Hot Tips for Saving Money on Summer Vacation (Re-run)

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1:38Bloomberg Audio Studios. Podcasts. Radio. News. I'm John Stebbick, senior reporter and author of the Money Distilled newsletter. Today we'll be playing you a much-loved episode we made last summer on how to make the most of your money when going away on holiday. Top tips that could end up saving you a decent amount so you can spend more of your time with your head in a book and less time with your hands in your wallet. Hope you enjoy.

2:10Welcome to Merrin Talks Your Money, the personal finance edition of Merrin Talks Money. In these bonus podcasts, we talk about the best strategies for making the most of your money. I'm Merrin Somerset-Webb and with me, senior reporter and money distilled author, John Steffek. Hi, John. Hi, Mel. John, schools are beginning to wrap up. Everyone's getting ready for their summer holidays. In fact, a lot of people are on holiday already. I'm not on holiday. You're not on holiday. Producer Summer, not on holiday. We are all here, but we're here for our listeners. We know you're all about to go on holiday, and we are worried that you are going to commit some of the most common money mistakes out there, or should I say foreign money mistakes out there.

2:47Now, we are, John and I, we have to admit this, We are using, to talk about this, a list sent to us by the lovely people at AJ Bell who've made a list of the things that you can do wrong and remind you how to do them right. And do you know what? Looking at them, the very first mistake is one I made just the other day. Just the other day. Headed from Mexico, realised I didn't have any dollars or any pesos. And what did I do? I went to the Bureau de Change at the airport. It really is just a penalty for being disorganised. And I've done it as well. I don't go anywhere exotic. I know I'm going somewhere that's got euros.

3:24I know I can use the cash machine, but at the same time, you're kind of like, yeah, but what if you get to the airport and you need some euros and you can't use the cash machine? And you've got to tip the first guy, right? You've got to tip the first taxi driver. I have a terrible story about us not doing that when we didn't stop at the Bureau des Champs, the airport didn't have any euros when we arrived somewhere, didn't tip the taxi driver when we got out of the taxi at the hotel, never saw that Charles teddy bear again. All I'm saying is if you don't have any cash, go to the Bureau of Journal at the airport.

3:53You can afford it. The spread between the actual price of the currency and what you will pay at the airport is shocking. It appalls me every single time I'm sort of there and I look at the exchange rates. Oh, it's a shocker. Yeah, it's really bad. Anyway, listen, here's an example of the rates from the AJ Bell report. As of 3rd of July, well, a while ago now, Now, Travelex were offering to change£1 ,000 into€944 if you rocked over their Heathrow airport kiosk. So less than one for one. Yeah. And while we know Brexit was a terrible thing. It wasn't that bad. It wasn't that bad. But if you ordered online from Travelex to pick the money up at the same location in the airport, you'd get€1 ,133.

4:38euros. If you've just done the admin in advance you get an extra 189 euros to spend on your holiday. That is a huge amount. These days I don't think you can really blame the Forex people for this. It really is just a you're at the airport, you forgot to do it and so they're charging you a convenience fee. That's the way that you look at it. Yeah, and I bet they pay a lot of rent for those desks in the middle of the airport. Well aye, exactly. Everyone has to pay for something. Right, so we're not going to do that. It's like the way the sandwiches are more expensive at the airport as well. You can't really blame them.

5:11Are they? Yeah, definitely. If you eat at the airport. So if you buy a Pret sandwich not at the airport and a Pret sandwich at the airport? I do not want to speak for a specific brand just in case. All right, fair enough. But definitely catering at the airport is more expensive than it is. Yes, and so it should be. Limited real estate. Right. What are you saying, John, that the second thing people should do when they're going on holidays is bring a sandwich with them? Bring a packed lunch. Bring a packed lunch. And a two-litre bottle of Coke now you can put on at quite a lot of the airports, right?

5:39Proper money-saving tips. I'm not suggesting anyone drinks Coke, by the way. Two-litre bottle of water. Right. Mistake number two, paying for your online money with a credit card. Now, this is interesting. If you pay with a credit card, you're going to pay a cash fee to your bank. And you know that if you take money out of an ATM with a credit card, you're going to pay an extra fee on top of everything that no one quite understands why you pay that fee. But you do pay that fee, right? Yeah. I think it's just the lesson from that is don't ever use your credit card for actually buying money. You're always going to get charged extra for it.

6:11Use your debit card for anything to do with withdrawing money or purchasing money or whatever. Yeah, so if you're buying it online or if you're buying it online in advance to pick up at the airport, whatever it is, use your debit card, not your credit card. Okay. Right. Next one. Using your standard bank cards abroad, you get non-Sterling transaction fees on transactions you make in foreign currencies and that's going to be two and a half to three percent of the purchase amount i mean that is whopping actually i mean there are some current accounts that don't charge it but an awful lot do yeah i think about this when you just have to be aware because there's plenty of mainstream banks that don't do this um and also the certainly the online banks tend not to do this i know that starling don't do it because my kids use starling I mean I've got a nationwide card and one of the reasons I got that was because their exchange fees were very reasonable or rather not their exchange fees, the exchange rate you get so I think that's just a matter of looking at the cards you've got.

7:08I don't think you need to get a special one for going on holiday unless you're very attached to your current account. Also it's quite handy, I mean if you get a Revolut card or a Caxon FX card or a YS card etc you can prepay it with a variety of different currencies I might have a couple of those and I find them quite useful I can never remember the pin, usually you leave them at home in the end But in theory, in theory, these are great. That is also useful if you're somebody who travels to a lot of different places. If you go to America and Europe a lot or whatever and you need dollars and euros, then loading up a card with both of those before, that is a kind of useful thing to do.

7:41Yeah. It's also quite a reasonable way to control your holiday spending, isn't it? You can prepay what you expect to spend on your holiday onto that card. And then you can keep an eye on things as you go. And then you can panic for the last three days of your holiday when you realise that you ran out about a week ago. Or, or, you could spend carefully on the way through and splurge on the last two days. This happens too.

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9:48Okay, the next one. I'm good at this one, actually. This is a mistake I never make. Paying in sterling on a card terminal. So when you use your card overseas, everyone knows this. You'll get asked by the machine whether you want to pay in your local currency, in the local currency of the place where you are, or in sterling. And everyone thinks, well, I'm going to hit sterling because that's how I work. That's what my bank account is in. But that is the wrong thing you're going to do. You're going to get the worst possible exchange rate ever. Probably not quite as bad as you get at the Bureau de Change of the Epport.

10:15It's still bad. Pretty bad. So you really don't want to do that. And that is such a simple mistake to make. That is a simple one. You know something I noticed though when I went to Athens for the first time earlier this year? And one thing I noticed was that the waiters there would often, in some places, not all places, but I'd say about 50 % of the time they would take your card away and they would make the decision on which button to press. And sometimes they would press the wrong ones. I don't know what's going on there. And I know that they only relatively recently started enforcing things like receipts and stuff like that in that part of Greece as well.

10:50So, I mean, sometimes you may find that, depending on where you are, people try to maybe slightly coin you on that. I think they're very sophisticated to think that the waiters in Greece are getting kickbacks based on your exchange rate. I know. I was quite surprised. But I know it's not happening often enough that I thought, well, what's going on here? and you were losing 3 % every time bad luck John I was shocked I was appalled I bet you were right I want to go to Athens last one it's lovely it's still totally worth it buyback options last time I went to Athens it was still the days of travellers checks oh yeah oh god I remember them that was yeah it is so much easier going on holiday now so much easier and then travellers checks you had to take them into banks and cash them and then they got stolen and then we had nothing I went to Paris at one point and I had 80 quid in sterling and it was the only money that we had and on the last day it was down to that it was Royal Bank, Clydesdale Bank notes, and you know how some of the Scottish notes look really unusual and this was about 30 years ago, went into an actual bank in Paris and they pulled out their big book of notes, it wasn't there I had to wander around with no money but 80 quid in sterling and I think we had like 3 francs or something, we ended up buying like a baguette to last us for 24 hours.

12:10So anyway, kids, it's much easier these days. You should stop complaining about all this stuff. Last time I had Scottish money reprised was in Dorset. I always see, but that's because they're all racist down here. That's six years ago. Right, the last one, buyback options. Now, this obviously isn't going to happen to John based on what we've been talking about so far, but some people might come back from holiday with spare currency, actual physical notes in their pockets, So they might think to themselves as they go through the airport on the way back, they might think to themselves, oh, let's just walk over to their desk and I'll change them back into sterling.

12:45You don't want to do that. Here's numbers again from AJ Bell. Eurochange will sell you 1 ,137 euros for a thousand pounds. Sounds like a good deal relative to what we talked about earlier. But if you bring all those euros back and you exchange them again, you'll only get 904 pounds in return. quite a hit you do not want to do that some of the people who you can get your travel money from will give you a buyback guarantee so you can take the money back and change it back at the same rate although of course there's going to be some kind of charge or commission to that so what do you do with your foreign currency John if you come back you don't know about this do you keep it for next time because again because of Euros particularly early, you're probably going to be going to a Eurozone country in the future again.

13:34This is how I ended up with a whole load of lira and pesetas, by the way. Yeah, I mean, I don't care. I've got a load of Aussie dollars that are never going to get used. Kenyon shillings, he's got a big part of those. It probably is hard to trade them back, though, if they're physical, because you're going to have to go to a bureau de shongs, even the one in the airport. Yeah, so I said, you know what, I'm buyback options, maybe. Actually, maybe just take what you can get at the time, because otherwise there may be people who are better at admin than us. I don't know who those people would be but if you're anything like us just take what you can get at the time or it's going to sit in your desk until it's not worth anything anyway yeah is that right?

14:08it does feel like a waste of time bird in the hand guys bird in the hand should they spend it in the duty free on the way back? can you do that? that depends on where you are I suppose do you have another suggestion John? if you're in Turkey you could put it in that charity envelope on the aeroplane haha well hypothecating your taxes I think we disapprove of that I don't think there's a gift aid box Stealing money from the NHS Our NHS Right I think John and I are going to leave it there

14:51Thanks for listening to this week's Marion Talks Your Money If you like us, rate, review and subscribe Wherever you listen to podcasts Also be sure to follow me and John on X or Twitter at Marino's W and John underscore Steppik. This episode was produced by Samasadi, Tyler Amadi and Moses Ander. Production support and sound design by Blake Maples. Questions or comments on the show and all our shows are always welcome. Our show email is marinmoneyatbloomberg.net.

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