
When should I use a certain currency?
When your local currency has dropped and your native currency has gained traction, use native. Vice versa.
You should exchange and spend a certain currency when you notice it’s worth more, compared to the other currencies you hold. I asses currencies regularly, so I can make the most from what I have.
Beware of scammers?
They say if something seems too good to be true, it usually is. Since Covid-19, scammers have been extra busy and have got smarter taking advantage of new technology, praying on those at home.
Scams target people of all backgrounds, ages and income levels. People get caught out because they look like the real thing, scams happen when you’re not expecting it.
Often scammers request for you to make international bank transfers or Bitcoin transfers. You can avoid being scammed following the below tips;
- Check the email address, and make sure it ends with a company you trust. Run the phone number through google and see what it picks up. Scammers will pretend to be whoever they need to be, to get what they want.
- Don’t be rushed or pressured into anything, especially when bank or personal details are being requested.
- If anyone asks for remote access to your computer, keep away!
- Choose passwords that are difficult for others to guess and update them regularly. A strong password should include a mix of upper and lower case letters, numbers and symbols. Don’t use the same password twice and never share your password with others.
- Be wary of unusual payments coming out of your bank account. Recently my bank account was targeted. Every month, small and increasing amounts of money was being deducted under different names similar to big organisations. I rang up the bank and get refunded. The transactions got blocked and investigated.
Should I exchange my money at the airport?
People are keen on exchanging money at the airport, but generally speaking, better rates can be found elsewhere!
Bringing over your native currency to where you are going, is usually the best option.
When bringing over cash, make sure you stick to the limit of what your country allows. Otherwise, you may get money confiscated, you may be fined, or both!
Everything is nearly online, including companies abroad that provide currency exchange services. Google Maps is excellent at finding these services. Once a few locations have been pinpointed, you can click onto their website and study their rates and compare them to other currency exchange shops. When travelling to a new location, I plan out where the local currency exchange shops are.
Can I make money from the exchange rate?
Some people trade currency as a day job, so making money from the exchange rate is very possible!. Going by the last year, it’s been proven that currencies can fluctuate up to 21%. This usually happens because of unforeseen circumstances and people selling because they are getting nervous about what is happening in the world.
These tips will help you save a bob or two and make the most of the money you have. As always, do your own research before travelling. Many people think the future of currency is cryptocurrency! So keep an eye on that market as well.