It’s tricky to travel on a budget when the exchange rate is so bad! That’s right, the US Dollar is at an all-time low, but we can’t let that bring us down!! You can still go to Italy, shop for those one-of-a-kind items, and have a great time by keeping a few useful tips in mind.

:: TAKE CASH BEFORE YOU LEAVE
First of all, I recommend that you have a couple hundred EUROS with you before you leave the US. That is to ensure that you have some cash handy for your first expenses: taxi cab, sandwish, phone calls, etc. regardless if the ATM at the airport works or not once you get there (ATMs are not always functioning because of the high usage). For the record, the Euro is the ONLY currency used in Italy (and most European countries part of the E.U.).

:: USE YOUR ATM CARD
ATMs are the best way to take cash out once you are in Italy, but the daily limit is 250 Euros (banks do that to prevent fraudulent transactions), so again, make sure you have enough cash before you leave.
Banks have very strange hours to say the least (some, but not all, follow this schedule: 8:20am-1:20pm and then from 2:35pm-4:05pm), so it’s not always easy to find one open while you’re out. Make sure to tell your local bank the dates you will be gone so your check card doesn’t get blocked!! Also, make sure your PIN number will be good overseas, some banks require a different PIN, so again, ask your local branch. DO NOT take Traveler's Cheques, they are VERY hard to change, many banks don't at all, so avoid the whole trouble by not taking any.

:: USE YOUR CREDIT CARD
Most stores in the bigger cities take credit cards, but not the majority when you’re in a small town. Also, stores are more willing to come down on price if you pay cash! MasterCard and VISA are the most commonly accepted cards. You will get a good exchange rate by using your credit card, but if you pay cash you can expect to get an average discount of 10% if you ask for it (I would start asking for a “sconto” from a total purchase of 100 Euros or more).

:: DON’T BRING CASH US DOLLARS
A note: use your credit card, use ATM machines (which in Italy are called “BANCOMAT”), but don’t exchange your cash dollars, unless it’s an emergency, because that will give you a terrible rate and you’ll end up paying more commissions than anything. Always calculate an additional 2-3% over the current Euro-US Dollar exchange rate, because that is the average commission fee that your bank or credit card company will add on as a service charge to each transaction you make in Italy.

:: GET MONEY BACK BY ASKING FOR A TAX FREE FORM
A great way to save money is to fill out a “Tax Free Form”, which you can ask for in many retail shops around Italy. The 20% SALES TAX (VAT) is already INCLUDED in the merchandise that you are purchasing, so if an item is 10 Euros, that is what you’ll be paying at the register (tax is not added at time of payment like in the USA). You will need to fill out this form completely, with your address, passport number, and other personal information, but this is legal and controlled by the government.
The Italian government encourages foreigners to spend by refunding a little over 13% of the sales tax, but there is a minimum purchase necessary for this, which is about 150 Euros (as a total purchase in one single store, can be multiple items). By filling out the form and keeping the original receipt, you can present it at the airport of departure on your way back (at the information desk), and you will get roughly 13% refund of the tax you’ve paid while shopping throughout your trip. Believe me, it adds up!! The refund is given as either cash (Euros or Dollars) or by crediting your credit card (this may take longer, while the cash refund is instant). Unfortunately this refund doesn’t apply to food expenses, restaurants, hotels, car rentals, etc, but still, by the end of your trip you may have a stash of receipts that can give you some relief from the guilt you got from all the shopping!!