Managing day-to-day spending on the road

| July 8, 2010 | 17 Comments
atmcards Managing day to day spending on the road

Managing day-to-day spending on the road

In most regions of the world, international ATMs are the best way to manage money while abroad. They are convenient, safe and often provide the best exchange rate—discounting, of course, their sometimes exorbitant service charges. This is generally the cheapest and most convenient way to get cash in the local currency.

Travellers cheques—a dying breed

Increasingly overlooked by card-wielding travellers, travellers cheques are a dying breed. Five years ago, travellers cheques were the preferred means of payment by most international tourists, equal in importance only to cash and more widely used than debit cards. However, with the exponential growth of ATM cards and the emergence of e-commerce, travellers cheques are now facing a slow death as the impact of other newer technologies is felt around the globe. That being said, travellers cheques do have their place—especially where ATMs can’t be found and can serve as an excellent form of back-up, especially as you can claim a refund if they’re stolen (provided, of course, that you’ve kept a separate record of their numbers). However, they can prove to be costly and even worse—a pain to use.

The two-account system

Therefore, ATM use is much more practical and, in our opinion, the way to go. In order to manage your budget—and for added security—we recommend using a two-account system. You likely already have a day-to-day chequing account—one from which you pay bills and make purchases.

We recommend opening a second bank account or a savings account and one for which you do not receive a debit card. It should be accessible only for online money transfers and deposits. We use ING Direct and are very happy with them—but there are a lot of options available. An online savings account has the added advantage of being accessible from anywhere you can log in and usually boasts industry-best interest rates.

The benefit of automatic money transfers

Because it gains solid interest, this account should hold the bulk of your savings—from which you’ll transfer money into a day-to-day account on a periodic basis. We schedule transfers monthly. It isn’t always possible to reach a computer when you need one on the road, so be sure to schedule automatic payments between the accounts if you can. The real advantage, here, is that it creates a wall between your savings and your spending. With an account at a bank completely separate from