On the eve of a great trip, the bags are packed, the camera is loaded, the travel guides are in hand, and the last thing you're thinking about is how to save your money or convert it to foreign currency. So it pays to think ahead a little attention now can save you serious money in the long run.

by Stacy Kravetz

How to pay for things overseas

When dealing with foreign money, you have a couple of basic choices. You can convert all your money into foreign currency before you go, you can get travellers cheques or you can use your credit card or cash card.

The problem with getting a wad of foreign cash beforehand is twofold: you won't get the best rate of exchange and you'll be stuck on your trip carrying a load of cash, which is risky. If you plan to pay for things in cash, the better route is to get travellers cheques from a bank and convert them to cash as you need them. This way, if you lose them or if they're stolen, you can get them replaced and continue your travels. Plus if they end up in anyone else's hands, it will be tough for them to cash them because they require matching signatures and photo identification. The other option is using a credit card, which is discussed in more detail below.

How to get the best exchange rates

Let's start with how not to get good rates: walking naively up to one of the windows around town marked "Cambio," "Wechel" or "Exchange" and plonking down your money.

The only place worse than an exchange booth in town is the one at the airport or train station. These establishments profit from the convenience they provide, so if you land in a foreign country without a lira, drachma or yen to your name, and you need to convert some travellers cheques quickly to get to your hotel, you can bet the exchange counter is making a healthy profit out of your situation.

Avoid this by getting your currency from a bureau de change at a local bank before you go, which will get you into town where you can find a bank that will give you a better rate. Banks will exchange travellers cheques into the local currency, often without charging a fee. You'll generally get better rates at banks than at currency exchange booths on the street, and you can do a quick comparison before you change your travellers cheques.

Another way to get good exchange rates is to use your credit card. If you have a card and plan to pay the balance responsibly, use it when you travel overseas to get you a better exchange rate that you'll get almost anywhere. Credit card companies can get better rates than you can, so if you charge your hotel and restaurant bills instead of converting travellers cheques and paying cash, it will end up costing you less.

Do not, however, use your credit card to get cash from ATM machines. When you take out a cash advance, you'll still get a better rate than you would from most exchange bureaus, but you'll have to pay your credit card a cash advance fee, plus interest from the day you take out the money. Translation: if you take out 17 cash advances over the course of a two-week trip, you'll have to pay 17 separate cash advance fees. And if you take out more than you actually need, you'll end up paying interest on it, even if you convert it back to pounds at the end of your trip.

If you absolutely have to get cash from an ATM, err on the side of caution and take too little rather than too much. The cash advance fees - usually a couple of pounds - are generally lower than the interest on the daily balance you've withdrawn.

GREAT DISCOUNTS

If you're a student, take your ID. It can get you discounted rates at cinemas, museums, youth hostels - too many places to mention. It can also get you better rates on trains, buses and other forms of public transport.

Professional affiliations can also help you get discounts. Museums and other tourist attractions often have special categories of visitors who can receive discounted rates. If you're a journalist, for example, you may be able to get free admission to certain tourist attractions if you show proof, so make sure to bring evidence of any professional memberships you have, just in case.

Another big money saver is your local rental car agency. If you plan to rent a car overseas, book it ahead of time. You'll get a MUCH better rate. It can mean the difference between #200 a week if you rent here and #100 a day if you go to a rental car agency in a foreign town - plus you have the benefit of reading all the terms of conditions in a language you can understand.

Lastly, consider staying in hotels, hostels or B&Bs that offer breakfast. Often the room prices aren't much (if at all) higher than places that don't serve breakfast. Even if it's simple fare, it can save you a bundle if you don't have to go out for a sit-down meal each morning.

Bon voyage!