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How to manage money on your gap year

Heading on a gap year to explore new countries, learn a language, or just take a break?

Before you travel there are obviously a few things you’ll need to prepare and one very important point on your checklist should be currency. Whether you’re lodging in hostels, other people’s homes or in hotels, you’ll need a safe way to carry your foreign currency, without it costing you the world.

Plus you need an easy way to keep an eye on your balance, and get more currency if you need it.

Sounds like quite a bit of a headache, but don’t worry, we’ve got a few tips to help you securely carry your money and manage your spending with ease.

A bank account might not be an easy option

Unless you’re planning to stay in one country for a decent amount of time (such as a year or more) then opening a bank account in a new country might not be hassle-free.

And even if you are heading for an extended stay, it can be surprisingly difficult to set up a local bank account, depending on where you are heading.

The fact that you’re not a permanent resident and don’t have a permanent address can hinder you. It could also take you a while to get set up – so you could end up exploring your new home for a few weeks before you actually have a debit card for spending.

If you do choose to open a local account – make sure you do your homework on money transfers before transferring any money from your UK to your account abroad.

Hidden fees and poor rates

Think twice before you default to using your UK debit or credit card. Your UK bank card can come with costly fees when you’re spending in a foreign currency, and you’re almost certain to get what we’d consider to be a very poor rate.

As with any foreign exchange, compare like for like rates between providers to see how good a rate you are getting. And don’t fall for the old “zero commission” trick either.

Before you use any service, make sure you check all the fees and charges involved. What is their foreign exchange fee? Do they charge a transaction fee or a “processing” fee?

With a FairFX Prepaid Mastercard® you benefit from award-winning exchange rates and transparent, low fees.

Card over cash

Whilst debit and credit cards can be expensive we definitely don’t recommend ditching plastic all together.

No matter where you are in the world, you really shouldn’t be carrying wads of cash around. Cash is easily lost and easily stolen.

Instead of getting a poor rate from your bank though, consider getting a prepaid currency card. These cards usually come with far better exchange rates and lower fees for spending abroad (because that’s what they are made for).

FairFX Currency Cards come with great rates and no hidden fees, plus they allow you to manage your money on the go through our mobile app and website.

Transfer money to your card as and when you need it. And keep an eye on where, when and how much you’re spending so that you don’t burn through your budget.

And if you’re using our linked Family and Friends Cards, you can even get a loved one to top up your card for you.

Share the card, share the love

family and friends diagramIf you’re heading on a gap year adventure and travelling without your parents for the first time, FairFX Cards will help put your parents’ minds at ease.

Get your parents to order a FairFX Card – they can link additional cards to their account which makes it super quick and easy to share money with you, and gives you a secure Mastercard® in your name for spending around the world.

Drop them a message if you’re short or cash and they can move money from their card to yours through a few taps on our app or clicks online.

The main accountholder can link up to 5 additional cards to their account, so Family and Friends Cards allow FairFX cardholders to teach their teenagers how to manage money, split spending money with their partner, or provide a lifeline to loved ones on gap year.

Do your research

Planning ahead with how you’ll manage your money on your gap year means you’ll get more to spend on your adventure and you’ll have a safer way to carry your money.

The foreign currency market is very dynamic and rates often change from one minute to the next. If you’re looking to find the best rate from a foreign exchange supplier, remember to compare rates at the same point in time.

Keep an eye on exchange rates in the weeks and months before you travel and you can effectively choose the best exchange rate for you by buying when the rate is in your favour. Sign up to our Rate Alerts and we’ll even let you know when the pound is having a good day.

Whatever you do, don’t leave buying travel money until the airport. In the last quarter of 2016 airport rates were as much as 26 per cent different from the market rate, which is nothing short of shocking.

 

Find out more about linking additional cards to your prepaid FairFX Card and how you can carry your travel money with ease on your gap year.
FairFX Family and Friends Cards

 

If you haven’t decided where you’re travelling on your gap year yet, you might want to consider which destinations are the best value for money following the pound’s recent poor performance. We’ve put together a list of best value destinations where your pounds will actually go further now than they did 3-5 years ago.

You can also travel further by planning ahead with currency, travel and accommodation. Follow our tips on planning your travels like a pro and your money will go much further…maybe even far enough to tick off another country or two.

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Miles Hobson

Miles Hobson

Miles oversees marketing communications at FairFX. He has a passion for travel and loves to explore new cities on foot to find their hidden gems.

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