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Author: Kirsty Lamont | mozo.com.au

First-time traveller? Here's how to be a travel money pro

First time heading abroad and not sure how to handle your money? Whether convenience, security or finding great value is important to you, our How-To guide to spending your hard-earned money overseas is a must-read.
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There’s nothing quite like stepping on board the plane before you take off on your first solo trip overseas. Whether you’re off on a working gap year in Canada or a three month long adventure exploring Europe with friends, heading overseas is basically a rite of passage for many young Australians. 

But while it’s easy to get wrapped up in the excitement of booking flights and activities, there’s something you’ll need to put right at the top of your travel to-do checklist - sorting out your travel money options.

With different cards, cash and travel insurance to consider, knowing which option is right for you can be tough, but getting it right could be the difference between paying hundreds of dollars in overseas fees or enjoying an extra week in Barcelona. So get up to speed with these four travel money options you might need to arrange before you fly.

Pick the right piece of plastic

Who wants to carry bundles of cash around while they’re travelling? Not many, which is why a travel-friendly debit or credit card could be one of the most convenient ways to pay overseas, especially if you’re visiting multiple countries.

Each type of card has its benefits and drawbacks though, so it’s worth comparing features like annual fees, account fees, foreign ATM fees and foreign exchange commision rates before locking one down. After all, the more you’re able to save on fees, the more you’ll have to spend on food and activities!

Another travel money option which could prove a handy addition to your wallet is a multi currency cash passport, also known as a prepaid travel card. Cash passports allow you to load up multiple currencies onto a single card, which could be useful if you’re planning a trip through somewhere like Europe.

Hot Tip: If a cash passport sounds like the right option for your trip, start looking at foreign exchange rates as soon as you can. That way you’ll be ready to pounce on a great currency deal if the Australian dollar jumps higher.

Take out budget friendly travel insurance

Your first solo trip overseas should be exciting and hassle free, so the last thing you’ll want is to have to worry about your belongings, your travel plans or your health while travelling. That’s why taking out travel insurance before you leave could give you the peace of mind that even if something does go wrong, you’ll be covered.

Not all travel insurance policies are alike though, with the cost of a policy likely to vary depending on the length of your trip, your age and the countries you’re visiting. But don’t stress, because depending on the level of cover you want, you’ll likely be able to grab travel insurance for considerably less than the cost of your flights.

Hot Tip: Lock in a travel insurance policy as soon as you’ve booked your flights. That way you’ll be able to take advantage of cancellation cover if you need to cancel your trip for unforeseeable reasons.

Set up with an international money transfer

If you’ve already organised a home base for a working year away, chances are you’ll need some money to help you pay for accomodation, furniture and food costs. But maxing out your credit card to pay for these probably isn’t the way you want to start off life abroad, which is why an international money transfer could be a cost-effective solution to transferring funds from Australia to your new home away from home.

Aside from setup costs, an international money transfer could also prove useful if you’re in need of a cash injection from your parents, or once you’ve reached the end of your stay and need a way to send your hard earned funds back home.

Hot Tip: Many providers have minimum and maximum transfer limits you’ll need to stick to, so make sure you do your research on these as well as any fees you’ll need to pay in order to make a transfer.

Avoid a currency conversion rip-off

While you’ll be able to use a credit or debit card for the majority of your purchases overseas, sometimes having foreign cash on hand is just a necessity, especially for places like markets and cafes.

But if you’re planning on travelling with some hard currency, you won’t want to lose out before you’ve even stepped foot on the plane. Currency converters at the airport can be notorious for their poor value, so if you’re organised, you’re better off converting your Australian dollars into foreign currency through a bank or boutique foreign exchange service.

Tip: If you are going to take some cash on your trip, double check your travel insurance policy, because you may be covered in the event that it’s stolen.

Kirsty Lamont is a Director at financial comparison website mozo.com.au. She is passionate about helping Australians get a better money deal and helping them make better, more informed choices.