The Currency Exchange and Your Pre-Vacation Plans

When is the right time to exchange currency for my vacation?

Money always tops the list of concerns when planning a vacation in another country. An accurate vacation budget can be the difference between a great vacation and a difficult one, especially in today’s fluctuating currency market. One of the main ingredients in a good budget is understanding when and how to exchange currency, so you get the maximum value from each exchange.

Waiting until you arrive in Amsterdam or Rome for a European vacation of a lifetime to exchange money in today’s economy could destroy your budget if the Euro has gotten stronger over the course of a few days. Just a 1450 point difference could cost you an extra $145 plus the exchange fee if you are exchanging U.S. Dollars for Euros at the airport. That could be the difference between having lunch in a quaint Dutch or Italian bistro everyday and eating a Big Mac at the local McDonald’s.

The currency exchange is always changing, so it’s a good idea to exchange small amounts of money at different times while you’re planning the trip. By averaging your exchanges you know exactly what each exchange costs, so you can use exact values in your budget instead of estimates. Averaging offsets any currency surges that could ruin your trip. If you’re planning an extended vacation averaging is especially important; you need more money to cover expenses.

Where should I exchange my money?

Banks seem to be the first place people go when they need to exchange money. Banks do exchange currencies, but they add a fee to each exchange and they may only post one or two rates a day which means you may not get a real time rate. Some people like to use credit cards to exchange money. Credit card companies love to exchange your money; they use their own rate which includes their profit, plus they add a surcharge to every travel purchase, so you never know how much the trip actually costs until you get the statement. Airport exchange merchants may add a hidden fee to the rate and that means you have less money to spend on the trip.

If you use a reliable currency trader you can average your exchanges while planning your vacation and that strategy eliminates hidden fees, surcharges and phony exchange rates.  A professional can help you by giving you the real time rate every time you exchange money, which adds value to every trade.

Other travel ideas

Some countries have a limit on the amount of cash they allow through custom checkpoints. It’s a good idea to know what that limit is, because if you’re caught carrying more than the limit an official can confiscate your money. Cash should be carried in a hidden pocket or a money belt that’s secure and out of sight. Wallets and purses should only have enough cash in them to purchase incidentals. Hotel safes and other security precautions should be used when you arrive at your destination and it’s good to remember that common sense is your best security tool when you use it.

For a step by step guide to fundamental analysis of the currency market please visit ForexTraders.com.  Your ultimate source for currency exchange and forex information.