Tag Archive | "money"

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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 🙂

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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.


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Managing money in Spain

Posted on 08 May 2012 by American expat!

Banking in Spain

Don’t stress about banking in Spain, it’s the one thing I can say they are very efficient at. Unlike in the US, there are no wait times on deposits nor transfers – they are instantaneous. The most popular bank in Catalunya is Caixa Catalunya, after which is probably La Caxia. All you need is a passport to open an account if you are a foreigner. You’ll pay a service fee of 5 Euro a month. If you have a NIE, the fee is waived. Online banking is great, though not necessarily well translated if you choose their English version, but easy enough to navigate and again, transfers to others or to pay bills are instant-no waiting.

Cheap method to transfer money between the US and Spain

If you don’t have an income in Spain, or need to occasionally transfer money to your Spanish account, transferring money from your US bank account to your new Spanish account will cost you about 40-45 dollars a pop. That’s because you have to buy a bank wire. There are not too many alternatives that cost any less, however I DID find one way that takes a lot longer but is far cheaper. If you plan ahead this will work for you.

You will need two Paypal accounts. To open a Paypal account you need a unique email, so use your current email and link it to your US account, and then just create a new gmail/yahoo/hotmail account to set up another Paypal account linked to your Spanish bank account. Once you get them validated, you can gift yourself money from your US Paypal to your Spanish Paypal.

Be sure to mark the transfer as a GIFT, otherwise you will pay Paypal’s high commission rates.

This works, I did it for over a year. Paypal will contact you once you reach 2500 dollars in transfers to make sure you are not laundering money. You will have to prove you own both accounts and have an address in both places. Don’t worry they won’t close your account. They want the money. I still use this method on occasion and it works just fine.

EDIT: As of November 2014, I have stopped using Paypal for my transfers because of their conversion fees. I now recommend TransferWise.  The cost to send from US banks is a flat $15 for amounts over $1500. Read more about it here.

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