Is exchange rate travel the way to save money?

The cost of living crisis has put more emphasis on how far our money goes. If you’re a savvy traveller, you will prioritise travelling to destinations where you will get more for your money.

So, is exchange rate travel the best way to save money and see the world? Let’s have a look.

What is exchange rate travel?

This strategy is travelling to destinations that have a favourable exchange rate against your local currency. So the exchange rate is the deciding factor in where you travel. High cost destinations are off the travel list.

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Why it’s important

Let’s face it. Exchange rates affect a traveller’s buying power.

According to studies, approximately 33% of travellers have reported losing money on exchange rates. Exchange rates affect the price we pay for flights, accommodation, travel expenses and spending money.

A strong currency equals more money to spend as you are getting more local currency in exchange.

A weaker currency means less to spend as you are getting less local currency for your money as it is not as strong as the destination’s. This is especially the case if travelling to a place that is US dollar based. The best outcome is to visit destinations where your home currency is strong.

Benefits

There are significant benefits in using exchange rate travel.

Money saving

You will definitely save a lot of money using this strategy. Before your departure, during travel, and upon your return, you’ll save. You will even see a difference in costs when paying with a credit card. You can also travel more.

Travel more

Because you are spending less money in your travel budget, you can afford to do more travelling. More money saved means more travel. You can also stay longer.

Can stay longer

Travel expenses add up when you’re travelling. By travelling to an inexpensive destination, you can afford to stay longer if you choose to do so. Travel expenses such as flights, accommodation, tours and living expenses are considerably lower. And what about improving your financial knowledge?

Improves financial knowledge

By regularly working out exchange rates, you’re improving your financial knowledge. Better financial literacy will help you in your everyday life to manage money. Do you know how to work out exchange rates?

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How to work out exchange rates

Working out exchange rates is easy.

First, find out what the current published exchange rate is in your intended travel destination. Once you know this, calculate against the current rate of your local currency.

For example, $1 Australian dollar (AUD) = $0.65 US dollars (USD). So to work out what the price of something is in AUD, divide the US price $25.00 by 0.65 = AUD $38.46.

By working out what the costs are in your home currency, this helps decide whether the destination you intend to travel to fits your travel budget.

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Downsides

Budget decides destination

If your strategy is to only travel to inexpensive destinations, you’ll unfortunately miss travelling to the more pricey destinations in the world.

Money restrictions

Money may be tighter, restricting your budget and limiting your freedom to splurge.

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So, if you want to use exchange rate travel as your strategy, make sure you travel to places where your currency is stronger against the destination’s currency. You will keep your travel costs down, which is always a good thing.

Be sure to work out your exchange rate and if it is in your favour, book that trip! You may not see the entire world, but there are definitely many places to travel to where your money goes further.

I’ll see you at the airport soon!

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