Parents can help children plan cash needs when working abroad

It's halfway through the summer and children working abroad may be struggling to pay their bills

It's halfway through the summer and children working abroad may be struggling to pay their bills. Some spend their budget on nightly entertainment and new clothes, while others earn sums too meagre to support even their basic needs.

No matter the reason, children having money trouble in a foreign country know their parents are one phone call away. In this situation, parents usually send some emergency cash and hope the child will put it down to experience.

However, a little pre-trip planning can reduce the likelihood of an emergency and eliminate unnecessary expense and worry for parents.

It is important for the student to take some cash with them to pay for smaller items. Traveller's cheques are also an option because the unused portion may be cashed in and if stolen they are refundable.

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Allied Irish Banks (AIB) spokesman, Mr Turlough Crowe, recommends that customers should take at least two methods of payment when travelling and he also advises they be kept separate.

This also applies to students working abroad and two of the best options are ATM cards and credit cards. "Many ATM cards operate worldwide through the Cirrus and Plus systems," he said. Both AIB and Bank of Ireland have global reciprocal agreements meaning students with accounts have access to their cash around the clock.

If used unwisely, however, this can be an expensive option at £3 (€3.81) per ATM withdrawal. "While abroad the child wouldn't want to use it for small withdrawals, or as often as they did in Ireland," said Mr Crowe. It should be used as a backup or contingency plan.

Parents with accounts at AIB may nominate their child's bank account on the 24-hour banking service. So, if Michael jnr calls at 3 a.m. and needs cash in a flash, parents simply call the 24-hour number and transfer cash into his account. It is a live service so the funds are available in minutes, says Mr Crowe.

Like traveller's cheques and cash, ATM funds are pre-paid before you use them. Therefore, funds must be available in the account when a withdrawal request is made.

Credit cards overcome this problem by allowing immediate access to cash or payment for goods. Although different charges are incurred for cash and goods, payment is not due until later, allowing the student some breathing space in an emergency. However, foreign exchange fluctuations are an issue if the student is working in a non-EU country.

A reader in Portmarnock brought this topic to Family Money's attention when she recently asked about the best way to send cash to her daughter working abroad this summer.

If her daughter does not have an ATM or credit card, electronic fund transfers are available from the reader's Irish bank or through a wire service such as Western Union.

The procedure is very simple says Mr David Holden, a Bank of Ireland spokesman. "The person at the receiving end will identify a bank branch and ask for funds to be transferred there. Therefore, it's a good idea to set up a bank account if they're working and earning and want to manage their affairs."

Unfortunately, regulations vary by country so it's sometimes difficult or impossible to open a bank account in some locations, he said. However, a few banks will pass on funds if the recipient provides identification. Telegraphic wire transfer services may also transfer to their own offices in other countries.

Pre-planning for a child's foreign adventure should greatly reduce problems in case of an emergency and no doubt will allow parents to sleep more soundly at night.