As a seasoned traveler, some of my best frugal moves were made as a result of my smart use of the currency exchange between countries.
I have called Guatemala home since 2012. I live there most of the year, but generally travel back to France, where I am from. Last year, I went there three times, spent a couple of weeks in Miami, and went hiking around the Grand Canyon. And while I only spent a day in the U.K. last year, I own property there. So part of my life is spent in pound sterling, as well. As such, I try to arbitrate and buy and save wherever it makes the most sense.
At any given time, I can usually give you the exchange rate for euros, dollars, pounds, and the Guatemalan quetzal.
Spreading Finances Across Currencies
I keep part of my savings in all four currencies to make sure that I'm covered, should I need one or the other. But I also transfer money when I have extra savings and one currency is particularly cheap. For example, when I bought my house in Guatemala, I sent euros over, which got me $1.35 for each Euro.
Properties are sold in dollars over there. I sent a little extra because I thought the dollar was cheap.
As of the first quarter of 2017, the dollar was much stronger. My euro would only buy $1.06. So right now, I try to spend these dollars that I got for cheap so that I can get more out of them. Meanwhile, the pound is pretty low. So I am considering sending dollars to the U.K. to pay off part of the mortgage on my house in England.
Using Currency Exchange While Traveling
Well, if you enjoy traveling, you probably need to take a closer look at currency exchanges. If you plan on visiting Europe or Mexico in the summer, and you think the euro or the peso may be more expensive then, then you may want to buy them now.
Worst case, they get a bit cheaper, but you have already budgeted for your currencies. It also works for flights when the website allows you to pay in different currencies. Sometimes, the currency has a big move in a day, and the website didn’t adjust.
Because my credit card doesn’t charge a fee on foreign transactions, I can pay in any currency and enjoy the savings.
Since currencies fluctuate, the price of an item might be less expensive at certain times in certain places. The last few times I was in the U.S., I stocked up on gifts and clothes for my niece and other babies around me. The goods were much cheaper than in Europe.
I bought a car in Miami and shipped it by boat to Guatemala, saving over $1,000 on an $8,000, car even after import taxes. I once bought a pair of jeans on eBay from a U.S. vendor who sold and shipped it to France for half the price that jeans would have cost me in Paris.
Using Strategy With Currency Exchanges
Many online sites will give you access to international vendors, and an opportunity to save money when exchange rates fluctuate. Do your research first, as you need to account for shipping and import taxes. The same applies to duty-free shopping. They have big banners saying that you get 40 percent off they high street prices. But they take their prices from the most expensive shops in town. You can often find similar or lower prices online at a regular store. Thank goodness for wi-fi at airports – it allows you to quickly check whether you're getting a good deal or not.
For a few years in Guatemala, it was more expensive to buy alcohol and tobacco at the duty-free store than in the supermarket!
What applies to cross-continental shopping is also true of cross-state shopping. If a nearby state has no sales tax, taking a trip once or twice a year to buy clothes and big-ticket items – like a TV or a computer – can make up for your gas costs and more. The currency exchange is worth it!
I'm not saying it’s easy to keep a sharp eye on the currencies and prices across countries and states, but if you do it, your dollar will let you cover a little more territory.