Tips on making the best of a shrinking expat budget due to currency fluctuations

The expat lifestyle as it’s portrayed online gives plenty of causes for envy in many conventionally-oriented members of society.

It’s true that living outside your comfort zone as well as your country can be exciting as well as challenging, but realities exist everywhere expats hang their hats. Budgeting is one, and is a good reason why becoming a digital nomad is so popular nowadays, even although it carries its own problems such as dealing with fluctuating exchange rates. The majority of expat digital nomads get paid in the currency of their home countries and lose out one way or another when their exchange rates head in the wrong direction.

It’s the same for another, less mobile, expatriate sector – retirees living on their home country pensions who’ve chosen a particular location for its cheap living costs. As has been demonstrated over the past two years, political shenanigans and their effect on exchange rates can turn ‘just managing’ into a total disaster resulting in the worst scenario of a return to the home country. Obviously, for both groups, budgeting and watching the pennies is a must in these troubled times.

The first thing to remember when transferring money from your home country account to wherever you’ve stashed your cash in your adopted country is that your high street bank is now decidedly unfriendly as regards exchange rates and charges. A loss of between 2.5% and 3% is average, but 6% isn’t unheard of. It may sound like not a lot, but adding it up over a year isn’t recommended if you’re prone to depression!

Of course, the answer’s out there on the internet – money transfer companies. This is the only way to stop your bank pocketing the entire difference between the interbank rate and the rate you’re paying. Another online giant to ignore is PayPal, easy to use as long as you ignore the fees they charge for currency exchange and international money transfers. Averages are 2.9% for the transfer plus an add-on of 2.5% for the exchange as well, and the poor rates make it the worst choice for any expat.

Genuine online currency exchange sites give you the chance to check the daily rate before deciding on which company to use from a convenient drop-down list. Adding up your savings on currency exchange over a year gives a feeling of quiet satisfaction as well as more bangs for your budget’s buck.