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Strategize to stretch funds during international travel

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The recession has led to tighter spending habits and nonessentials have been limited, with luxuries such as travel abroad being taken off the table. Perhaps now that the new economic realities have set in, however, some people might be looking for affordable ways to take in the sights and sounds of a foreign culture. If this is the case, a well-planned itinerary and a few rules of thumb can help you maximize U.S. money overseas.

When choosing where to travel, remember that not all currencies perform alike against the dollar.

Despite recent gains, the greenback continues to lag behind the pound and the euro, but exchange rates are favorable in other parts of the world. Mexico, Argentina, Hungary and South Africa are just a few places where the value of the dollar remains strong. Do your research and find a location that matches your travel priorities and your budget.

Keep in mind that costs for comparable goods and services could be higher or lower depending on the country.

Where to stay
Depending on who’s traveling, there are ways to save money on lodging. If it is children who will be spending time abroad, a home stay – which entails residing with a local family – may be a good option.

This arrangement can provide a place to stay, meals and other amenities.

Students also might find that youth hostels are a cost-effective accommodation, usually with cooking facilities, for reasonable nightly fees.

For other travelers, bed-and-breakfast establishments, elder hostels and local hotels may prove to be less expensive than the nightly rates at large chain hotels. With the plethora of online review sites now available, you can research lodging in advance to ensure they’re to your taste.

Food and transportation
The cost of restaurant meals can quickly add up during overseas travels. Look for alternative options, such as local grocery stores and open-air markets, which can provide less expensive food to eat on the go. These shopping venues also are a great introduction into an area’s culture and cuisine.

When visiting restaurants, try to find establishments that cater to the local population. Their prices tend to be lower than tourist-oriented restaurants. A bottle of house wine to go with a meal can often be a better deal than individual drinks.

In many places, it’s cheaper to order a beer, cocktail or even a cappuccino while standing at the bar rather than sitting at a table.

Keep in mind that as customs dictate, tipping may not be necessary.

For time spent in large cities, it likely will be more cost-effective to use public transportation – and walk a lot – rather than renting a car, which can add parking costs.

For rail travel, be sure and study available choices to find the best deals in relation to a trip itinerary.

For air travel, use online resources or check with a travel agent to find the best bargains.

Here are a few other cost-saving measures:

• Students or others planning extended stays should explore whether purchasing a local cell phone or buying a phone card offers cheaper connections back home.

• Cash from automated teller machines usually offers the best exchange rate. Check with your bank or credit card company to find out what fees apply to your transactions.

• Look for passes to events and museums to get the best deals. Many destinations offer package deals that make it more cost-effective to tour favorite attractions.

While vacation budgets may be smaller than they have been in the past, there are plenty of opportunities to make the most of international travel.

Paula Dougherty, CFP, ChFC, CLU, is a senior financial adviser with Dougherty & Associates, Ameriprise Financial Inc. in Springfield. She may be reached at paula.j.dougherty@ampf.com.[[In-content Ad]]

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