Exchange Rates Again! How To Budget Overseas Trips?

[Guest fountainhall]

You know you will be going on holiday in, say, six months time. You know that the world currency markets are going crazy. The US$1 now buys almost ¥94 whereas three months ago it was ¥78. At the start of January, UK£1 got you nearly Bt. 50. Now it’s barely Bt. 45. In August last year, €1 purchased US$1.21. Last month it soared to $1.365 – the highest in more than a year. Now it is back down to around $1.32. The €/Baht swing has been less pronounced, but most of my income comes in US$.

So how do you work out what to do about the money you have saved up for your holiday? Wait till the time comes and hope for the best? Convert now so you lock in your savings/losses? Convert half now and then wait to see what happens?

I usually wait. But this year I took advantage of a 75% offer for 5 nights in a Tokyo hotel in May. That was paid 3 months ago and with the Yen’s sudden appreciation, that discount is about 10% less favourable – but still great value. I then purchased some Yen last month at 90 and hope to get the balance at nearer 95 next month.

In August I have two weeks in northern Europe, all payable in €. Last month I got scared, and locked in by pre-paying 6 of the hotel nights at the 1.35 rate. I will still need at least another €2,000 for the other hotel nights, train tickets, meals etc. I don’t know whether to lock in now, buy some cash soon, or just hope the € will sink more and pray it does not soar.

So how do you plan your cash requirements when you know you'll require considerable overseas expenditure in the medium term?

[Guest abang1961]

The budgeting part is integral to the success of every trip I've made.

The length of the trip, the location and the type of accommodation and activities will dictate the amount I intend to spend.

Of course, the comfort level is also critical.

 

For example, in one of my recent trips to Taiwan, I fixed it at USD 8-0 80 daily.

So for that 15 day trip, the amount of money I set aside was about USD 1200, excluding the airfare.

The return airfare from Singapore was about USD 500.

 

I stayed mostly in youth hostels in the various cities I'd visited.

My logic is that I am going alone and I will spend very little time in bed...

I spend almost every waking hours on the streets - sight-seeing, ogling at guys, trekking and visiting museums.

I left the hostel as early as 8.30 am and returned at about 11 pm.

 

 

For that Christmas trip to Bangkok and its environs, the budget was cast aside as it was a last minute present for myself.

I had a preferential rate at Hilton for many nights before moving to a C- level hotel in Pattaya.

Then again at Pattaya, I was sunning myself mad at Jomtien. - almost 6 hours there on 2 consecutive days.

 

Everyone deserves a break/vacation.

If you have to travel half-way around the globe to reach a destination, then you should not skimp.

Just pamper yourself... you deserve it!

[ceejay]

There's a limit to the degree you can run your private finances (barring big investments like a pension fund) as if you were a business. My main concern is cost control, rather than absolute cost. A few years back, I was planning a long trip to Laos, and the pound was sinking then. I bought a few thousand US dollars to fix a rate which kept the holiday in budget. The fact that the pound improved again before I took the holiday was beside the point - what mattered was that I had guaranteed that the cost was not going to run away from me.

Other than that, what I do is plan conservatively. For example, I shall, if the rate stays at 45 or thereabouts, budget my next stay at around 40 baht = £1.00. Now that I have a Thai bank account I will probably, and sooner rather than later, transfer enough funds for a 6-month stay into baht. That may or may not be the best rate available to me between now and November, but it will be one I can live with. Loss of interest is irrelevant. UK rates are so low at the moment you might as well keep your money in a sock under the bed.