Preparing to Spend Smartly

When it comes to personal finances we like to consider ourselves pretty savvy. After graduating from University debt free* we were able to purchase our first home in February 2010, and since then we've been tediously stashing savings away for travel.

Now I'll be the first to call myself cheap - Travis pokes fun at my frugal ways whenever the opportunity presents itself - so you can imagine my reaction to the thought of paying the bank to let me access my own money while abroad.

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If you haven't traveled much, or checked your bank statements after a trip, you might be surprised to discover all the sneaky fees banks add on when paying or withdrawing money abroad. Foreign currency conversion fees - or what you will be charged for using your debit and credit card outside your home country - can really add up, especially if your trip is lengthy like ours. Although I was able to find a lot of information about the big bad banks in the US, and a movement towards US credit cards eliminating the foreign transaction fee, finding information specific to Canada (where we live!) was a bit harder.

What I was able to find...

Debit Cards: It seems that most banks charge a standard $2-3 per debit withdrawal for using a foreign ATM, as well as a fixed percentage foreign currency conversion fee on the total amount withdrawn - 2.5% is common but this rate varies from bank to bank.

Credit Cards: Again, a fixed percentage foreign currency conversion fee in the 2.5% range is charged on your purchase, once it's converted back to your home currency - however some banks add in an extra step by first converting the purchase to US dollars before Canadian. Here's a great chart from the Financial Consumer Agency of Canada that compares credit card fees.

Is it just me or does it seem like they're double dipping a bit?

Because the banks don't have your best interest at heart, and have become proficient in hiking fees and hiding extra charges, it's important to do your homework before hopping across the border for a weekend of shopping or taking an extended trip halfway around the world. Call up your bank, or go online, and investigate a bit, I didn't know what my bank's international charges were and I was quite surprised once I found out!

It's also important to note that the debit/credit card system that works for you at home might not be the best choice when traveling abroad. For example, President's Choice is my primary bank at home and I'm very happy with them, however when it comes to travel I don't want to pay the fees they charge. Unfortunately they aren't alone in charging these fees - in fact I haven't found a single bank in Canada that doesn't charge foreign currency conversion fees and only one credit card (Amazon.ca Rewards Visa card) that has eliminated it.

But that didn't deter me and after searching around I found the TD Canada Trust Select Services Account. This account has a monthly fee of $30 (waived if you maintain a minimum balance of $5,000) and although they still charges a fixed 2.5% foreign currency conversion fee, there are no fees for non TD ATM use anywhere in the world.

Yes, you read that right, anywhere in the world! That means that I'll save the $2-3 per transaction and only have to pay the foreign currency conversion fees. Since this will be our joint travel account we don't think the minimum monthly balance will be an issue - we wanted to keep an "emergency fund" of about $5,000 anyways - and the ATM savings could amount to $40-50 over the length of our trip. While it might not seem like much, when you are planning a budget trip every little bit helps! 

A few other options you may want to consider if you're looking for a travel credit cards, I've read great things about Capital One's Travel Rewards cards as well as MBNA Platinum Plus MasterCard.

*Credit goes to our parents who let us live at home rent-free while studying, and some great summer jobs that covered tuition and books.

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9 Ways to purge your house before travelling

If you’ve been following our posts recently you may already know that we are in the throws of a full scale move – having to vacate our house by the end of June to make room for the new tenants. Being a planner and Excel spreadsheet junky, I jumped on the opportunity to make list after list of moving priorities, most of them were ignored. 

To say we have a lot of stuff is an understatement

However we did manage to make our June 30th deadline and now everything we own is either hibernating in a Rubbermaid bin in the back corners of a garage or being put to use by our friends and family in their homes. If we had to do it all over again (please no!) here are some things that we think worked well, and a few areas for improvement… 

Start early –The minute we bought our plane tickets we should have been making keep and toss piles for all our bits and pieces. Although we tried to be proactive a lot of things piled up at the last minute. 

Borrow a truck – The majority of our moving in to the house was done out of my Honda Civic hatchback; great little car, not necessarily designed for moving large amounts of belongings. We had to beg, borrow, and nearly steal a truck for the weekend but it was essential in moving some of the larger pieces of furniture. 

Purge, purge, purge – Due to the amount of stuff we had, we needed to cut it down to a storable size. Therefore, if we hadn’t worn or used something recently it was headed for a new home. With that being said, don’t feel obligated to get rid of something that holds sentimental meaning. Also don’t forget to consider the seasons when purging clothes – we may not need toques and mittens now, or on our trip, but they will be greatly appreciated when we return home at the end of December. 

Share the love – A lot of the furniture and decorative items we were storing or getting rid of are in excellent condition, so before sending them to a storage unit or second hand store we asked friends and family if they needed anything. As a result all of our furniture found new, temporary homes, and we didn’t need to pay for a storage locker. 

Rent partially furnished – We were extremely lucky to find two great tenants to rent our place while we are away, and as they don’t have a lot of furniture, and we have too much to store, we were able to compromise by renting our place partially furnished. Again this saved us from having to pay for a storage space or give away pieces that are in good shape but not worth storing. 

Have a garage sale – We wish we had our act together in time to have a garage sale. In the end we gave away a number of nice items because we simply ran out of time and the extra money we could have earned for an afternoon of work would have been a nice addition to our budget. 

Rubbermaid bins are amazing – Although a bit more expensive than regular cardboard boxes, we chose to pack the majority of our stuff into plastic Rubbermaid bins. Waterproof, bug and vermin proof, and sturdier than cardboard they will keep our belongings safe and stack easily. We also tried to remember to add a dryer sheet to each Rubbermaid bin to keep the contents fresh. 

Keep travel in mind when packing – Because we are moving out of our house two months before we leave for Europe it was easy to start packing absentmindedly without considering what we needed for our trip. Make a rough list of what you will be taking in your backpack, then consider when you will need for the next few months before your trip, decide what you no longer need and will be giving away, and then finally pack everything that doesn’t fit in any of those categories. 

Don’t forget the small things – Changing over your home insurance, utility bills, and cable/internet bills may seem small but can have a big impact. This holds true for updating mailing addresses as well. The paperwork piece of moving can easily slip through the cracks while you’re focus is on moving furniture and electronics so make sure to add it to your to-do list (or Excel spreadsheet!). 

Unfortunately moving seems to be one of those things that gets easier with practice – although we’re practiced out for now. Each time you find better and more efficient ways to do it, but in the end we are just glad we made it out in time. Now to adjust to the next two months living out of suitcases and Rubbermaid bins...

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