Budgeting, debit cards, currency cards and international money transfers
A working holiday is a very affordable way to explore and enjoy a new country and culture. A little planning before you go will help you understand the costs that are involved and to know where you can save money.
Money in 15 seconds
- Draw up a budget to know what you can afford
- Some countries ask for evidence of your savings as part of the visa process
- Can friends or family help to pay for insurance or flights?
- Take some local currency to cover your arrival
- Don’t exchange currency at the airport
- A pre-paid currency card is a useful way to access money abroad
- Open a local account for ease of access and salary payments
- Transfer large sums of money from home using a foreign exchange specialist, banks are expensive
- Keep track of your money and plan ahead if you are running out.
How to access your money
Take enough cash for small purchases during the outward journey – at the airport, in transit and for your initial arrival period. Don’t take more cash than you are comfortable carrying. If you have to change flights on route to your final destination, you may want to buy some food or a drink while waiting for the connection. In most cases you’ll need to use the local currency. All airports will accept major debit and credit cards (Visa, MasterCard, American Express). But be aware of the fees and charges that are applied for each transaction.
Avoid currency exchange at the airport (unless ordered in advance) as the rate will be poor. Use this helpful website to see where the best exchange rates are and arrange your currency before you travel:
Debit and credit cards
Lots of people will rely on their debit or credit cards when they travel. You can’t argue with the convenience; however, its worth checking out the cost. Generally, the exchange rates are not great and many banks will levy extra charges for using cards overseas. Added to this are any local fees charged by the ATM company. (Check specific costs with your bank before you travel.)
To reduce costs you could use the ATM less often. In which case you’ll need to withdraw more at each visit. But then you’ll have the worry of carrying large sums of cash which may make you uncomfortable. See Currency Cards below.
A credit card can be useful, particularly for large expenses and for using as a security deposit (for car-hire or at check-in to a hotel). Before you leave home make sure you can pay your monthly credit card bills online, alternatively arrange for someone at home to make payments on your behalf. Avoid drawing cash on a credit card as the interest charges are extremely high. Check with your card issuer for more details about international costs.
Pre-paid currency cards
An increasing number of people are using a pre-paid currency card when they go travelling. They work on a pay-as-you go basis and are the modern equivalent of travellers cheques. Top-up your cash card and then use it like a debit card during your trip. When funds get low, you top up the card with more money. There are some key advantages:
- They will help you to keep track of your spending
- Anyone can top-up the card for you
- Generally you manage the card simply online or using your mobile phone
- If lost/stolen you can quickly block the card
- The fees are (generally) less expensive than using a regular credit/debit card abroad
- The exchange rates are (generally) more competitive than when using a regular credit/debit card.
There are many different types of cards available with subtle differences; check that you are getting the one that best suits your travel plans. You can read more about currency cards on our dedicate Currency Card page.
Note: once you are settled in a country it will be better to access money through a local bank account (see below). However, in this case your currency card can be used as a back-up just in case your funds run low, for side trips to other countries and for your trip home.
These have largely been replaced by the pre-paid currency card. However, they are still useful if you are going to less developed countries where ATMs are harder to find.
Don’t pay excessive bank fees to transfer money; Tranzfer is a simple to use system with low fees and excellent rates of exchange
Open a local account
Once you have arrived in your working holiday destination you should open a local bank account. Most major national banks will be able to do this for you over the counter. Its an easy process; make sure you have two forms of ID (one will be your passport) and some money to deposit. You are then in a position to transfer some money from home in to the local account.
There are a number of benefits of having a local bank account:
- You can transfer money from home in one or two large transactions to keep fees to a minimum (see below Transferring Money)
- More affordable banking – bank fees in-country will be lower than using an overseas debit/credit
- Convenience for your employers – in most cases your employer will only pay your salary to a local bank account
- You’ll be issued with a local debit card, so no international fees
Save when you transfer your money overseas
Most people transfer money using their personal UK bank account for convenience. However, this is unnecessarily expensive (excessive bank fees charged by the sending and receiving banks as well as poor exchange rates). You can save significantly using a specialist foreign exchange company. In most cases it is simple to arrange and you can make fantastic savings.
The Working Holiday Store partners with OFX who offer the online currency transfer service. It is easy to use (for you and your family) and can save you up to £50 or more depending on how much you transfer. Once you’ve set up your account subsequent transfers will take just a couple of clicks. If you are relying on financial help from friends or family this could be another way to show them that you’ve given lots of thought to planning your trip. Any visitor to the Working Holiday Store website can open account using the button below.
Make a budget
Make sure you can afford a working holiday. The upfront costs can seem high, but remember that you’re planning to be away for a long time, you’ll earn while you are away and don’t forget to factor in what you’d normally spend for the same time staying at home.
A realistic goal is to earn enough while working abroad to cover your daily living costs and to save some money toward local travel. It would be unlikely (but not impossible) to earn enough to offset initial overheads or have money to bring home.
Include the following in your budget:
Get help from friends and family
In many cases your family will be supportive (if a little nervous) about your trip. They are more likely to give you financial assistance if they can see that you are researching and preparing for the trip properly. If they are really worried about the trip, consider travelling with friends or as part of an organised group.
Instead of asking for cash, ask them to contribute to something tangible that they will see as valuable. Most parents would be happy to pay for a good quality insurance policy – they’ll be reassured knowing that you’re covered if something goes wrong. They may be keen to help with the cost of the flight – explain the benefits of a round-the-world ticket. They may be keen to know that you’ve already got your homeward flight taken care of. They will be less inclined to give you money if they think you’ll spend it in the bar on the first night!
Certain visas require that you have a minimum amount of money available for the trip either when you apply for the visa or when you arrive in the country. In most cases you can have a financial guarantor; i.e., your parents can agree to support you. They will need to provide written evidence that they have the necessary funds and issue you with a letter declaring their undertaking.
Parents would be happy to pay for a good quality insurance policy – they’ll be reassured you’re covered if something goes wrong.
Be economical on the right things
Shop carefully to get a good deal on flights (see here for more info)
Don’t scrimp on essentials like travel insurance
Use basic accommodation, not fancy hotels
Self cater when you can, it will be cheaper (and more healthy) than living on take-aways
For local travel compare budget airlines, bus and trains to get the best deal.
Indulge once in a while – you deserve it!