As more Malaysians travel abroad for holidays and business, it is important that we be reminded of certain important factors related to short trips overseas which are often overlooked in the preparation stage.
These days, an increasing number of Malaysians are travelling overseas due to relatively cheaper airfares, packaged holidays abroad and international business concerns. But amidst the excitement of planning to see new places and experiencing new cultures, we must not forget to prepare ourselves financially so we will have enough money to buy souvenirs and try out new fun activities such as bungee jumping. This article will discuss the financial preparations that you need to do before you embark on your journey.
1) Know the cost
The cost of travelling often falls on us. Staying in a five-star hotel can easily cost more than RM1,000 per night, especially if you are travelling to a developed country. But staying in a budget hotel may cost less than a quarter of that amount. Flying business class to Britain costs around RM15,000, but if you choose to fly economy, it will only be around RM3,000. There are several ways which you can get tickets at a cheaper price. The first place you should go is the travel fair which is organised at least three times a year by various organizations.
This is where rock-bottom prices for tickets can be found. If you do not mind travelling with a budget airline, the best way to get the cheapest price is to book as early as possible. For example, an airline is offering a single trip to Bangkok, Thailand, a month from now for RM109.99 whereas if you were to purchase the airfare for today, it will cost you about RM319.99 (excluding tax and fees). So, to get the best deal, decide where you want to go, and then plan your travel itinerary and budget accordingly.
2) Get Insured
Travel insurance is often overlooked and it is one of the most important things to consider before you set off on your destination overseas. Since you never know what might happen, it is better to be covered than to be sorry later. The minimum cover you should be looking for from an insurance policy is:
- Travel anywhere in the world;
- Medical expenses paid if you fall ill and incur medical costs;
- Reimbursement if your belongings are lost, damaged or stolen;
- Personal liability insurance if you do something that injures people or causes damage to their property;
- Sports and activities that you might not have previously considered such as water rafting and scuba diving; and
- Winter sports (if you are travelling to a winter destination).
Another way of getting insured is to pay for your airfare using your credit card. More often than not, credit card companies will provide insurance coverage for your journey. However, do check the details and do not simply assume.
3) Keep your travel money options open
Money is the next most important component of your travels. When travelling, you have the option to use cash, ATM card, credit cards or travellers’ cheques. Each has its own pros and cons. Cash for instance, is easy to use and always accepted. The drawback with cash is that once it is lost or stolen, it cannot be replaced. In this respect, using credit cards and ATM cards or travellers’ cheques are better. They can be replaced within a short period of time and with a minimal service fee.
However, make sure that your ATM card is in sync with either PLUS (Visa) or Cirrus (MasterCard). And if you intend to use credit card, choose one that charges the least for overseas transaction fees.
4) Cash
Before changing your ringgit into a foreign currency, scout around and compare the rates of a few money changers to get the best rate possible. And it is a common perception that airports and banks offer the lowest rate, so it is best to look for other alternatives. To save you unnecessary angst, it is wiser to carry US dollars with you rather than the Malaysian Ringgit when visiting certain countries. For example, in Russia, it would be easier to change US dollar for Russian rubles, than it is using the Malaysian Ringgit.
5) Traveller’s Cheque
For traveller’s cheques, you need to know the country you are going to because each country has different preferences. While it is widely accepted in the United States, it is not favourable in Romania which favours cash. It is also worth noting that there are two bank charges when using travellers’ cheques.
First, when you buy the travellers’ cheques, most banks charge one percent of the total amount, and secondly, when you cash in the cheques. Some European banks, for instance, charge up to six percent commission. So, ideally, you should try to buy the cheques from a retailer who will cash any unused cheques free of charge and if you buy from the bank, check if you can deposit the cheques into your account free of charge.
6) Credit and Debit Cards
Many credit card issuers impose foreign-usage loading for the usage of their credit cards abroad and for withdrawing cash overseas. So, you should first check every credit card that you have in order to choose the one with the lowest rate. If you are debit cardholder, you should look for the Cirrus or Maestro sign to use the card to withdraw money directly from Automatic Teller Machines.
Most importantly, whether you choose to use cash, cards or cheques, be sure to keep them safe. Always remember to keep within easy reach telephone numbers which you need to call to cancel a bank card which has been lost or stolen.
Remember to jot down the serial number of the travellers’ cheques. Just by spending a fraction of the time you would spend on sorting out a few financial matters, you could ensure that you do not end up with holiday blues.
