The meltdown and me

Time for me to bow to the inevitable and finally mention the economic meltdown. In some respects, I’m quite pleased about it – I’ve never been able to afford to buy a decent house in London, so falling house prices mean there’s a good chance I will be able to buy when I return in 2010. Plus getting out of my job on my own terms during a recession means less worrying about job security. Best of all, I get to escape constant discussions of the situation in the news for a whole year.

But there has been one impact so far: on my savings. I originally calculated my savings budget based on needing $50 a day spending money (excluding travel costs, visas, insurance and so on). At the time, the exchange rate was $2 to the pound. Being sensible, I calculated my savings based on an exchange rate of $1.70 to the pound, meaning even with a 15% drop in the pound’s value I’d still be fine. Less than that, and I’d end up with more than I’d budgeted for. I figured I was being pretty cautious there – until now. Today the exchange rate is $1.73. Some people are forecasting it could drop significantly further over the next few months.

If it drops much further, I’ll need more money (which will then eat up some of the money I plan to have saved for when I get back). Around £800 for every $0.10 drop in the value of the pound. I could exchange money now, but then I’d be losing out on interest (as interest rates are better over here). Or I could do nothing and hope the pound stabilises around its current level. It’s the unpredictability that’s killing me.

And one final note: I know you’ve been waiting ages for this, but please no gloating from any US-based travellers in the comments box!

3 responses to “The meltdown and me

  1. I wouldn’t worry about to much, you nor I have any control over it. When I first entered Turkey the Lira was 1.18 to the Dollar, it was low, but that is the way it was. Now the Lira is 1.50 to the Dollar. Sure that is great, although the exchange rate can change anytime.

    $50 a day is plenty, most places you should be able to get by with $30 a day. What will matter is the transportation costs in the country you’re visiting.

    If you’re willing to stay at the bare budget hotels $30 with buying food should be no problem.

    With the transportation cost and hotels and food in Eastern Turkey for one month I still got by with about $35 a day, that was with the bad exchange rate.

  2. I also would not worry too much. Everything is cheap in the US anyways….it won’t matter too much.

  3. I’ve been ripped off online for the first time and am unsure if it’s because the company has gone/is going bust because of the global economic crisis or just because the owners were thieving scumbags. Maybe a bit of both.

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