Plan for the worst, hope for the best. Right?
Cash on Hand – This post dives into the topic of cash on hand while traveling. Something that I see come up pretty frequently in our travel and expat groups relates to the requirement to prove financial solvency before being allowed to enter a country. Most often it comes up with “how much cash should I carry with me when I visit xx?” or ‘how serious are they, do they really check?’ kind of question or ‘how do I prove I have $500?’.
Of course, several people will always share that they’ve ‘never been asked, so don’t worry about it. Which is absurd to me on multiple levels, I mean you arrive at your destination and the custom and immigration officer decided you’re the one person they ARE gonna ask, because let’s face it, hope is a lovely sentiment, but it doesn’t pay the bills (or get you out of a sticky situation at when you land in a foreign country).
How much cash do you need when visiting a foreign country?
A lot of countries appear to have a threshold of $500 cash or verifiable bank balance to show solvency which, to me, seems like a pretty low bar to clear. Maybe this is my privilege showing through but if you DON’T have or can’t prove you have $500, should you be traveling to a foreign country?
Truth be told, I haven’t gotten on a plane to go ANYWHERE with less than $300 cash on me in the past 2 decades. Even domestic flights in the US. Why you ask? Anyone recall the millions of stranded travelers on 9/11? It wasn’t just the massive tragedy that had just struck, but if you were trying to get access to your bank on that day, life was proving a little more difficult.
My current standard, for the last 10-ish years, is that I don’t get on a flight without an absolute bare minimum 2,000 calories worth of snacks and $1,000 in assorted bills in my possession, including at least a handful of local currency if we’re headed overseas. Doesn’t matter if I’m flying 50 minutes to Portland, 3 hours to Las Vegas or overnight to Auckland. Because shit happens and not only is it far more likely to happen when you’re unprepared, it’s far more stressful when you’re unprepared.
Plan for the worst, hope for the best. Right? When I am traveling I assume that at least one, and probably more, things will go wrong along the way – canceled, diverted or delayed flights and trains. Power outage shuts down the ATM’s or credit card processors. Complete shutdown of the transportation grid. A middle of the night arrival at an airport where everything is closed and it’s 7 hours until the next flight out. I have enough snacks to survive at least overnight if I’m stranded and I have enough cash that if I need a hotel room or a rental car I can make it happen.
You’ll hear this from me from time to time – HOPE is not a reliable strategy. Make a real plan for the ‘what if’ scenarios
How Much Cash Should You Travel With?
That’s the million-dollar question isn’t (well, maybe not a million, but definitely important) how much cash should you actually carry while traveling? Truth is, there’s no magic answer that fits everyone. It depends on your travel style, comfort level, and the destinations on your itinerary.
Here’s how I look at it: I’m a “better safe than sorry” kind of traveler. Sure, plastic fantastic is amazing, but what if the ATMs are down or your card gets flagged for suspicious activity (it’s happened to us!)? That’s why I always have a buffer of at least $1,000 in various denominations on hand. It’s my peace-of-mind stash for unexpected situations – think a canceled flight needing a last-minute rebooking, or a charming little local market that only accepts cash (this has happened on more than one occasion!)
Speaking of which, when we talk about cash on hand for travel, we’re not limited to US dollars. Depending on your destination, you might need Euros for a European adventure, Yen for exploring Japan, or Pesos for indulging in delicious Mexican street food. Knowledge is power, especially when it comes to currency exchange. Before you jet off, research the local currency of your destination country. Understanding the exchange rate will help you budget effectively and avoid sticker shock at the market.
Now, $1000 might seem like overkill to some of you, and that’s totally fine! Fear not! Here’s a breakdown to help you navigate the decision making process for yourself:
Step 1: Research the Country’s Cash Crush (or Disdain)
Research your destinations beforehand. Are they known for credit card acceptance, or is cash king? The more digital-friendly a place is, the less cash you might need to feel comfortable.
Step 2: Planning Your Stay – Cash or Card?
Now, think about what you plan to do while you’re there. Are you staying in a small rural beach town like Puerto Viejo, like we did, where hardly anyone accept credit cards (I mean the card machine is right there, but they want cash, and no one ‘had any change’ so having small denominations was key to not over paying. And then there’s the taxi ride from the train station to our accommodations in Lisbon…. cash only… even though we asked before climbing in, and on the flip side, the food carts we visited in Lisbon ONLY took credit cards.
Research like a pro – check out online forums, restaurant websites, and travel guides to get a feel for the payment situation on the ground. Ultimately, it’s about finding a balance that works for you – enough to navigate the unexpected without feeling like you’re lugging around a fortune.
Step 3: Tipping the Scales – Factoring in Gratuity
Tipping customs vary wildly from country to country. Some places have tipping practically built into the bill, while others rely on a good old-fashioned cash gratuity. Factor this into your calculations – research typical tipping percentages for restaurants, porters, tour guides, and anyone else who might deserve a little extra for stellar service.
Step 4: The Grand Total – With a Buffer (Just in Case!)
Once you’ve tallied up your estimated costs for essentials, activities, and those souvenir splurges, here’s our secret weapon: add 25%! Hear me out – Unexpected situations are part of the travel adventure, and having a little extra cash on hand can be a lifesaver.
Step 5: Call your bank
With your magic number in hand, it’s time to contact your bank and order the foreign currency in your choice of denominations.
Step 6: Keeping Your Moolah Safe when traveling
Alright, so you’ve got your cash in hand, but now what?
Speaking from experience!
- Diversify your stash: Don’t put all your eggs in one basket (or one money belt for that matter). Don’t even think about putting your money in a wallet in your back pocket. Split your cash up and keep it in different locations – a money belt, a hidden pocket, a lockable safe in your hotel room (if available).
- Be discreet: Avoid flashing your wad of cash around like a neon sign reading “Free Money!” When making purchases, pull out only the amount you need.
Pro Tip: Why You Should Always “Reject Conversion” When Using Your Credit Card Overseas
When using your credit card in a foreign country there’s a little prompt on the credit card terminal asking if you want the transaction converted to your home currency, which might seem convenient, but it can actually cost you more money in the hidden fees. Here’s why you should always hit “reject conversion” (or whatever your specific wording might be) when using your credit card abroad:
The Shady World of Dynamic Currency Conversion (DCC):
That currency conversion option you see at the checkout is a service called Dynamic Currency Conversion (DCC). While it seems helpful, it’s essentially the merchant offering to convert the transaction for you. The problem? They typically use an inflated exchange rate and tack on hidden fees, making it more expensive for you.
Trust the Math (and Your Credit Card Company):
On the other hand-your credit card company already has established exchange rates. These rates, while not always the absolute best you’ll find, are usually much more competitive than the ones offered through DCC. By rejecting conversion, you’re letting your credit card company do the math, ensuring you get a fairer exchange rate.
Transparency is Key:
When you reject conversion, the transaction amount will be listed in the local currency on your credit card statement. This might seem confusing at first, but it actually provides transparency. You’ll see the exact amount charged and can easily track your spending against the pre-researched exchange rate.
A Few Exceptions (But Proceed with Caution):
There might be rare situations where DCC seems like a good option, like if the merchant’s terminal displays a terrible exchange rate for your credit card company’s conversion. However, proceed with extreme caution. Always double-check the exchange rate being offered by DCC and compare it to your bank’s rate or a reliable currency converter app.
The Bottom Line:
Rejecting conversion is a simple yet powerful way to save money on your international transactions. Let your credit card company handle the exchange, and enjoy your travels knowing you’re getting a more favorable rate!
Important Note:
It’s important to remember that information changes, so it’s always best to confirm the latest entry requirements with the official government website of the country you are planning to visit or their embassy/consulate in your home country.
So that’s the gospel according to yours truly on the importance of having cash on hand while traveling. Let’s be real, unexpected things happen – from flight cancellations to ATM outages. Sure, you might get lucky and never need it, but is that a gamble you’re willing to take? We say ditch the “hope for the best” mentality and make a solid plan for the “what ifs.” A little preparation can go a long way in keeping your travel adventures stress-free (or at least, less stressful).