Archive | Money

Currency conversion fees – Possible solution?

Posted on 07 November 2014 by American expat!

If you have been reading this blog, you know that for six years I have been transferring money to myself from my US bank to my Spanish bank via two Paypal accounts. For those of you who don’t know, I freelance primarily in the US and Canada and am paid in US dollars. So I need to get money to my Spanish bank account without paying stupid amounts of money for wire transfers on top of currency conversion fees.

My solution was to use Paypal, as it was the easiest and cheapest solution I could find, though their currency conversion fees are not stellar. For example, the actual rate at the moment is $1 = €.81 (which is really good, you should be converting your currency NOW), but the Paypal rate for payments is €.77 and balance conversions is €.78. Which, if I send smaller amounts, isn’t horrible but if I send even $2000, the cost is about 50 dollars. Which is too much!

So, I found a new potential solution called TransferWise. I’m trying it out right now. The total cost to transfer and convert up to $1500 is a $15 dollar flat fee. For transfers up to $4999.99, the fee is 1% of the amount sent (so up to $50). Over that and the fee goes down to 0.7%. So, for a $6000 transfer, the fee would be 1% for the first $4999.9. Then for the additional $1000.01, the fee would be 0.7%. This means the cost would be $57 (50 + 7). But how much would a wire transfer cost for that amount? I think it would only be $45 dollars.

But…your first transfer is free if you sign up, so I think you can transfer ANY amount for free.

Let me know if any of you sign up and use this service, I will report back here if I find any hidden fees or problems. It might be a good solution for transferring smaller amounts (under $5000).

Update: I’ve used this service and found it to be cheaper than Paypal (due to TransferWise using the actual, current exchange rate) if you transfer small-ish amounts. I just transferred $1700 and it cost me nothing – because your first transfer is free. That transfer right there would have cost me close to 50 bucks! That right there was worth the sign up. I am going to keep using it amounts less than $3000 or so.

Update #2: If you sign up with this link, your first transfer is FREE! That’s like free money 🙂

Comments (7)

Salaries in Spain

Posted on 26 July 2014 by American expat!

Salaries in Spain and How People Live on Them

I’ve talked about this topic before more or less in my Cost of Living in Barcelona post, but in this post I’ve interviewed another American expat for a little different perspective (though it turns out it is not so different than mine).

My interviewee makes about 2K a month by teaching private English lessons. That’s a decent wage here. She works about 20-25 hours a week, not including travel and prep time. She will work out of people’s homes or set up meetings in cafes.

I started the interview by bringing up a well known fact: Many people in Spain and in Barcelona live on 1000 -1500 Euros a month salaries (salaries are monthly here and they receive 14 of them – a double payment in August and in December). My interviewee took it from there:

“Yep, 14 thousand bucks a year people are living on. Can you live comfortably at 1100 or 1200 Euros a month? Yes…comfortably means you are going to share a flat, eat moderately–Euro style, not American style–meaning eat at home most days, or else go for cheap tapas places, and you’re going to know all the places that are 5 euros and under, and you’ll still have a nice social life.”

I asked about what kinds of activities one would be able to do, and what would need to be to scaled back.

“If you make 1200 a month, you’ll still do stuff, but again, you’ll eat moderately, not American style, because its more expensive here and the portions are smaller. You’ll take your lunch or go home to eat lunch or even dinner. You’ll buy food a the grocery store and prepare it at home. When shopping, it’s different and can be cheaper because things are not pre made for you already like in the US. So you don’t pay for all this packaging and pre-chopped or separated stuff. You buy mostly fresh, and it’s all local so it’s quite cheap.”

For your leisure time…You’ll have some cheap drinks before you go to the club…then you just do some budgeting to take some travel or other leisure time. You could say that it’s the equivalent to the US standard of a University student standard of living. But that’s how Europeans live-they live in smaller spaces, they are on top of each other, and it’s OK. Europeans live smaller in every way, but their social lives are much richer for it, because you just walk out into the street and pay to be entertained: Picnics with friends, free concerts, free movies, neighborhood celebrations and events, free everything. There are a tons of free city sponsored events, especially in summer, and Europeans take advantage of it.”

“In terms of space…everything is like 50 percent smaller, or even more. No one has dryers…So, because of this, you can live a comfortable Euro style life and on 1200 a month you’re basically fine. And if you are making 1500 or 1600, you are golden.”

My next question was one that I imagine my readers would ask: What about if you don’t want a “University student lifestyle” and want your own space?

“If you want your own space, you better have a decent job, like in technology or a US company that has an office here (HP is a big one in Barcelona) because rent will be like 700 to 800 Euro or more for a one or two bedroom space. And then you still have to pay electric and gas–if you even have gas [Note: many places don’t]. And you’ll need money down. One month’s commission to the agency, because you will use an agency, and then two months rent deposit. You’ll need a NIE to get your own place most likely. An agency wants to see your income, they need to secure as much money down as possible. As a language teacher, not unless you work for an academy that is giving you a long term contract with a salary, you won’t find an agency that will give you your own place. And then you are going to end up renting a room.”

So what’s the cheapest room a person can find? And would you want to live there?

I’ve seen some rooms that go for as little as 300–that can’t be good place though. That’s an interior room with no window, and it will be a closet. And you’ll be sharing a bathroom with 4 other people. And everything else. But a place in the center, or a desirable part of town [near the Parc Ciutadella, Gracia, Eixample Izquierda], or with your own bathroom and/or balcony or terrace…You’ll  pay 400-500 on average. Depending on how nice the place is and if it has natural light, a lift, has been renovated, is big, is full of other people, it can go up or down from there.

I hope this interview has shed some light on what you can expect to find in Barcelona and the other big cities in Spain. Rent takes up a big portion of people’s salaries, which is why you will find 35 year old’s still living with their parents. Of course, outside the city, property values and thus rents are much lower, with a few exceptions.  But then…you are outside of the city.

 

Comments (9)

The cost of living in Barcelona question – answered!

Posted on 09 February 2013 by American expat!

About once a month in the winter and once a week during the 3 other seasons, I receive a question regarding the cost of living in Barcelona, usually in the form of: “What do you think is the minimum someone needs to earn per month to live comfortably in Barcelona?”

Sometimes there is more to it, such as: “What are the initial costs? How much money should you set aside in order to make the move?”

And then I receive more specific variations, such as: “How much would you estimate a 2 bedroom, 1 bathroom apartment somewhere close to the metro and not anywhere touristy would cost?”

And finally, I occasionally receive the very specific: “What does it cost to house a family of four in an area with good schools within an easy commuting distance?”

These all sound like reasonable questions, and I could fairly easily answer them – if they were regarding any city in California. Things are more consistent there, whether good or bad: There is no question that you need a car. People generally live in houses, with yards that need tending, or at least in condos with HOAs. Salaries are high and so is the middle class standard of living. Most people live in the suburbs and work in business parks. People spend a lot of money on entertainment in its various forms.

But it all varies here, and it is hard to answer those questions from other Americans because regardless of what your initial expectations are, your standards, your tolerance level and your lifestyle are all going to change here. (If not, you are probably not going to stay long.) And I will venture to say that if you currently have an extremely high standard of living, none of this will apply to you, but then again, you aren’t going to be asking these questions in the first place, you’ll just pay whatever it takes to create the lifestyle you want.

The answer to the first question actually (regarding living comfortably) has a standard answer here in BCN, which I’ll get to in a second. For Americans, to even define “live comfortably” is totally subjective.  Does that mean a room in a shared apartment? Does that room need a window? Or do you need your own place? Does that place need to be larger than a studio? Do you require an elevator in the building or are you fine hauling your stuff up 5 flights of stairs? Are you expecting things like a dishwasher and a clothes dryer?  So the general consensus here in BCN is that one needs to earn 1000 Euros per month to live comfortably. That usually means sharing a place with others, as most people do, though you can find tiny studio apartments, or slightly bigger places on the outskirts of the city for 500 a month or so. Most places come furnished, in fact it is unusual to rent a place that is not.

Which brings me to the second question: how much $ to set aside? Well, you’ll need at least three months deposit if you will be renting your own place, and one or two to move into a room (usually just one is enough). But after that, it all depends on what you will be doing here. Do you have work already? Then don’t sweat setting aside a bunch of money, you won’t have a ton of expenses- more on that in a minute. Do you have expenses back home that you will need to cover each month (as I did)? Do you plan to travel? Do you need to find work? Then I suggest setting aside 4-5000 Euro to keep you afloat while you set something up.

The third question is likely the easiest. Though it depends on the area. A two bedroom, 1 bath apartment close to a metro and outside of the city center will run you between 800-2000 a month. More expensive as you head up toward Sant Gervasi/Sarriá and in areas like Gracia and Le Cort. Cheaper if you head up the other side of BCN, like el Clot, la Sagrera, el Guinardo. Cheap as you get closer to Montjuic (you’ll be in its shadow), and moderate near Sants or the beaches around Poble Nou . Just keep in mind that second bedroom may be closet sized.

For the last question, I only know of one school, because only one friend of mine has a child. Her son goes to an American school in San Cugat, which is an expensive place to live, but she takes him to and from school on the train. She lives in Sant Gervasi area in a flat with three or four bedrooms and pays maybe 1600 a month? It’s a big place though, and it is the only flat I’ve seen with a working dishwasher!

Edit: The American school he goes to is a private school, but teaches classes 33% in Catalan, 33% in Spanish and 33% in English. I understand that all schools here by law must instruct a minimum of 33% of the classes in Catalan, and public schools are required to teach between 50% and 70% in Catalan.

If you were happy to hear that one can live comfortably on only 1000 a month here, you might be shocked to know that this is what many people live on per month, in fact, it is kind of a goal that is aspired to for non-professional workers. That generally includes English teachers. Professional work (i.e. one that requires a special degree, training or experience) will be about double that, maybe a little bit more. (I know, right? This is why I freelance for North American companies.)

But don’t freak out and say forget it – You’ll have fewer expenses. You won’t need a car, thus no insurance, gas, parking and repair costs. You won’t pay to be entertained as much, you’ll just go meet friends for a cheap drink or coffee and walk around. Many people live without Cable or even TV. Utilities can be expensive, but people here are vigilant about turning off lights and wearing sweaters indoors. If you can change your thinking and lower your standard of living as far as material things go, it will be made up for ten fold in cultural exposure and a rich and active social life.

In closing, here is a tool that allows you to compare the cost of living in Barcelona to other cities. Beware that the numbers are based on median values that have been entered by strangers, and won’t necessarily reflect your standard of living or even area of town where you will live, but it is a handy resource nonetheless:

Cost of Living Calculator

Comments (24)

How not to budget your move to Spain

Posted on 15 November 2012 by American expat!

Whether you are in Spain for a finite amount of time and are interested in making a permanent move, have made the actual move and are living here, or have no plans to either stay or leave but week after week find you are still here (as was the case with me four years ago), whatever your circumstances that find you enjoying a simplified life here in Spain for a long period of time, you will likely find yourself collecting a simplified salary. The majority of Americans I know here are either freelancing remotely with US companies and work is intermittent, work for Spanish companies , or are otherwise engaged in hourly type work that only pays you for the hours logged (English teachers, for example).

Arrive without a Plan. What you do not want to do is come here without a plan for how you are going to support yourself–unless of course you have money to burn and don’t care. I wasted exorbitant amounts of money over the course of three and a half years paying for things I did not need to pay for, which I’ll cover below.

Rent your house for less than the mortgage. The biggest money suck I set up for myself was renting my house in California out–still full of all my belongings and with the bills in my name–for $1000 less each month than the mortgage for nearly two years until I figured out I wasn’t going to move back anytime soon, and that $1000 a month to store all my junk was a bit high. I finally sold the house and moved all my stuff into storage, which lowered my storage costs by $850 dollars a month–more if you count property tax. A year later, I moved it into my mother’s garage, but paid about 1K to transport it all 400 miles away. (I am not sure what I will be doing with this giant collection of belongings I do not use, I thought I’d buy a condo in San Diego to vacation rental out, but HOA fees are so ridiculous I can’t bring myself to purchase anything.)

Pay to keep your US phone contract. The next huge money pit was paying to keep my US phone number. This required that I pay a contract plus add on services for sending and receiving text messages. Never mind that I only sent or received around one or two a week, and received a call less than once a week on average. I still paid around 60 bucks a month just to keep the contract so I could keep the same phone number. My reasoning was that I used the phone a ton when I was in the US (true), I needed to have a US number for work (true), it had been my number for nearly ten years and all my friends knew they could get hold of me with it (true) and finally, I didn’t see another option. Unfortunately  when I FINALLY went to a pay-per-use card, I found out too late that it doesn’t work overseas, even though the sales person assured me that it would…though I did find a solution to that –which I will write about in a future post.

Don’t register your vehicles as non-operational.  I never registered my vehicles in the US as non-operative. I just didn’t think about it because I sometimes used my van and a couple of motorcycles when I went to visit, which was totally unnecessary. When I finally went to sell my van to my father –thank god he wanted it, who else would buy a tan soccer mom van with only two front seats and a gutted interior to fit motorcycles into the back–I had to pay over 400 dollars in back registration fees.

I fell into some of these because I never really planned on moving here permanently. But here I am, four years later, and I find myself more and more comfortable with my simple life here in Spain. So gradually I have eliminated all of my monetary obligations in the US that cost me more than they bring me.

But then again, it’s just money – it comes and goes. And if you want to make a more here and you feel like money is what is holding you back, you might want to examine that belief more closely and see if it is just an excuse because you are afraid to make the leap.  Life is short my friends, take a risk. Even if it means losing some dough. In the end, your experiences and adventures are far more valuable and memorable than a few thousand dollars.

Comments (0)

Salaries in Spain and the standard of living

Posted on 09 October 2012 by American expat!

Note: This was originally the last part of the post: Working in Spain but has been expanded and thus warranted (in my opinion) its own, albeit short-ish, post.

You know that moving here requires a change in your cultural expectations, some of which you will be prepared for and some of which will leave you shaking your head in disbelief and muttering to yourself “how can people live like this?” (Cases in point: The infuriating bureaucracy, the acceptable levels of inefficiency of most blue collar workers, and my personal pet peeve, Spanish TV).

One that you had better not let catch you off guard is the average salary for a white collar, knowledge worker position. Salaries for these types of skilled jobs are much lower in Spain than in the US and Northern European countries. This did not use to be a big issue here, as the costs of living were also relatively low. However, since joining the EU salaries in Spain have stagnated while housing, food, utilities and just about everything else have increased in price significantly.

How much lower I hear you ask? I am just going to tell it to you straight: Be prepared to take a 30-70 percent pay cut from your US salary. My last US salary was $75,000 a year plus benefits, 401K, three weeks vacation, etc. My last salary in Spain was EU27,000 (which converted to between $32,000 and $39,000 over the course of the year I worked there), and was considered a good salary–OK, I did get about 8 weeks of paid vacation and 5 hour workdays through the month of August, (but I also paid about 21% into the social security/public healthcare system–which I did not and do not use personally). But seriously – 32K??? That is a big step down my friends.

Now, this might seem like an immediate deal killer when deciding to live here, but what you won’t realize until you get here is that life is much simpler.  It took me a while to figure this out, but now when I visit my friends (who are essentially living exactly as I was before I moved here), the conspicuous consumption of the most inane shit is SO obvious to me, whereas while living there it was an invisible norm. For example, a friend of mine makes $115,000 a year. She is single, has no children, has paid off her student loans, and rents a two bedroom condo in downtown San Diego. The last time I visited her, she made a comment about needing to make more money, to which I responded “but what exactly are you spending 115k a year on now?” Mind you, she has no hobbies, and yet her answer was not shocking: Two gym memberships (one near her work and one near home). Manicures and pedicures every two weeks. Haircut and color every month. Car payment. About $100 on drinks and taxis home every week. A house cleaner every two weeks. Eating out 3x a week. Cable and Tivo. Multiple magazine subscriptions. Lunch in the office cafeteria every day. Fancy coffee 2x a day. New shoes or item of clothing at least once a week.

All of this is pretty standard for the average single, childless California resident. I had most of this and more, because I had a yard and pets and hobbies and sports and everything needed taking care of and maintenance. And yet none of it was essential, although it certainly feels like it is when you live there.

But I don’t have any of those things now, and I find myself going out at night far more frequently than when I am in California, getting outside for a few hours or more every single day, spending far more time with friends, going to the beach more often, participating in more activities and sports, exploring more cultural sights, museums and exhibitions, relaxing a lot more–and not even feeling guilty about it–just being more social in general, because that is what you do here, that is how the cities and neighborhoods are arranged.

I cannot seem to replicate this whenever I am in the US just visiting. It is too spread out, people and things are more isolated from each other, even down to how people work- in the US was have cubicles and walls and offices.  Here, you sit next to your coworkers at a long table, or facing each other at a desk. You can always see other faces around you.

And this is about as best as I can define it now. I miss the great US salaries. But giving them up, (temporarily, I hope) has shown me a way of life that, if not everyone’s cup of tea, at least has made this expat a lot happier.

 

Comments (8)