The trip has been wonderful, you’ve had the experience of a lifetime, made new friends, seen unusual landscapes and learned so much history you feel you could almost teach it at college.
And you still have some money left over… Yay!
If you’ve planned your cultural travel carefully and been somewhat frugal in your shopping, there is going to be some money to spare, especially if you’ve had a little emergency fund that you didn’t use.
Except most of the time you end up losing money when changing this money back to your country’s currency.
How exchange rates work, according to me
I’m no money expert, but where I come from, our currency is far weaker than dollars or Euros (And most other currencies), which means that abroad, things are a lot more expensive for me, than they are for the people who live in the countries I’m visiting.
If it’s the other way around and you go from (for instance) England to visit South America, things will be ridiculously cheaper for you than they are for people in Latin America. So your pounds will go a long way, but this article may not apply to you.
This is due to the exchange rate between currencies. But the exchange rate for buying currency is not the same as it is for selling it.
You buy foreign currency when you’re going to visit another country. You sell currency when you come back from your trip and you need to exchange your leftover foreign money into your country’s currency.
When I buy dollars to take for my trips, I pay a higher rate than they pay me when I come back to sell the leftover dollars.
Let’s see a fictitious example
• Let’s say 1 dollar equals 1.000 pesos (to name any weaker currency).
• If my trip budget is $2.000 dollars, then I’ll have to pay 2.000.000 pesos.
• At the end of my trip let’s say that I have $500 dollars leftover. I go to the currency exchange office to sell them (exchange them back into pesos).
• They pay me 850 pesos per dollar (Instead of the 1000 pesos I’d paid in the first place).
So, I lose money and they win. This is how currency exchange offices make their income.
Depending on the amount of money involved and how much the currency fluctuated during your trip, this can be almost nothing or a lot.
So here’s a little tip to not lose as much (or even gain a little)
If you’re like me, you always have some money leftover, from over budgeting, emergency fund or frugal shopping.
What I do is I separate a bit of it, usually between 50 to 100 dollars (or its equivalent) and save it in my wallet. The rest of it I send to myself from abroad, using an international money transfer office such as Western Union.
Why does this tactic save money?
Because you can withdraw the money back home at the official exchange rate, which is usually higher than the rate they pay you at the currency exchange office.
So, if the exchange rate has gone higher, you can actually make a little money in the process. At least you won’t lose as much.
Of course, the international money transfer office makes a commission and Western Union is one of the most expensive ones, but if you can shop around a little, we found offices like this that charge as little as 5 euros per transaction.
How do I send money to myself?
You just approach an international money transfer office such as Western Union on the last day of your trip, you present your passport, fill out a form, choose the bank at home that will receive the money and that’s it!
Granted, when I’ve done this I’ve always been with somebody, so we send the leftover money to each other. So it would be a good idea for you to confirm if the office in question allows you to send money to yourself. But I’ve heard of people doing it.
Also, be sure to check if there is such an office near the place where you are staying, so that you’re not rushing since this is something to be done the day before your trip back home, when you know you won’t be spending any more money.
The $100 you saved before are in case of an emergency. Again, I am not an expert, this is just something that I’ve heard some people do and has worked for me pretty well.
Have you used this strategy before?
Has it worked for you?
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i love your blog, i have it in my rss reader and always like new things coming up from it.
Thank you for your comment! I look forward to hearing from your travels!