MONEY PLANNING MAKES THE WORLD GO ROUND

Written by: Sue - 30^th November 2016

Dynamic financial and political times remind us that it's important to make a 'money plan' before travel and I consulted some leading foreign exchange experts to glean their advice.

As soon as speculation over the EU Referendum picked up momentum Sterling suffered a drop of almost 18% in one year, having previously been enjoying an upward trend. Seven days after we visited the polling booths on June 23rd, Sterling slumped to a low of 1.16 - a dramatic 11% drop in just a week. A statistic which makes the impact of uncertainty tangible.

In light of recent political milestones, markets could remain volatile and travellers will need to keep a close eye on fluctuations before embarking.

The message from the experts is to plan ahead and consider the following tips to prepare a smoother path.

1  Choose To Pay In The Local Currency

The experts fear that even frequent travellers may be unaware of a procedure known as 'Dynamic Currency Conversion'. Whilst the jargon may sound grandiose, the message is direct: when using your debit or credit card overseas and retailers or hospitality staff ask if you want to pay in Sterling always choose to settle the account in the local currency. An additional charge will be applied for paying in Sterling as opposed to when you opt to pay in the local currency which will be converted at your normal bank rates.

2  Consider - How Do I Stand When It Comes To ATMs?

Freqent travellers know it is not wise to carry wads of cash around and most choose to use credit cards overseas as the most secure option. One thing to note when using a debit or credit card at an ATM is that some providers charge a non-Sterling transaction fee. Investigate ahead, check with your card provider or your organisation's finance team, to ascertain if and what additional charges apply here. If you do require cash from an ATM, don't draw out multiple small amounts and leave yourself open to extra fees, draw out an allowance to serve you over a few days instead.

3  Avoid An Airport Frenzy

You're already at the airport, you've chosen your book for the flight and now you're rushed for time before departure; that's the very moment you remember you are going to need to buy some local currency from the kiosk for personal use on your trip - a familiar scenario to many, I'm sure. Whilst convenient perhaps, the experts warn against this last-minute frenzy, as exchange rates tend to be less favourable than on the high street or online and often commission charges are applied for small value transactions. It's prudent to be better organised and arrive at the airport with your currency already in the wallet.

4 Never Rely Completely On Cards

Whilst cards are safe and offer protection if lost or stolen, don't rely on them as the only mode of payment. It is always wise to carry a small allowance of cash - whether euros, dollars, yen or dong - as some taxis and kiosks overseas may not accept cards. Whilst it may never have happened to you before, there is always the risk that a card may be swallowed up by the machine, lost or stolen - presenting a real and present hassle. A smart precaution is to take a mix of payment options, debit and credit cards with a small amount of cash to call on in an emergency.

If travelling to a more 'exotic' destination it is also worth checking ahead with your travel management company as to what currency they recommend you should carry. Did you know that some destinations impose import and export restrictions on their currency? They may regulate the amount travellers can take with them or veto you entering the country carrying their currency as is the case when travelling to India.

5  Consult A Currency Conversion App

Whilst planning a trip and budgeting for the necessary expenses, it is worth downloading a live currency conversion app which will show both current and historic exchange rates. Will this year's business trip to Baltimore (or San Francisco if you're lucky) be more expensive than this time last year and by what percentage? Such an app can be a great help in pinning down if rate changes will have much of a cost impact and is a valuable planning tool. On the Travel Info page of the Calder website - a one-stop-shop of handy travel facts from health and weather to transport and currency - you will find Xe which is a free app for just this purpose.

I'm sure your own employer or travel management partner will furnish you with precautionary advice, but each traveller can plan ahead and formulate their personal 'money strategy'. To invest a little time and effort in researching rates and costs seems to be the key. Find out how much your travel staples - meals, drinks, snacks and taxi fares - are likely to cost at your destination. One tip is to keep an eye on helpful travel costs barometer and location comparison pieces in the media.

Whilst the impact of currency fluctuations on the cost of hotels or airline travel may be delayed and convoluted to ascertain as yet, there is a real and immediate impact on day-to-day budgeting for business travellers.