A new study from TD Bank finds many travelers could improve how they prepare financially for trips abroad.
Although 95 percent of travelers say they plan a budget for international travel, most stop short of detailed financial planning. The study reports that 40 percent wait to exchange currency until they arrive, 37 percent omit certain expenses from their travel budget, and 35 percent do not anticipate credit or debit card fees—despite 78 percent using credit cards while overseas.
“Traveling abroad is an exciting experience, but knowing how to handle your finances is important for a smooth trip,” said James Wolanski, managing director, global foreign exchange, TD Securities. “It’s a good idea to have some foreign currency with you before leaving the U.S. to cover immediate expenses such as transportation, food, tips, or local experiences.”
The study found the average international travel budget for a family of three is $5,800. Most of that budget is spent on food and entertainment, with a significant portion going toward tourist activities and gratuities. Younger travelers tend to be better at sticking to their budgets; they are also more likely to select destinations based on cost and to monitor foreign exchange rates before traveling. In contrast, 21 percent of baby boomers report exceeding their travel budgets.
To make international travel smoother and avoid surprises, travelers should consider these practical steps: estimate all likely expenses (including local transport, tips, and incidental fees), research potential card fees and notify banks of travel plans, and exchange a small amount of currency before departure to cover immediate needs on arrival. Monitoring exchange rates ahead of time and factoring currency fluctuations into your budget can also help prevent overspending.
Adopting a few simple financial habits—such as carrying a mix of payment methods, keeping a small emergency fund in local currency, and tracking spending daily—can reduce stress and help travelers enjoy their trip without unexpected costs.