A brief word on why middle school math is important.
What is 80/4.5 ?
Can't do that in your head? Well you should. That's the approximate value of a nice steak in Buenos Aires. 80 pesos. And the 4.5? Well that's the rough estimate of how many Argentine Pesos equal one US Dollar. I say rough because when I arrived in June the official rate of exchange was 1:4.45, and as of yesterday the official rate had climbed to 1:4.62. In two months. When I was here in 2009, the rate was 1:3.8. So its been climbing, but the inflation rate has accelerated recently. So, as a side note, if you (for some unfathomable reason) decided to invest in the Argentine Peso, you should probably get the hell out.
Simple math. It's important. Because without it, you can very easily get lost in a foreign currency. Admit it, you go to buy something, you think in dollars. I STRONGLY doubt any American considers what her tube of toothpaste costs in Euros. But that quickly becomes a problem when you leave the US. And admit it, that problem is because you're lazy and you hate numbers. I'll wait, the first step is admitting you have a problem.
Why? Because when you show up in a new country, one of the very first things you do is acquire the local currency. How should you do it? ATM. Never, for any reason, use the airport exchange booths. They are a business, they try to make money off of your money. The ATM will give you an up-to-date and accurate exchange rate that, if it varies at all, varies only slightly from the currently accepted international exchange rate for the host country and yours. Second choice should be a bank, preferably one where you are an account holder, because if they charge fees of any kind, they are generally pretty low. They're too busy making money off all the credit cards to care about their margins on forex transactions.
So what happens once you have Euros or Pesos or whatever else you're after? The first thing you probably do is look at how pretty and non-boring-green it is. The 100 ARS notes are kinda pink and purple and have a bunch of cute little horseys on em. Seriously? Knock it off. You are currently holding about US $21.66. Fortunately in Argentina, the bills translate pretty well to a denomination Americans are used to handling. But its very easy to get distracted because you'll never again see a price in USD.
Mental gymnastics become the order of the day. Every time you see a price, you have to do a rough calculation and decide if that price is appropriate. If you're staying for a long time, it becomes easier to ballpark these things because you can spot somethings that are generally priced higher or lower than you are used to and you can instinctively purchase or avoid them. For instance, anything electronic in Argentina carries a 100% import tariff if it wasn't assembled in Argentina from more than 12 pieces.
(Interesting sidebar, electronics companies in Asia will fully assemble their goods, as normal, and ship them to Ushuaia, Argentina. During the voyage, the company (Samsung for example) will pay a crew of who-knows-who to disassemble these various computers and TVs and things into 13 pieces. They will then be offloaded in Ushuaia, the closest port city to Asia, and taken to a warehouse where they are then reassembled. Often by the same people that took them apart. But since they were assembled from more than 12 pieces in Argentina, they are excluded from the import tariff and stamped with a "Industria Argentina. Fabrica en Ushuaia" sticker. All for a lower cost than the 100% import tariff. Technical Barriers to Trade, anyone?)
The bottom line is, if you can't do the currency conversion in your head, carry a pocket calculator and MEMORIZE the current exchange rate. If you're staying a long time, check in on the rate to see if it has changed.
If you don't take the time to do these calculations, you will definitely spend far more than you anticipated. For example, Argentina isn't nearly as cheap as it once was. In 2009 it was easy to have 2 meals a day, a room in a hostel and a few beers with friends for $20 a day. Now, $20 will get you your meals, but anything over and above will cost you more. Emerging economies, eh?
Bottom line: Keep an eye on your budget. Know the exchange rates. Force yourself into the math for every transaction. And hopefully you won't let all of that get in your way of having a good time.
For those of you in Minneapolis and Seattle, I will be back in the states starting the 24th until the 1st. MPLS 24th-28th and SEA the 28th-1st. I hope I can catch up with everyone in that time, especially those of you in the cities that I didn't get to see last time around. Take care, I'll probably post once or twice in the next week and half, but if not, I'll catch you all in Hong Kong!
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