Do You Think In Pesos?

[Dave Hounddriver]

The first time I ever came to Philippines, the old-timers told me that it is important to stop thinking in terms of dollars and start thinking in Pesos.  It was good advice at that time.  It was important to stop thinking something like:  "That taxi ride was only $10, cheap compared to what I am used to."  Instead,  I needed to start thinking like a local: "That will be a 470 peso taxi ride and the V Hire is only 50 pesos so I better watch myself if I want my money to last as long as possible.

 

Now I find myself going against that advice.  I had an argument with a long time friend who says it is still good advice to think in pesos and he refuses to listen to any discussion where I think in dollars, so I am trying to explain it here.

 

In the beginning a new expat has to learn to think in pesos to learn the value of a peso.  But after years of living here with a foreign income, you have to learn that your pesos are directly linked to the value of your dollar.  For example:  A year and a half ago, my long time friend and I had the same budget.  His US$100 would buy 4400 pesos the same as my CDN$100 would buy 4400.  Now he has discovered a windfall and every US$100 gives him a 'free' 400 pesos on the exchange rate.  On the other hand, my CDN$100 now only gives me 3200 pesos.

 

So if I had continued to think in pesos, I would run out of money.  But unless your currency is depreciating you will never see that.  My friend doesn't see it.  Do you?  Do you think in pesos now. or in the currency with which you are paid?

 

 

[jpbago]

   I think in pesos to keep it relative to living in the PI but I usually convert it to dollars for comparison. ie: Bacardi Gold varies from 305p to 385p but in Canada, it is $30 so I can drink 3 times as much here.

[not so old china hand]

My first boss, a Canadian, gave me the same advice years ago "Always think in local currency." I've followed that advice pretty well all the time I have been an expatriate, now approaching four decades, and I have found it answers well.

Over that period I have sometimes been paid in Sterling, sometimes in local currency, and sometimes I a combination of local currency and US dollars. In some countries there was a vast gap between the official and black market rate for the local currency.

I find that what works best for me is to determine my monthly income in local currency and then forget about my home currency.

Now my pensions are all in Sterling so when I start drawing them my income will fluctuate due to currency variations. However since my current income is fee based I'm accustomed to fluctuations.

We shall see how I get on when I finally retire.

Sent from my iPad using Tapatalk

[robert k]

Both, plus barrels of oil. My GF in sibulan would go to buy my 1.5L coke (usually two plus a sprite as we were at her families house) and buy it at Birdies bake shop where it was 50php. One day we walked ten steps farther because we needed to buy some groceries and I grabbed a 1.5L coke and found it was 47 php in that shop. Literally ten strides farther. I asked her to buy my cokes there from now on. The thing is, I would walk the extra distance to save 3php but she who had not a piso to her name except what I gave her would not walk that extra 10 steps. Go figure. I guess if you don't earn the money you don't know where it comes from and have no respect for it. I don't consider myself a cheap charlie. I will pick up the check for a group and tip for good service. But I will walk an extra ten paces to save 3php. :tiphat:

[lyno 47]

I think in php but always do rough calculation back to $au as Dave posted you need to keep an eye on your home countries currency otherwise you can blow your budget.

[mogo51]

The first time I ever came to Philippines, the old-timers told me that it is important to stop thinking in terms of dollars and start thinking in Pesos.  It was good advice at that time.  It was important to stop thinking something like:  "That taxi ride was only $10, cheap compared to what I am used to."  Instead,  I needed to start thinking like a local: "That will be a 470 peso taxi ride and the V Hire is only 50 pesos so I better watch myself if I want my money to last as long as possible.

 

Now I find myself going against that advice.  I had an argument with a long time friend who says it is still good advice to think in pesos and he refuses to listen to any discussion where I think in dollars, so I am trying to explain it here.

 

In the beginning a new expat has to learn to think in pesos to learn the value of a peso.  But after years of living here with a foreign income, you have to learn that your pesos are directly linked to the value of your dollar.  For example:  A year and a half ago, my long time friend and I had the same budget.  His US$100 would buy 4400 pesos the same as my CDN$100 would buy 4400.  Now he has discovered a windfall and every US$100 gives him a 'free' 400 pesos on the exchange rate.  On the other hand, my CDN$100 now only gives me 3200 pesos.

 

So if I had continued to think in pesos, I would run out of money.  But unless your currency is depreciating you will never see that.  My friend doesn't see it.  Do you?  Do you think in pesos now. or in the currency with which you are paid?

 

 

A good post Dave.  I have gone through the same transition as you here in Thailand.  We are both suffering from low exchange rates. AUD is down 20% an it will be the same in pesos when we get there, if things remain the same.

 

But I can now determine whether something is ok value in both dollars and bht.  I do a monthly budget in bht but always relate that back to dollars, because that is what my money is!  There is no logic when it comes to foreign exchange - I am totally convinced that we are just being manipulated by the big players.  I wish they would outlaw foreign exchange speculation.

[Larry45]

Naturally, I think in dollars with business and banking in the US, but for all Filipino based expenditures, I'm always thinking in pesos.    I don't convert back to dollars to judge the value of something anymore, but I do sometimes to marvel at the low costs.  "Wow...I just had lunch, a massage and a bottle of rum for $7!"    :cheersty:

[Mike S]

Other than when I write J a monthly check based on my US bank do I use dollars .... once that check hits the local bank it is everything in pesos from that point on .... for instance if I send over $500 it comes here as $500 and we exchange it for pesos at the local exchange if the rate is 47 to 1 then our money to spend for the month is p23,500 .... if the rate is 42 to 1 then we have p21,500 .... so it makes little difference to me as that is all I can spend for the month regardless of the US dollar back in the US ....

 

We have a few dollars in a checking account to fall back on here should we really need to but 99% of the time we live on what I send over and it is the same amount each month unless like this month I need to clear some money build up from my US bank accounts and that money goes to the kitty to be used at future dates if needed ....

 

I like to keep most of our money here both in dollars and pesos as I can get to it if needed .... but that is just me ....  laws can change in a twinkle of the eye in the US when it comes to getting or transferring money to a foreign country and I don't plan on getting caught flat footed .... plus the IRS and other governmental agencies have been know to freeze US bank accounts and then you would be in a world of sh*t ..... JMHO .... :thumbsup:

:cheersty:

[Onemore52]

Being a newbie here in the Philippines I am continually comparing Aussie dollars and the U.S. dollar to the peso, only to work out how much it is going to cost me to live in P.I. on a permanent basis.

 

I was trying to get some information from another thread that was elsewhere on the forum about the cost of living in P.I. but gained no information from it.

 

One thing is for sure and it didn't take me long to figure out the fact that I am going to live a lot longer and a lot more comfortably than in Australia.

 

As a side note, I am still employed in Aussie for a few more months until retirement, last month we were given an incentive to get a job done quicker, with the prize of 6,000 dollars. So everyone worked that little bit more harder to win the bonus and we did it, with the net figure to us of $2770 dollars, the rest went in tax..

 

Go figure.

[AlwaysRt]

I bounce back and forth until I have an acceptable monthly budget. To help understand local pricing I pick something like the cost of an acceptable (to me) local breakfast and use that as a comparison as to what seems overpriced or not. I try to spend like a local, not a glassy eyed, 'gee that's cheap' foreigner - who overpays for everything and screws up the economy in the process.