Exchange rates and your budget

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Posted (edited)

After reading OMW's post about exchange rates :

 It shows that the rate has not dropped below 40 pesos in almost 20 years.

Was wondering what rate should you base your budget on? Me I think to play it safe would be basing it on about 45p to $1 usd. Do you think it is a fair number or should I even go lower? Would love to hear some thoughts from everyone.

Have a great Memorial Day weekend. And for those from the US don't forget to take a moment and remember those who paid the ultimate sacrifice for their country.

Edited by marine6357
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Posted

I thought of this in the past and tried to find a number which is the lowest conversion I could live with.  A few years ago I thought that number would be 43.  However, I thought if it ever got below 37 I would have to consider other options.  That was then and now things have changed.  I think we can adapt to even a lower exchange if need be.  Would not want to, but could.  You will soon find out like every other question posted there will be as many varied numbers/answers.  The 45 does seem like a good number to base your budget on and should be safe for quite a while.

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Peso rate dollar rate and with me the English pound rate goes up and comes down, what ever it will be once we are living there we will cut our cloth accordingly to what we have too.

In the last 9-10 years i have been involved in the Philippines the exchange rate has not changed much, but what the future holds who knows.

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Budgeting can be tough where exchange rates are involved, but keep in mind that prices will also fluctuate along with the rates.

I think the first time I came to PH was in 95 and the rate was around 25.  Regardless, I thought everything was dirt cheap.  Now things are not so dirt cheap, even though my exchange rate buying power has gone up to 52+.

Before I moved I did an early retirement budget in dollars and hoped it would be ok.  I started in 2011 and moved in late 2012.  During that time the rate went from 44 down to 40, and I was a bit worried!  However, it reversed and has powered up since 2013.

45 should be worst case for a while, so that should work for you.

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7 hours ago, stevewool said:

Peso rate dollar rate and with me the English pound rate goes up and comes down, what ever it will be once we are living there we will cut our cloth accordingly to what we have too.

In the last 9-10 years i have been involved in the Philippines the exchange rate has not changed much, but what the future holds who knows.

Yeah Steve, the Ozy $ fluctuates sharply so I liken the $ to my wife's nickers, sometimes their up, sometimes their down, you just have to be on the ball when the time is in your favour. :shades:

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As a side note, inflation, though minor to most of us I think, is starting to eat away a tad at our advantage of the weak peso. The new TRAIN tax is starting to show in small ways. My barber for instance is raising his price 10 pesos. There are other small examples but as I said they are minor to most of us,,,i hope.

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Posted
11 hours ago, marine6357 said:

It shows that the rate has not dropped below 40 pesos in almost 20 years.

Was wondering what rate should you base your budget on? Me I think to play it safe would be basing it on about 45p to $1 usd. Do you think it is a fair number or should I even go lower?

My opinion?  What I do is base my "survival budget" on the lowest number it has been in 20 years (in your case 40 - 1) and my optimistic budget at the average exchange rate over the last 20 years which I think falls in the 44 or 45 to 1 category in your case.

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I could, since I will never retire deal with even 20 to $1...but I wouldn't. 

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