Money Mondays: Foreign Money Isn’t Monopoly Money

Money Mondays is a weekly post about different ways to have awesome adventures that won’t break the bank. Enjoy!

When I am within the United States, I know what my money is worth. I know exactly how many minutes I had to work to get a dollar bill, so I almost always made frugal and worthwhile purchases. I knew if prices were too steep or if a salesman was trying to rip me off. Sadly, I can’t say that most other Americans are that in tune with what they make, but I think I understand the value of a dollar.

But I don’t understand the value of a Euro. Or a Peso. Or a Nuevo Sol. Or even a Canadian Dollar!

It can be tricky to spend money in a denomination different from how it was earned. I hope to improve at this, but for now, I’m learning from my mistakes. Hopefully you can, too.

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Pesos: Chuck E Cheese Tickets

My very first time using foreign money was when I was 14 and on a cruise to Mexico. Like most tourist areas of Mexico, items are priced in pesos, but you can pay in dollars. At the time, signs were posted near the shops: $1=10 pesos. So if I bought something for three pesos and paid with a dollar bill, I would get 7 pesos in change. Now that I had these new coins, I might save one or two of them for keepsakes, but I had to pick out more things that could be bought with my newly converted money.

I had outgrown the thrill of Chuck E Cheese by this time, but apparently I didn’t learn my lesson of how arcades make money: convert your cash into tokens, convert your tokens into tickets, and then with those tickets you can buy prizes. The value of your prizes isn’t worth what you actually shelled out for them, but the tokens and tickets you got were only redeemable there, and you had a fun experience in the meantime. However, Mexico is not Chuck E Cheese.

Nuevo Soles: Trusting the Vendor

A few years later I ended up on two mission trips to Peru. Some stores here also accepted American money. But there were no signs stating what a dollar was worth in Nuevo Soles. In fact, most items in most stores did not have a marked price. So I would place the things I wanted on the counter, the shopkeeper would give me q total and, knowing a dollar was about three soles, placed at least that much cash on the counter. I would get change as the vendor saw fit. Obviously in hindsight, I was taking risks with my money, both with unpriced items and an unknown amount of change. I was on mission trips, so I figured whatever money I spent would just benefit the local economy. More likely I was enabling shopkeepers to stash some extra tax-free cash and teach them how to take advantage by profiling Americans in the future.

Canadian Dollars: It’s Cheaper Than It Looks

Last summer, I went to Niagara Falls, both countries. Since my time in Canada was short and close to the border, I decided that instead of exchanging money, I would use my credit card. And whenever I saw a price, I told myself that CAD is with less than USD, so I paid for things even if they seemed a bit pricey. When I looked at my statement later, I realized that the dollars at the time had a nearly 1:1 ratio. Plus, since my credit card charged a foreign conversion fee, I ended up paying more! I should’ve checked these things ahead of time to know what I was really spending. The other foreign countries I went to in the past had a lower cost of living and better exchange rate. You can’t compare placed like Canada to places like Peru or Mexico.

Euros: Everything’s the Same

Since I’m in Europe at one of the best exchange rates, I mistakingly think of Euros the same way I think of dollars. But a Euro is worth more (ranging from 10-14% more over most of this trip. When I make small purchases, that doesn’t seem like much of a difference. But with three months and a few thousand Euros spent, I’m seeing the difference now!

Even if the money you spend doesn’t look the same as the money you receive, it isn’t Monopoly money. It has a value, and it’s up to you to know its value!

What is your mindset when it comes to foreign currency?

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