A European Adventure
Question: I am to take a trip to Europe this summer with two friends of mine before our senior year of high school. I have about all the money I need now to pay for the trip. But, my mom thinks I should start converting some of my money into Euros as the dollar continues to fall. Should I convert some (or all ) of my money into Euros now to save myself from the falling dollar? If not, how much extra should I set aside to protect myself if the dollar does go lower? Thanks. Andy, Minneapolis MN
PS: I have the plane ticket already so rising oil prices shouldn't hurt me in that regard.
Answer: I'm jealous. A trip to Europe at your age is an adventure. Okay, it's an adventure at any age.
I find it fascinating that travel from the U.S to Europe remains strong despite the low value of the dollar and the high value of the Euro. What I've been told by industry insiders is that one tactic people are using to keep costs in line is to prepay as much of their big ticket expenses as possible, such as travel and hotels. Another expense you might want to prepay is Eurail pass early (assuming your going to be traveling around Europe by rail and not just stay in one place).
I think your Mom is right to suggest converting some of your money into Euros. She might even consider buying you an insurance policy against the dollar going even lower by putting some of your trip money into a short-term certificate of deposit denominated in Euros. For instance, Everbank offers CDs in Euros.