Travelling tips with a falling Australian dollar

International travel has given me a lifetime of sinking feelings and one of the most intense occurred in a Honolulu restaurant late last year. The Aussie dollar had begun its freefall against the greenback, my wife and I enjoyed a sumptuous meal on the first night of our holiday and we congratulated ourselves on not eating too much.

The bill arrived and I started to get indigestion. Sales tax, 20 per cent tip (22 per cent if we were extra happy), which was then converted into $AUD. For every dollar on the bill, we were paying $1.50. The next night we had takeaway. But it didn't last for long. What's a few extra hundred dollars in food when you're on holiday? 

If you take in lots of US dollars, the locals will give you a "blue market" rate that is almost 50 per cent better than the official rate.

It's hardly worth angsting over, especially compared to our first family jaunt around the States in 2008. When we booked flights in August, the dollar was around 90¢. By the time we arrived in December, it was hovering above 60¢. Why us? Our kids were just starting to develop teenage appetites, and three burgers (one shared) for four people cost $100. Most days, we filled them up on Weetbix before leaving the apartment.

But if we're going to get Monty Python about this, that was nothing compared with London in the early 90s. On our honeymoon in 1992, the pound was worth three Australian dollars. A steak cost $60, fish and chips not much less. British food was still ordinary and it cost a fortune: we were scared to go out for a meal. On the upside, it gave us more time for domestic alternatives.

When it comes to accommodation, the exchange rate can be a real game-changer. For Hawaii, our online booking site let us pay on arrival at our hotel in Honolulu but made us pay upfront for Maui, which hurt at the time. When we arrived, Maui was a bargain and Honolulu cost 30 per cent more than when we booked it. On that family trip to the mainland in 2008, we did a home swap in New York, which is the perfect hedge against currency problems, but got stung badly in LA hotels. Swings and roundabouts.

Over the years, my wife has been forever fearful that the dollar would plummet and urged me to buy US dollars when the Aussie was strong. Although she's blowing me raspberries right now, the reason I resisted remains valid. All major purchases – flights, rooms, tours, cars – need to be booked by credit card so the provider has an insurance against a customer who does the wrong thing. What's more, credit card exchange rates seem to charge us a mid-rate price, which is fairer than the outrageous rates you are lumbered with when buying and selling currency.

If the exchange rate really matters that much, then the best hedge is to find a great country whose currency is even weaker than ours against the greenback. We found one a few years ago: Argentina. With surging inflation, the menus change every couple of months to cover the price hikes, the ATMs often run out of cash and limit your withdrawals. If you take in lots of US dollars, the locals will give you a "blue market" rate that is almost 50 per cent better than the official rate. We had some Aussie friends who even traded with a policeman on the beat. My wife gave me a "I told you so" look about buying currency, but later conceded she did not feel comfortable doing that sort of thing.

In the end, however, currency fluctuations are in the mind as well as the wallet. Instead of worrying about how much I was forking out, we figured that it was costing what we expected, plus X. And would I care about X dollars on my deathbed? Not when I think back on the meal we had a seafood establishment in the backstreets of Venice on our honeymoon: the antipasto alone was five courses, the main course comprised four fish, the meal lasted three hours and the two of us waddled around St Mark's Square at midnight deeply in love. Although it cost a fortune, I don't remember the price. But it remains, to this day, the greatest meal we have ever eaten. 

See also: Should you use a credit or debit card when travelling overseas?