The money game. Happens every trip. I buy a foreign currency, the Aussie dollar rises against that currency. I hold off buying, the Aussie falls like a stone. This trip is no different. I bought some Euros and the Euro sank. I held off buying some US dollars because the rate wasn't right, and the US dollar rose against the Aussie until I bought at a mildly disadvantageous rate, after which it sank again as fast as it had risen. So while the topic stings, here are my money thoughts.
On the road I try to pay for everything with cash. My cards are for use in ATMs, not EFTPOS devices, although of course they can be also used for EFTPOS. This reduces the risk of fraud from dishonest shopkeepers. In each country I acquire local currency as soon as possible — even to accepting losses by changing small sums at disadvantageous border rates. Every country is home to the traveller with cash in hand. Once safely booked into a hotel at my immediate destination, I make it a priority to acquire more cash at a better exchange rate.
Because you can't always find a working, trustworthy ATM when you want one I carry a reasonable amount of hard currency, usually split between Euros and US dollars. Most of the value is in large bills (€50, US$100) because these attract the best rates, but I also stock a spread of smaller bills for use where they will do the most good. I make sure that all the large notes are clean, uncreased and untorn; and that the US notes (except the lowly 1 dollar bills, which can always be palmed off on someone) are all printed 2003 or later.
I divide the money into several sections — immediate use, reserve cache, emergency cache — and store some on my person (never mind where) and some in my baggage (again, never mind where). Note: I don't keep any hard money or cards in my wallet! I do carry a lightweight wallet but I keep only the day's tickets and budget in it, and sometimes, briefly, one relatively dispensable card. It's never been stolen (though several pickpockets have tried) but even if it did get stolen its loss would be small. Mostly it's a booby prize to offer to a mugger.
The problem with cash is that if you're mugged or robbed, it's gone. So I keep most of my money safely stored in ATMs until I am ready to spend it.
The bulk of my money actually lives in a high interest bank account that isn't accessible by plastic card. To avoid frequent internet banking logins (in today's keylogger world every such login is risky when you're on the road) I set up a periodical transfer of funds from the high interest account to top up the various pieces of plastic, so that if an account gets low on funds I usually only have to wait a few days for a fresh supply to arrive. About once a month I find a relatively "safe" PC to check my balances and to pay off my credit cards. I change my passwords during each session in case a previous session was keylogged, although this is not much help as if they get my password they'll probably empty my account before my next login. It's better than nothing.
I carry two credit cards — Visa and AMEX. I usually keep these deeply hidden (separate from one another) and only use them to book or pay for accommodation and airfares if cash won't do. Both cards have 44-day interest-free periods and I keep them paid off. The credit cards are my ultimate emergency resort in case I find myself without cash. As long as it is not maxed out by casual overuse or by fraud, either card will cover the cost of an air fare home from anywhere. Paying off a credit card debt once safely back home is better than working illegally in some 3rd world hell hole to try to raise a stake!
I also carry a Visa debit card and Cirrus/Maestro ATM card linked to separate bank accounts. Because they are hard to replace on the road, these, too, rarely get used and are mostly kept hidden (in separate places) as emergency sources of cash.
My main source of road funds is a pair of ANZ Travelcards. These cards connect via the Visa network and both access the same account. For this trip they are denominated in US dollars. One card is designated the primary card and the other is a "backup", but because the primary card is the one whose number I have to use to top up the account, I mostly use the backup card to withdraw cash and keep the primary card tucked away separately. The backup card is the only card that sometimes sits briefly in my wallet (until I can tuck it into a safer place). If either card gets lost, stolen or damaged, ANZ will send me a replacement pair anywhere in the world. I've seen this in action — during my last long trip the backup card became damaged by a succession of dodgy ATMs and had to be replaced. No problem.
Managing foreign currency is a complex dance. In the first place I try to avoid accepting any notes that may be hard to spend (sometimes difficult in countries such as Iran, Pakistan and India where smaller denominations come in thick "bricks" stapled together). Once back in my room I always perform triage on my new supply of cash. The tattiest, grubbiest notes go straight into my wallet and I use them up first. Good notes get checked carefully for counterfeit (I got caught once, in China, with a counterfeit note, so now I'm doubly cautious) and set aside for later. I try to familiarise myself with the look and feel of the notes so that I'm less likely to be fooled by fakes or to confuse large and small denominations that look similar. For the same purpose I sort them so that they all face the same way, and I arrange them consistently by denominations so that I'm less likely to pull out a 1,000 Manero note than the 10 Manero I was reaching for. I also keep an eye out for interesting or odd specimens that will make good, cheap, lightweight souvenirs.
I always ask for some small denominations when changing money, even though this makes the wad I receive even thicker, and I avoid the very biggest denominations unless inflation has outrun their value. I break my big notes at hotels, trains stations, bus stations, museums and other expensive sights. When paying for something I use either exact money or the smallest possible larger note or notes. Handing a big note to a vendor or taxi is just asking to be ripped off.
I minimise exchanges at the border, unless I need a little ready cash. Rates are always better away from the borders and you're never at your best while trying to cross a border. At the same time, some currencies lose their value the moment you cross a border. In 2007 I carried 200 Ukrainian Hryvnia for months until I finally unloaded them (at a 35% discount over their nominal value) to a cagey money-changer in Iran. I got a good deal; the things had been waste paper until I stumbled upon this guy.
Travellers Cheques used to be a major way of carrying my money but in the past few years commissions and required paperwork have been rising and the number of places that accept them has fallen, so I'm considering not carrying any this year. I will probably carry US$500 in AMEX cheques just in case.
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