When you are travelling to a new country, it can be easy to miscalculate your expenses due to the variation in purchasing price parity between countries. For example, a bottle of mineral water may cost Rs. 20 in India, it could cost you anywhere between $1 (Rs. 66) and $2 (Rs. 130) in the U.S. You need to keep an eye on every expense you incur. If necessary, keep extra funds handy to manage unforeseen expenditure and let your budget decide the length of your vacation.
Additional Reading: Travel Often? Here Are Tips To Budget
Arrange funds before taking a trip
Prior to your trip, we also recommend arranging funds well in advance since you could find your last few days busy with shopping and packing. You can save a little bit every month through Recurring or Savings Deposits. Once your savings add up to match your estimated budget, you can go ahead and start packing your bags.
If you are short on funds we suggest borrowing from friends or family. Borrowing through high-interest loan products such as Personal Loans or indulging in Credit Cards is a strict no-no. However, you could take a loan against your Fixed Deposit or Gold jewellery and pay back the same after returning from your trip.
Additional Reading: Benefits Of Investing In A Savings Scheme
Identify your mode of payment
Assess your spending habits and identify the mode of payment you find convenient for all types of transactions. We believe you should carry money in the form of liquid cash, International Debit Cards, International Credit Cards, Prepaid Travel Cards and Travellers Cheques. Split your money in various compartments for the purpose of safety and carry minimal cash on yourself to avoid risk of theft. While you select your mode of payment, consider factors such as currency conversion charges, usage charges, top-up fees, security, ease of use, and the ceiling limit in that mode.
If you are familiar with the foreign currency conversion procedures, you probably know that you will have to bear extra conversion fees at the time of conversion.
If you are carrying an International Debit or Credit Card, ensure that they can be used in the country you are visiting. Also, inform the card company that there could be unfamiliar transactions since you are travelling abroad and request them to not block the card unless specifically intimated by you.
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Choose the right Insurance cover
As we all know, Insurance could be a life saver in times of trouble. Ensure that you get a relevant Life Insurance Policy, which holds good for international travel.
Often, many domestic Health Insurance companies do not provide medical cover in foreign countries. So, either discuss with your existing Health Insurance provider for an additional cover, or take a separate overseas Insurance Policy. Don’t forget to check the list of risks it covers as well as the hospitals and hospitalization facilities it includes.
The other important Insurance cover you should consider purchasing is a Card Protection Plan (CPP). It provides you with emergency hotel protection, travel assistance and cash in advance in case you lose your Credit or Debit Card while travelling abroad. It not only provides you with financial assistance while you are travelling, but also helps you with the recovery of important documents. However, do take note of the inclusions and exclusions on the list of cases it covers.
Additional Reading: Travel Insurance Plans For Globetrotters
If you plan your foreign trip well in advance and arrange your money smartly, you can enjoy your trip undisturbed.