How exchange rate can impact your travel budget

Travel
Currency rate
Financial tips

Along with the school holidays, summer is a popular time for family vacations. As prices for overseas holidays are usually inflated during the summer travel period, it is not unusual for travelers to scout around for the best air-ticket, accommodation and package tour deals. Many also take advantage of the summer sales to make the most of their travel budget. However, do you know that currency rate changes can make you pay much more for your holiday?

 

Japan is one of the most popular holiday destinations for Hong Kong people. Say a family of four planning a 5-day trip to Tokyo, with expenses including accommodation, transportation, meals, admission tickets to different attractions will expect to spend at least tens of thousand dollars. More budget will be needed for shopping. Therefore, currency changes are also a consideration when planning the travel budget. One way to manage currency fluctuations for example, is to purchase foreign currency in smaller amounts at different periods to balance out the changes, and reduce the impact on our travel budget.

This balancing out method is also useful in personal investment. Known as dollar-cost averaging (DCA), this important long-term investment strategy helps to mitigate the risk of market fluctuations by investing a fixed amount at regular intervals, whatever the price of the securities. In the long run this averages out the buying costs and reduces the impact of short-term changes in the market.

Whether you are planning your holiday or making an investment, the key is to start planning early and do it carefully. Consider different factors and use appropriate management strategies to help you to achieve your targets.