Tuesday, December 18, 2012

The Joys and Pitfalls of Foreign Currencies

I got broke more often than not—probably as often as I got elated to have such large denominations piling up in my wallet. When I began living in Mexico, the currency rate of exchange was roughly 10% for a Mexican peso of either an American or Canadian dollar. So when I had $5,000. pesos, it meant that I had about $500. but it certainly didn’t feel that way. There were 3 zeros instead of 2; it felt like wealth and fostered a false sense of security. Funny how adding “nothing” (zeros) can reassure one about financial security. (I wonder whether there might be a metaphysical message in this…)
I have a Canadian friend here who always keeps a cool head about money. She immediately figures that she has in hand ONLY the Canadian equivalent of 10% in Mexican pesos. In a way, she does reverse conversion. And she uses that amount for the sake of comparison. But in my quest for accuracy, I carried a pocket calculator that I used to convert feet into meters and centimeters into inches. I also used it to convert from dollars to pesos and way too often got a dizzy reaction to feeling so rich. Imagine having $2,000. (dollars) instead of $200.
At times, my reaction to the price of things was one that would go from horrified to giddy surprise. A pound of butter at $54.70? But wait, things would take a turn for the better when I figured that I could buy 10 bolillos (crusty buns at 2 pesos each) for $2.00! I could always eat them unbuttered to balance things out. I’m still battling that one.
Things got a bit complicated when the rate of exchange began to fluctuate between the proverbial 10% to 11.5675% or in times of great abundance to 13.4253%. But this was the official rate, from country to country. It didn’t take into account the bank fees for converting currencies. To my mind, either the banks were unaware of the official rate of exchange or ignored it completely, and I would often feel cheated. Also, since I used ATMs that also charged a fee of about $24.30 pesos on any foreign withdrawal a couple of years ago, to the present fee of $32.40 pesos per transaction, this added to my bank fee of $5.00 dollars for each withdrawal!
So to ease things for my calculations and withdraw only the amount that my bank would allow daily, I would go to the ATM and click on the “check my balance”, which would automatically appear in pesos. Then I would guesstimate what was really available for the day by deducting about $10.00 dollars from my daily allowed amount. This would include the $12.30 pesos for the balance checking service, the $32.40 pesos for withdrawing the allowed daily amount, and the $5.00 dollars fee for delivering the cash from my bank. Why then, did it not work out that way?
As if things weren’t already somewhat complicated, every time that I would inquire about my balance (my way of getting a more accurate figure on the rate of exchange) the ATM would suddenly be unable to read my card when I tried to get my money! Or the ATM screen would show that my bank that had allowed ME to check the balance on MY account would not permit the withdrawal of MY money. So I would have to cab it from the Banamex ATM to the Bancomer one. Cashiers are not trained or allowed to withdraw from any foreign account. It leaves only the ATMs. I suppose that the bank’s program would assume that the card must have been stolen since, as the owner of the card, I SHOULD know what my balance is. And I DO! Only it’s in dollars. This got to be an expensive exercise. And it did nothing to booster my self-confidence.
So I gave up calculating. Not an easy reckoning for one who can figure out how many bricks or cement blocks are needed per square meter. Now I just withdraw what I figure is more or less the daily maximum allowed and leave it to the gods of finances to inform me of what I have left after I’ve taken out what I need for the month. It works out pretty well most of the time. But I do get broke once in a while and end up with less than $10. dollars in my pocket during the last week of the month. Why? I would sometimes forget that besides the instant fees, an additional $20. to $24. dollars would occasionally be deducted from my account towards the end of the month for a number of withdrawals in excess . . . of what exactly?
Go figure.

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