The Salary Calculator

Travel money: Navigating exchange rates 

by Madaline Dunn

While we might be nearing the end of summer, it may be the case that you’ve not yet escaped for your summer holiday. After all, August is typically the most popular month for a getaway. If this is the case, or perhaps if you’re planning on taking an autumnal vacation abroad, it’s likely that exchange rates will be on your mind – or at least they should be.

Getting the most bang for your buck can really help you make the most of your getaway, and at The Salary Calculator, we’ll show you how.

Navigating foreign exchange rates

There are a total of 180 currencies that are recognised by the UN as legal tender, with the four most widely used being:

• The US dollar (USD),
• The Euro (EUR),
• The Japanese Yen (JPY) and
• Great British Pound (GBP).

They’re also fluctuating all the time, and different currency exchanges offer different rates. For this reason, it’s always important to see what’s out there depending on where you’re going and how much you’re looking to exchange.

The pound has seen some serious fluctuations in recent years, from the 31-year low following Brexit, hitting its lowest point against the US dollar since 1985, following the budget announcement by former Prime Minister Liz Truss and Chancellor Kwasi Kwarteng. However, 2023 is looking like the year the pound rebounds after ranking as one of the worst-performing currencies of 2022.

Right now, if you’re converting pounds into euro, one of the best rates for cash delivery for £500 is Eurochange, which offers 1 GBP = 1.149 EUR, or 1 EUR = 0.870 GBP. If you’re planning on travelling a little further afield to Australia, for example, and exchanging £400, Travel FX offers the best rates at 1 GBP = 1.886 AUD, or 1 AUD = 0.530 GBP. If you fancy trying some of the fancy Swiss chocolate in Switzerland, Currency Online Group is the right place for you to exchange £500, there you’ll get 1 GBP = 1.1063 CHF or 1 CHF = 0.904 GBP. Remember, this will differ depending on whether you get your money delivered or pick it up in person.

You can find out more about where you can find the best exchange rates by heading over here. 

Tips for getting the best rates and making your money go further

As we’ve noted, exchange rates vary widely depending on which currency exchange you choose and how much you’re exchanging, so in order to ensure you get the best rates, research is your best friend. Make sure to compare all different rates to ensure you get the most for your money.

According to Alon Rajic of MoneyTransferComparison, excessive exchange rate margins are still “very prevalent” among banks and some specialist providers. Indeed, Rajic noted that people still pay over a 5% markup on their currency exchanges – this, Rajic says, essentially removes benefiting from any of the “recent gains” made by the pound.

If using your card abroad, it’s also important to factor in foreign transaction fees. With foreign transaction fees, implemented by credit and debit card issuers and ATM networks, they are charged per transaction on purchases or withdrawals made overseas and vary between 2% to 3% of the purchase or withdrawal.

If you’re asking yourself whether using a cash machine abroad is better or worse than changing cash at the airport, we’re here to tell you that ATMs usually offer better exchange rates. The reason? Currency exchange stores and kiosks at the airports mark up the exchange rate for profit – so watch out! That said, you need to be wary because withdrawing cash from an ATM can see fees of almost 5%. It’s advised not to use Bank of Scotland, Lloyds Bank or TSB. These cards charge 50p to £1.50 for transactions on top of their normal exchange-rate charge, although spending euros in the EU, Iceland, Liechtenstein or Norway, is exempt.

Another thing to remember is to always choose to pay in local currency if using an overseas card.

It might also be worth getting a specialist travel credit or debit card, as this can give you ‘near-perfect’ exchange rates worldwide.

According to MoneySavingExpert, some of the best out there right now include:

• Barclaycard Rewards (top pick visa Credit card) – With this card you get interest-free withdrawals, and an ongoing 0.25% cashback.
• Chase (top pick Mastercard visa card) – This offers fee-free spending abroad and ATM withdrawals, and 1% cashback -although bear in mind that there’s a £1,500/month limit on ATM withdrawals.
• First Direct (top pick Mastercard debit card) -This offers fee-free spending abroad and ATM withdrawals, plus you’ll receive £175 if you switch over your existing bank account.

Finally, when researching, it’s advisable to look for a buy-back guarantee. This means that you’re guaranteed to keep the initial exchange rate, and there will also be no additional hidden costs.

Also, remember that if you use a bureau de change to exchange cash, and it goes bust while it has your money, you have no protection. A quick swap there and then is the best option to safeguard yourself against this potential risk.

Tags: Currency, foreign exchange rates, holiday money, holiday travel

Financial prepping for summer holidays

by Madaline Dunn

As the sun finally begins to emerge from behind the clouds, summer is on its way. So, it’s likely that you’ll be thinking ahead to possible getaways, whether that’s relaxing by the beach, cocktail in hand, exploring ancient city ruins, or hiking up a mountain.

Financial prepping is key for ensuring you have enough saved up to really enjoy wherever you’re visiting, and get the most out of your holiday.

This week, at The Salary Calculator, we’ll run through:

• Helpful budgeting tips to get you ready for your break
• Weighing up holidaying at home or abroad
• Holiday homes, hotel rooms and camping
• Finding free and discounted activities

Helpful budgeting tips

While inflation is currently at a high point (10.1 per cent) and causing continued financial concern for many, predictions are that it’s due to fall below double digits. Likewise, energy prices are also predicted to drop by July. Considering those in the UK have been hammered with high prices as of late, the gradual ease could leave you with more in your pocket than expected, which could go toward your holiday budget.

According to research, over 70% of the UK’s adult population currently do not have a budget plan, regardless of whether for a holiday or more long-term goals. However, budgeting can help you figure out how much you spend each month, areas you can cut back, and, crucially, help you can realistically save.

There are plenty of apps that can do the hard work for you, too. As outlined in our previous article, apps like Money Dashboard can help you pinpoint overspending and categorise spending, while Hyperjar provides you with specific jars for different savings purposes.

To put that into real terms, the former, in collaboration with the University of Edinburgh and Harvard Business School, found that new Money Dashboard users typically saved 14% of their discretionary spend in the first month.

Once you’ve identified key areas where perhaps you’re overspending and you’re looking to increase your holiday savings further, some of the below tips could help you cut back in ways you hadn’t thought of:

• Meal prep: planning your weekly meals ahead of time means that not only do you shop with purpose and better consider brand prices, but you’re also less likely to be tempted by takeaways and eating food out.
• Invite friends and family over to your home rather than going out for drinks. Research shows that it’s far cheaper to drink in rather than out; in fact, statistics from the Office of National Statistics show that alcohol is three times cheaper in supermarkets, so there are lots of savings to be made.
• Switch supermarkets: There is a huge range of supermarkets in the UK and plenty of fantastic budget choices. Aldi and Asda have both stolen the crown for the top-budget supermarket multiple times.
• See whether or not you can pay less on bills and subscriptions. With regard to bills, price comparison sites are your friend, and once equipped with the figures, advocate for yourself by negotiating with your supplier.

More and more people are employing this approach, too. A 2022 report by GlobalData, for example, found that 40% of UK adults planned to cut back on shopping in order to go on holiday this summer.

Holidaying at home or abroad?

A key decision that will hugely impact your financial preparation for your summer holiday is whether or not you’ll stay at home or travel abroad.

If holidaying abroad and travelling to Europe via the Eurotunnel can save you a big chunk of money, it’s also far more environmentally friendly. Eurostar, for example, estimates that taking the train from London to Paris saves more than 90% of the carbon emissions per economy-class passenger produced by flying. By travelling via the Eurotunnel, you also don’t need to worry about paying extra for luggage – so there are even more savings to be had there.

If flying is the only option, it’s likely you’ll be feeling a little concerned about the price of flights; after all, a number of factors have sent them skyrocketing, including high demand following the pandemic, as well as high inflation and fuel prices.

When you are looking for flights, though, make sure you clear your cookies. Many airline sites use cookies to monitor what kind of flights you’re searching for and then, through dynamic pricing, hike the prices up. Clearing your cookies means that they don’t have this data to inflate flight prices.

It’s also worth looking at what apps are active in the area you’re visiting. BlaBlaCar, for example, allows you to book into a carpool, which can be great for solo travel from a social aspect and can help with savings too. The same goes for EatWith, through which you can eat with locals as part of groups and can help with saving on eating out.

Holiday homes, hotel rooms and camping

Another factor bound to impact your holiday financial prepping and planning is where you plan on staying, whether a holiday home booked through a site like Airbnb, a hotel or a campsite.

Research from TripAdvisor shows that holiday rental properties can be up to 64% cheaper for a one-week stay when compared with hotels. This is especially true if you’re travelling in a group. One of the most popular sites to access such properties is Airbnb, for which there are also discounts and promo codes.

With regard to the price of hotels, data from Hopper shows that prices in the US averaged $212 per night in January 2023, 54% higher than the previous year, and summer is likely only to push prices further. While prices will vary widely depending on where you visit, globally, inflation and supply chain problems mean that hotels are, across the board, more expensive. So, it’s something worth bearing in mind when financially planning for your summer holiday.

While so-called ‘staycations’ have typically been the cheaper holiday option, in recent years, they have increased in price. According to Travelodge, shorter multi-location trips can help make things more affordable.

Camping is another option for those who want a stripped-back low-cost holiday in nature. ‘Glamping’ alternatively can offer the same, albeit with a few more frills.

Making the most of free and discounted activities

According to research by Staysure, UK holidaymakers in 2022 budgeted for £420 per person to spend while on a one-week holiday, which included money for activities. In the current climate, that’s quite a bit to save, and while it’s likely that you’ll want to spend some money on activities, doing your research ahead of time can mean that you unlock a whole range of free and discounted activities.

Festivals, museums, craft fairs and outdoor concerts are all great options that often cost little or no money. Likewise, make sure to utilise your concession status if you have one. There are also plenty of apps that can help you along the way, including:

• Roadtrippers,
• Fatsoma,
• Meetup.

Tags: abroad, holiday, holiday money, holiday travel, savings

Foreign currency and exchange rates in 2022

by Madaline Dunn

After two years of lockdowns and travel restrictions, many will be looking at summer 2022 as the opportunity to finally escape and go on the holiday they’ve dreamt of for so long. That said, when it comes to travelling abroad, there’s a lot of factors to consider – one of them being foreign currency.

Perhaps you’re a little rusty when it comes to exchange rates, or maybe it’s the first time you’re leaving the country; after all, nearly a quarter of Brits have never been on a plane, and one in ten have never left the UK. Whatever the reason, if you’ve got questions about foreign currency, at The Salary Calculator, we’re here to answer all your burning questions. In this article, we’ll explain:

• How the pound is looking against the euro and the dollar
• Whether you should buy foreign currency in advance and what the risks are
• Top tips for securing the best exchange rate and avoiding charges

The pound versus the euro and the dollar

Exchange rates are in constant fluctuation, and a wide range of factors can affect them. Everything from political stability, interest rates and inflation to public debt, speculation and money supply can make a currency go up or down in value.

When it comes to the GBP/USD rate, over the last five years, it has been as high as $1.4328 and as low as $1.1492. That said, currently, the exchange rate is closer to the top-end of the trading range, and the higher it is, the cheaper it is to buy dollars with pounds.

Meanwhile, the GBP/ EUR rate, in 2021 and the beginning of 2022, has also been trading at the high end of its 5-year trading range.

Buying currency ahead of time: The advantages and risks

In some situations, when buying currency, it can be advantageous to plan ahead of time. In cases where you want to exchange large amounts of money, or you’re looking to purchase a currency that’s slightly more obscure than the euro or dollar where the exchange operator may have to order it in, buying in advance could be a good idea. That said, for ‘exotic currency,’ waiting until you arrive at your destination could be a better idea, as local rates are usually better.

You may also be thinking about buying your currency ahead of time in case the pound weakens. However, it’s important to keep your finger on the pulse when it comes to buying currency and check for updates on the exchange market. This can be done at XE.com, where you’ll be able to access live updates on the pound’s value against other currencies. Starting this research around a month before you’re due to head off is a wise idea. If, for example, you notice a trend of the rate steadily going down, buying then and there could help you get the most from your money. A safer bet, though, is to buy half of your travel money before and half later.

For trips where you’re unlikely to need to use cash, to avoid this altogether, it might be worth using a no foreign transaction fee travel card to pay for your purchases.

Tips for getting the best exchange rate and avoiding charges

There are some dos and don’ts when it comes to exchange rates and foreign currency, and below are some of our top tips.

Don’t buy currency at the airport

This is the number one way you will lose out when buying currency. Airport kiosks offer the worst holiday money exchange rates across the board, and they do this because they’re charging you for the convenience. If you’re up against time, or perhaps your trip is a spur of the moment escape, ordering your currency online and picking it up at the airport will help you avoid terrible exchange rates.

When abroad, pay in the local currency

Once you’ve flown to your holiday destination, make sure, when given the option, you choose to pay for purchases in the local currency. This will allow you to avoid both poor exchange rates and currency conversion fees.

Make sure to shop around

There are lots of foreign currency providers in the UK, so it’s worth comparing rates, even if the difference in exchange rates isn’t huge, you can still save a little.

Avoid using your credit or debit card for purchases abroad

When you use your card abroad, it’s likely your bank will charge you a non-sterling transaction fee (usually around 2-3%). Alongside this, you may be hit with additional fees for withdrawing cash and interest on top of the withdrawal. Some cards  charge between 50p and £1.50 for transactions on top of their normal exchange rate charge. Banks who are the culprits for this include Lloyds, TSB and Halifax.

Tags: exchange rates, Foreign Currency, holiday, holiday money

Holidaying in an overdrawn country

by Admin

I’m in Greece at the moment, a country which has been suffering recently from severe economic problems. Over the past decade the government has taken advantage of the security of being part of the Euro and borrowed more than the country’s total annual revenue. The downturn lead to less advantageous borrowing rates, leaving the country with an increasingly difficult task to repay the loans (sounds like the “sub-prime” crisis but for countries rather than homeowners, doesn’t it?). Cuts in public sector pay and benefits have lead to protests and riots. So does this affect you if you’re visiting the country?

My experience is no. The weakened Euro has helped increase the number of visitors to Greece and its islands, where I am right now. Hotels and restaurants therefore are not short of customers and although I have seen a number of closed establishments, such businesses can fail even in boom times. Prices for meals and drinks remain reasonable – no sign of businesses using inflation to combat financial problems. There have also been no effects of any strikes, although if you were to be relying on public transport you may run out of luck (I have had no problem using the buses here, however).

The holiday resorts, bars, shops and tourist attractions have been as busy as ever and it doesn’t appear that the larger economic problems of the country are having an impact on the day-to-day experiences of a tourist enjoying the hospitality of a popular holiday destination.

Tags: Economy, Foreign Currency, foreign exchange rates, Greece, holiday, holiday money, recovery

Pound’s Euro rate improves

by Admin

With the economy having improved over the last couple of months, and many people last year choosing to have a cheaper holiday and stay in the UK, perhaps this year there’ll be more of us thinking of treating ourselves to a trip to Europe this summer. And if you’re one of them, good news – over the last few weeks the Euro exchange rate has improved significantly!

Although €1.20 to the pound is not what you might consider a great rate, it’s not been at that level since the pound plummetted at the end of 2008. Unfortunately, it’s not all good news – this improvement is not due to the pound getting stronger but the Euro getting weaker – the pound continues to fall against the Yen and the Dollar (although it has seen a recent rally on this last count). The BBC’s Gavin Hewitt has written a great blog post explaining why the Euro is in such trouble.

When will the pound return to its previous strong position? Well, the rates we remember of a few years ago such as 2 dollars to the pound are not going to return anytime soon, but if confidence in the UK economy increases then investors will value the pound more. An increase in UK interest rates would also give a boost (since saving pounds then becomes more worthwhile) – but this would impact on mortgage interest rates for a lot of homeowners. Would you rather find it easier to pay your mortgage every month, or have a bit extra holiday money in the summer?

Tags: dollar, economics, Economy, euro, Foreign Currency, foreign exchange rates, holiday, holiday money, pound, united states, us, yen