Managing your money well on holiday

Friday 02nd Jun, 2023


Perhaps you are looking forward to a trip overseas this summer?  Maybe a staycation closer to home, camping trip or city break is more your thing.

Whatever you have in mind, it’s important to organise your holiday finances just as thoroughly as you plan which clothes to pack and where to stay.  And with inflation still high, some forward planning can help to keep the cost down as well as protect you from theft and scams.


Set a realistic budget

We all want to enjoy ourselves on holiday and often spend a bit more than usual.  Take time to work out a sensible budget before you go, and stick to it, so that you aren’t left counting the cost for many months afterwards.

Make a list of things you will have to spend money on, such as food, drink, transport, extra sun cream and souvenirs, and then set a top limit for your spending.  Divide your budget by the number of days you’ll be away to give you an idea how much you can afford to spend each day.  Money management apps can help you track your spending using your smartphone.


Check before you go

Find out if your travel insurance includes adequate health cover to save yourself a big medical bill if you need treatment for illness or have an accident. And before taking your car abroad, check with your insurer that your motor insurance is valid for the countries you plan to visit.

If travelling in Europe, be wary of mobile roaming charges.  Since Brexit, some providers have reintroduced them.  Check before you go whether yours has ‘inclusive EU roaming’.  If you have good wi-fi connection, you could use WhatsApp to make free calls.

Consider telling your bank’s customer services in advance if you are going to use your normal debit or credit cards abroad. If they spot unusual spending patterns they may try to contact you to check the transactions are genuine, or block your cards to protect your account. Only take cards that you intend to use on holiday. Leave others in a secure place at home.  Check whether cashpoints are widely available at your destination and whether your hotel or rental car agency accepts credit cards.

You can get helpful advice about visiting over 200 different countries, including the latest information on coronavirus, safety and security, entry requirements and travel warnings from the Government website  Simply enter the country you plan to visit.


Sort your cards and currency

Nowadays most people opt to use a plastic card for major spending abroad, as it’s quick and convenient, and avoids carrying large amounts of currency.  But it pays to choose your plastic carefully.  Some of the newer digital banks have more travel-friendly debit cards than established banks, that don’t charge transaction fees for spending abroad, while some don’t charge for foreign cash withdrawals within certain limits.  The MoneySavingExpert has an online guide to top-pick travel cards:

Alternatively, take a multi-currency prepaid travel card. These are cards that you load money onto and use like a chip-and-pin card. As they aren’t linked to your bank, you can’t spend more than you have – helping you to stay within budget and limiting how much can be lost or stolen. There are no credit checks and your exchange rate is ‘locked in’ before you travel. Check different cards for monthly fees and ATM-withdrawal charges.

You’ll still need a small amount of foreign currency to pay for items like taxis, food and service tips and when cards aren’t accepted.  Find the best currency exchange rates and buy online before you go. Some specialist providers deliver money to your home or to a ‘click and collect’ store.  The MSE exchange rate tool will help you find the best place to get holiday currency wherever you live. Just put in how much you need, where you are going and your postcode.  Don’t buy foreign currency at the airport.  It is likely to offer you a much worse exchange rate.

It’s not wise to rely on cash alone as, if it gets stolen, you’re stuck! Keep a moderate amount of currency somewhere secure – maybe some in the hotel safe and some on your person – but take other payment facilities too.


While you are away

When paying with your card, always opt to pay in the local currency, as there is likely to be an extra mark up if you pay in sterling.  Check the terminal to make sure – you should always be able to choose the currency in which you want to pay.

The advantage of using a credit card for purchases is that payments over £100 are covered by consumer protection law if there is a problem, as well as if the card is lost or stolen. But avoid using your credit card to withdraw cash - a fee and interest will be added. 

It’s easy to be tempted by in-store duty-free offers, but remember they are not always cheaper.  Beauty items and cosmetics may offer good deals but alcohol, accessories and electronics are often the same as online, or even more expensive.


Take care of your cards

Losing your cards, or having them stolen, is a huge inconvenience. Even more so when you’re on holiday. Here’s some simple tips to guard against theft:

  • Your card and card details are as valuable to a fraudster as cash. When paying don’t let your card out of your sight and carefully dispose of any receipts or statements with your details on.
  • Memorise your PIN. Never write it down or give it to anyone even if they claim to be from the police or your bank. At most UK cash machines you can change your PIN to something you can easily remember.
  • If driving on holiday, keep handbags and wallets out of sight of sneak thieves – especially in slow moving traffic. Always remove plastic cards and other valuables from parked cars.
  • When wearing light summer clothing it’s harder to conceal wallets. A concealed money belt is an ideal way to carry cards and valuables.


When you return:

After time away, check your bank or card statement carefully for unfamiliar transactions.  If you’ve used your credit card, check for overseas fees and don’t forget to pay off what you’ve spent at the end of the month if you want to avoid interest charges.

Have a great holiday!


This article is for general information only and does not constitute financial, legal, or any other form of advice.


Last updated 2.6.2023.


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