The Lao currency is the Kip (LAK). There are no coins in circulation. The money starts with notes of 500 Kip, followed by 1000, 2000, 5000, 10,000 and 20,000. In shops and restaurants they will sometimes struggle to change the larger notes. You can often pay in the cities with US Dollars (small undamaged notes). For a Dollar you receive about 10,800 Kip (november 2011).
Travellers cheques are virtually useless, except in Vientiane where travellers cheques (in U.S. dollars) can be redeemed at the bank. Credit cards are virtually worthless in Laos, except in hotels and restaurants in Vientiane and Luang Prabang. There are still very few ATMs in Laos. It is advisable to carry American Dollars, which you can exchange for Kip.
The allowance recommended by us includes a minimum amount for your meals, drinks, optional excursions, entrance fees, local airport taxes and gratuities. The amount you actually spend will depend a great deal upon your own habits and so souvenirs are therefore not included in this estimation.