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Expat Articles » Handling Your Currency When Moving Abroad


Handling Your Currency When Moving Abroad

Whether your move is temporary, short term or you are making the first steps before your accounts follow you over, there are many things you can do to minimalise the impact to your finances.

Other than travel and housing expenses, which will hopefully be covered by an employer, exchanging or even spending money while abroad can cost more than the listed total. With this is mind, it is better to sort your currencies out prior to making the trip. An option that is often overlooked by travellers is the option to order currencies online. It’s possible to have it delivered to your home, or even have it ready for you to collect, from a store or even your departures terminal. Either way, you’re guaranteed a better deal than is possible when exchanging at the airport. Commission-free‘bargain’rates should also be approached with caution. No commission does not automatically equate to a better deal, as there are likely to be other additional charges.

If you prefer to exchange over the counter, at a post-office, travel agents or elsewhere, be sure to know what charges your bank may enforce if you use a card. You can avoid this by withdrawing cash in advance to complete your exchange with, ruling out any extra charges altogether. Selecting your time and place of exchange wisely is also important, as this can be the difference between getting a bargain or overpaying. A post office local to a smaller townwill often exchange at a worse rate than the same company’s town centre branch. It can also be worthwhile investigating your building society or bank, as they sometimesprovide a better rate for existing account holders.

On the subject of banks, be sure to inform your bank of your plans before you leave the country. While in itself this won’t save you money, it could prevent your accounts from being mistakenly frozen due to a lack of communication. The popularity of online banking has increased the possibility for fraud transactions, so you can understand why a bank would make inquiries into a payment madein a different country to the accountholder’s norm. The last thing anyone wants in an emergency, or a restaurant for that matter, is a conversation with their bank about their ‘rogue transaction’.

When making an exchange, before, after or during your time as an expat, it’s better to swap your money in bulk, ratherthan being forced to exchange funds multiple times. A larger transaction can even see the rate shift in your favour so it’s worth serious consideration. Simultaneously, when you reach your destination, every card transaction will also come with additional fees. These charges add to the money that is lost with each currency conversion, and they soon add up. It’s better to have an excess, opposed to paying more to top up a more reserved estimation.

Once you are settled in your new climate, it can be easy to become a little too relaxed with your financial habits. Unless it is unavoidable, you shouldn’t use your card once you have left the country you call home. Charges for spending on you card, or even cash withdrawals, are common place but are fortunately preventable with some planning. If you do use your card, carelessly or out of necessity, you can expect a foreign currency handling fee, a withdrawal charge and a healthy dose of interest. In execution, this could end up with you paying £220 on a bill that only totalled £200. You now have no reason to blame or moan about unexpected fees; you’ve been warned!

A bit of patience and research could well see you saving money. It’s important toget accurate information before throwing your cash at first opportunity, but planning your finances need not be an ongoing concern during the initial stages of an expat’s career.

For detailed insight into 2013’s foreign exchange market, as well as predictions for the year ahead, read the 2013 FX Overview E-book, published by Axia FX.