How to Handle Foreign Money When You Travel – Easy Method

Getting to a new country and having to learn how to handle a foreign currency can add stress to your trip. In this video, I give you all sorts of strategies for handling foreign money when you travel, including making the math part quick and easy.

Every country presents a different money figuring challenge, but these practices can be used anywhere.

Every time we change countries, I’ve got to learn a new money system, so you know these methods are tried and true. If you’ve got other suggestions and ideas though, I’d love to hear them. Leave them in the comments.

We also have a nifty video that shows you How to Use a Foreign ATM When You Travel. You should check it out.

Handling Foreign Currency FAQ

How do you manage foreign currency when traveling abroad?

1) Take the same safety precautions you would going to a concert or amusement park. Separate your money into several pockets and when possible put your larger bills in the center of your stack, or in your most secure pocket.

2) When you separate your money, have a separate pocket for small, medium and large bills. This is so you’re not flashing large sums when you’re only spending a small amount. Put your most frequently used, usually your smallest, bills in the most easily accessible pocket.

3) To reduce ATM fees, get an account with a bank that doesn’t charge ATM fees, or even one that reimburses you for other banks’ fees. If you must use a card that will incur fees, pull out the largest amount of cash your daily limit will allow. This will reduce the number of transactions you need to make.

4) Estimate on the high side of your exchange rate (round up) to make math easier and so you’re spending a little less than you thought.

Should you exchange foreign currency before traveling?

Yes. While you might not get the best exchange rate, we recommend having about $100 in local currency when you land, if possible. This will just make your life easier after a long trip. It will give you pocket money for a taxi and lunch, or any immediate needs and you won’t have to be worried about finding an ATM immediately upon landing. Also, if your flight is delayed and you end up landing at an awkward hour you won’t end up stuck at a dodgy ATM in the middle of the night.

Where do you exchange currency when traveling?

If you have a no-fee ATM option, that’s the easiest way to get local money when you’re in a foreign country. Even if you have to pay a fee, this is the most convenient way to do your currency exchange in most cases. Be sure to withdraw the maximum amount to reduce the number of transactions you have to make over the duration of your trip. Fewer transactions = fewer fees.

Alternately, you can go into the bank or find a Forex to exchange currency. There’s a balance between finding the best rate and spending your day on this quest. Honestly, as long as it’s not an obvious rip-off, convenience often wins in this case.

Exchanging your first $100 or so can also be done at the airport – usually.

Changing money on the street is a last resort but may be reasonable in some countries for various technical reasons that make ATM use difficult.

Video Transcript

Hey Everyone, I’m glad you’re here.

I know when you travel that one of the most intimidating things about arriving in a foreign country is learning a new money system.

I’m going to show you some secrets for learning how to calculate that quickly, as well as give you some strategies for how to manage and handle your money to make your life easier while you travel. So that handling your money while you travel is not a source of stress.

Whether you arrive with the money from the foreign country already in your pocket, having gone to a forex at home, or you get your money in the airport, it’s always good to have some cash when you land. I will always say that. I know you don’t always get the best exchange rate that way, but for the few dollars it makes different, when you land from the airport it’s nice to have $50 or 100 in your pocket so you’re insured an easy arrival.

It means you’ve got the cash to pay for your cab, maybe a lunch, and then some to get your day started until you figure out your banking situation. And by that I mean on the first day or if you arrive late in the day, the next day after you arrive, that you need to go out and find out where the local ATMs that will take your card are, and understand which banks will work for you in and around your hotel or hostel, or wherever you’re staying.

Once you have the foreign currency in your hand you have to figure out a few things.

Some will come with lots of zeros on them. We are currently in Vietnam and you might be shocked to find out that my fancy new hat here cost me a hundred thousand dong (VND), but if you knew the exchange rate, you’d know that that’s actually less than five dollars, US dollars. So understanding your exchange rate is one of the number one things you need to do.

But you also need to learn how the money works. In some countries you will have a small bill like this ten thousand dong bill be physically smaller than a hundred thousand dong bill. Now, when we first started traveling this used to throw me because in the US I would stack my money and I’d always put my small bills on the outside, and a couple of large ones, if I had them, meaning $20 bills, on the inside, just to hide how much I was carrying.

And that doesn’t work when the small money is small and the big money is big. Your stack is going to show exactly how many big bills you have.

And just so you know, this is standard, ‘hey at a concert in a crowded place you know at an amusement park’, this was my standard strategy for money safety even at home in Los Angeles.

What to do when you have various new bills to deal with, that are different sizes, I actually keep two or three pockets of money when I travel.

I have one pocket that has the very small bills. Here in Vietnam they don’t have coins and so they have some bills though, that are the equivalent of what we would have as coins in the US. And so I keep those in one pocket because these are they’re just like pocket change and it comes in handy to have that all in one pocket. If you have this mixing with your larger bills it’s just going to get annoying.

And then in the case of Vietnam, and I’m using Vietnam as an example because one, I have all the money for it, of course, because we’re here. And then two, it’s as good as any. You’re going to have to take anything I tell you and apply it to the exact situation that you’re in, but the rules apply across the board.

So in the case of the money here, you have ten thousand dollar, 10,000 dong bills, 20,000, 50,000, 100,000, 200,000 and 500,000. It’s easy to feel rich real fast here. You can sit there and say. ‘oh, I’ve got millions of dong’, and if you go out and do a whole bunch of stuff, and buy a whole bunch of things, and you use cash all day, a few million dong can be gone like that.

This is where it’s good to really understand what the money is like.

Oh, yeah, about the pockets.

In my right pocket I tend to keep the money that you use the most often, the 10,000, 20,000 and 50,000 dong bills, up to 100,000, and these will buy things like lunch. They’ll buy a hat, they’ll buy a lot of items here and just make your life easy to have an easy access to.

And then larger bills, the 200,000 and the 500,000, I keep in slightly more secure places, in little pockets folded up, or just not as obvious of pockets.

Partly, that does two things.

One, it just separates it so that it’s a little safer, a little more secure.

And two, it means that when you pull out your everyday money for a one or two or three dollar purchase that you’re not constantly flashing your big money.

Again, these are similar to tactics I use in crowded spaces at home. It’s just I had to adapt to different pockets because the money size was different. So that’s that’s my reasoning there. That’s one of my tips.

One of my other tips is keep your money neat and organized. It may not stay that way all the way through the day. Oh gosh, I know that you get handed money, you shove it in your pocket. But if you keep your money organized, put all your tens together, face them the same way, put your twenties together, face them the same way. Keep them all together and keep them neat and tidy, because then when you go to need to pull things off, you know exactly where it is. You know exactly how much to pull out. You’re not going to be getting confused.

Occasionally, some of these bills are kind of similar in color. Like these aren’t too far off in appearance, and one’s a 10,000 and one’s a 100,000. So having them separated on on layers will really keep me from making a big mistake. So definitely keep your money organized, put it in at least two different pockets. You may not need the third pocket, but you also may end up with a pocket full of change.

So those are some things that will make your life easier just handling the money when you’re in a foreign country.

So what’s the big secret to calculating foreign money in your head without having to be some math expert?

The secret is estimation, and it means you’re a shade less accurate, but you’re a whole lot more convenient.

Let me explain how this works.

As I mentioned, one of the most important things you need to understand is your exchange rate. I’m using US dollars because that’s where I’m from, and so that’s the exchange rate I’m paying attention to. But, of course, this works for whatever exchange rate is between your home money and the foreign money.

So here in Vietnam, the exchange rate is 23,000 dong to one US dollar. What I do is, I round it off to a closer number that’s a lot easier to deal with than 23,000. In this case I choose 20,000.

The reason for that is because I’d rather overestimate what I’m spending, than underestimate what I’m spending.

Let me explain that.

If I say that I’ve spent a 100,000 dong for this hat and I’m imagining the exchange rate in my head to be 20,000 to 1, then I can say, ‘hey, this is a five dollar hat.’ I might know that it’s a little less, but it’s a five dollar hat. And at the end of the day, you know, that’s a better estimation and I’ll tell you why. Because if I did 25,000 as my estimation, which is also a nice round number, but then I’m gonna walk home saying, ‘it’s a four dollar hat’.

Right? So 100,000 divided by 25,000 would equal four. If I do it on the calculator at 23,000, the hat actually cost me about $4.35. I would rather, in my head, say I spent $5, than $4, because then every time I’m spending money I’m actually sort of saving that much money. I come out 65 cents ahead in that transaction. Whereas the other way, if I had used 25,000, I would have come out 35 cents behind.

Now I know we’re just talking pennies here, it’s not a lot of money, but when you start talking larger transactions it makes a much bigger difference. I’d rather overestimate what I’m spending and be a little bit ahead because it makes budgeting much easier. It means I’m less likely to overspend. So that’s the first thing.

The next thing in the actual math. As I just showed you, is you want to choose an easy number to be your one dollar. And then from that you’re going to use that as your anchor.

And then you’re going to have a couple of other numbers that are key.

It may depend on the currency, and the the bills they have, it may be sometimes what numbers work in your brain best.

So let’s start with the idea for me of 20,000 is a one dollar bill here. What do I know from this 20,000 dong bill?

This is one dollar.

Well, it’s easy enough to figure out that 10,000 is about fifty cents.

Okay, so great, that’s easy. And you might think, well, that’s a small amount of money. But to be honest, there are a lot of things around here that cost somewhere between 50 cents and $1, so it’s great knowing that. You know, ‘Hey, I want to buy a soda’, and it’s you know, 10,000 or 15,000. You say. ‘hey, that’s less than a buck’.

There’s a lot of things that fall in that price range around here. So, heck, a coffee averages 15,000. I can go and get a nice fancy iced coffee, beautifully made, very tasty and it doesn’t even cost me a whole 20,000. But knowing your 50 cents never hurts because some places that’s important.

In this case, 50,000 is actually one of the more challenging transactions because then I gotta go two-and-a-half times, and it’s not that I can’t do that in my head, but it’s not as convenient of a number.

But what is easy to remember, in this case, is a 100,000. So if 20,000 is my one dollar bill, five times that is a 100,000. So that’s my five dollar bill. My five dollar bill, my five dollar hat. Easy.

Okay, so as I say, each country is going to have slightly different money systems for you to have to learn, and you have to decide for yourself what’s going to be the best here.

The thing to also remember then is if 20,000 is your one, we’re lucky, they have a 200,000 dong bills, exactly ten times as much. So one times ten, two hundred. So this is my ten dollar bill.

You don’t always have that convenient of a bill. That doesn’t always work out that way, but here it does, so I’m lucky.

The tricky one here, and where numbers start to get more and you might be wanting to pull out the calculator now and again, is when you get to the 500,000. You start getting into bigger numbers and the differences make a bigger difference. The 35 cents that I was talking about before, or the 65 cents I saved, the 35 cents off, those numbers that difference, the bit I’m chopping off by estimating, starts getting bigger and bigger when you get into bigger numbers and bigger purchases.

So that’s something to keep in mind, because while this is a one dollar bill, the 500,000 is technically approximately a $17 bill. So in my head I have it as about a $20, but I also know it’s not a full $20. And so when I start getting into things that are hundred thousand, a million, two million, I’ve got a million and a half here right now, just by those bills.

But when I start getting into things that are in the millions, then I pull out the calculator.

So I’d have 1.5 million divided by, and then I’ll just go ahead and use a real 23,000, and that’s 65 dollars. A million-and-a-half dong is $65 dollars.

So don’t be afraid to pull out the calculator.

The strategies I’m giving you are so you don’t have to pull out the calculator at the drop of every hat, at every little purchase, at every little thought, and eventually it’ll get easy. But also, it depends on where you’re traveling.

I know some people may be using a lot of plastic, a lot of credit card, but you still want to know what you’re spending.

There are places where small businesses only take cash and so you still want to know what you’re spending.

When you start to get the larger numbers don’t hesitate to pull the calculator out and do much more accurate calculations. But for your small estimations do the simplified version. You know, this is one dollar, this is five dollars, this is ten dollars, and then as long as you’re walking around and you’re keeping in mind this is that size bill, it will help you understand what you’re paying.

One other thing you want to remember when you’re traveling. If you’re going home, you’re not a long-term traveler, it’s vacation or business travel, whatever you’re doing is, if you’re not planning on going back to that country anytime soon, do everything you can to exchange your money back before, preferably before you get to the airport.

Although that’s a little tricky because you usually need a little cash around the airport for tips and that, so keep some.

But some countries it is really impossible to exchange their money back after you’ve left the country. Whether it’s just because they’re not popular, or the money exchange won’t take small bills, or in some cases, like Mauritania, you’re not actually no one’s actually allowed legally to trade their money outside of the country.

So unless you’re planning to give away, you know $17 souvenir pieces of paper, make sure you exchange your money before you get to the airport if you can.

And if you need to, go ahead and exchange it at the airport, but get it exchanged before you go home. You know it’s great to save a bunch of little bills to give away as souvenirs, do that all you want, but just be aware some currencies can be very hard to exchange once you get home.

I hope you found these tips helpful for your next trip and that you’ll find handling foreign money much easier to calculate and figure out when you get there.

If you’ve enjoyed this video please drop us a like and consider subscribing.

And hey, I’ve got an opportunity here. I get to throw millions in the air and act like I’m rich.


Bye everyone.

Trina Phillips

I've been traveling to off-the-beaten-path destinations for more than 20 years. Now I'm sharing my continuing adventures in Africa.

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