Getting comfortable with cash when traveling abroad

At TIAA, we're always looking for ways to help take some of the mystery out of managing your money. That's even more important when you’re traveling abroad and trying to manage foreign currency you might not even recognize.

Most of us are used to credit card or digital transactions—and we often expect those transactions to be accepted around the world. But when you're traveling abroad or visiting places where those cards and chips may not translate to cash, it's important to understand the local cash system and how to keep your money safe when traveling. That way you can avoid expensive fees and overspending, and, most importantly, you can take full advantage of an amazing cultural experience while you're there.

When you bring up the topic of foreign currency, the first thing that might come to mind is the exchange rate. While that's important to consider when it comes to saving for and budgeting during your trip, there are several questions you may not have considered that can have just as big an impact (such as, "What's the best way to carry cash while traveling?"). Having the answers to some of these questions will make handling foreign money on your trip a breeze.

"How much cash should I have on me while traveling?"

Chances are, when you touch down at your destination, you won't be carrying any local currency yet. So the first thing you'll want to do is stop at an ATM in the airport.

We recommend always carrying a travel-safe wallet or a travel money belt with enough cash to cover three days' worth of expenses, based on the local cost of food, a place to sleep and a little extra for transportation, if needed. This will give you a chance to get a sense of how much you're spending each day, and it'll give you plenty of time to find an ATM or a bank when you need more money. It also means that you're never carrying too much cash at once, which is always smart.

If your bank charges a fee for withdrawals, or if you're heading off the beaten path where ATMs are a bit harder to stumble upon, you can save yourself some transaction fees by carrying enough cash for 1–2 weeks. However, if you do end up carrying larger amounts, it's a good idea to spread it out among different bags to help keep your money safe while traveling. That way, you don't lose everything if one bag is lost or stolen.

"Is it better to carry small or large denominations?"

If you plan on shopping at local markets or buying from street vendors at your destination (and, let's be honest, you'd be missing out if you don't), make sure you're carrying small bills. Most ATMs and exchange bureaus will give you large notes, and the local markets and restaurants may not be able to give you enough change for your purchase.

If you find yourself in need of some smaller denominations, local banks or jewelry stores always have plenty of cash around, and they're usually more than happy to break your large bills into smaller ones.

"How can I quickly calculate foreign currency conversions on the go?"

This can be tricky depending on the country you're visiting. But we've found that the best approach is to memorize the conversion for three commonly used amounts, like $1, $5 and $10 worth of the local currency.

For example, if you're lucky enough to find yourself in Thailand, $1 equals about 30 Thai Baht, $5 is 150 Thai Baht, $10 is around 300 Thai Baht, etc. 1Unfortunately, not every country will have such a simple conversion, but memorizing a few amounts will help you get a general idea and keep you from potentially spending outside your budget. As a bonus, if you don't have to pull out your phone's calculator in front of a merchant, it improves your odds of negotiating a better price!

An illustrated graphic showing a foreign currency exchange example using USD to Thai Baht

"Why is it so important to get familiar with the physical currency in a foreign country?"

The last thing you want to do—anywhere in the world—is open your purse or wallet to show a stack of bills. The first reason is obvious: it can be a safety issue—knowing how to keep money safe while traveling is important. It can also hurt you in other ways, particularly if you're trying to negotiate the price of something, because the merchant will know you can afford more. The good news is, unlike U.S. dollars, many foreign currencies are multicolored and multi-sized to help you quickly differentiate the notes. If you take the time to become familiar with the feel, color and/or size of local cash and coins, you can quickly pull out the right amount in these situations—which can go a long way toward improving your bargaining power.

An illustrated graphic showing a foreign currency exchange example using USD to Thai Baht

"What should I do with leftover foreign currency when I'm leaving the country?"

Whether your trip is coming to an end, or you're leaving one country to head to another, you may find yourself with some extra cash. First of all, congratulations! That means you did a great job of sticking to your budget.

If you can't find an exchange bureau to swap the old money for the currency you want, a great option is to sell your cash to another traveler you meet along the way. There are many apps out there that will allow people to pay you in your home currency, and they will even do the math for you when it comes to figuring out the day's exchange rates.

Another option that hits home for many of our customers in the not-for-profit community is to donate your leftover foreign currency to a local charity. Even if you can't donate it before you leave, there are programs like UNICEF's Change for Good initiative that partner with international airlines to let passengers donate unused foreign currency during the flight home.

Over the course of your trip, if you keep some of these tips in mind, you'll find you're less worried about how to keep your money safe while traveling, and you can better focus on the exciting adventures in front of you. And remember, if you need some advice for managing your money when you get home, TIAA is always here to help.

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Exchange rates calculated as of April 2018.