By Susan Birkenshaw
We first arrived in Huatulco in 2006 – classic all-inclusive tourists! We came with a few pesos in our pockets and walked into the resort a$$uming that we would not need any more than that! We were SO wrong! Even then the beautiful handicrafts were everywhere, the sites outside the resort were calling to us and the food that was so representative of Mexican flavours abounded. Credit cards were virtually unheard of at that time and finding an ATM that we could understand took two days! It is important to note that we have not been to an all-Inclusive resort since then.
What we have learned about handling money as we travelled is not really new – it does serve as a reminder as we choose to travel. The bubble of a$$umption is simply getting trapped in the idea that there will always be an ATM machine available and you will always have enough cash for you to spend!
As of this writing, the Mexican peso is sitting at $14.51 per Canadian dollar ($19.34 for USD). Keeping this information in mind is the most important lesson we have learned in the 10+ years we have travelling as entrepreneurs, as tourists, as retirees and now as new residents. The value of the peso is difficult to work through in my brain but making this transition is critical to not wasting money.
We fully admit that we were guilty of simply getting more money from our local machine even when we did not really check just how much we were spending. We quickly realized that we couldn’t go on day to day without knowing our budget and restraining our spending habits. This meant we needed to be very clear about how many pesos are in our dollars and how many pesos were needed for the basics (a litre of milk is 19 pesos or the equivalent of $1.30 CAD). We weren’t able to convert quickly in our brains. Slowly, we began to understand and accept that we were indeed learning a new language – we needed to learn the language of pesos.
To develop a pre-move budget and plan, we almost needed a crystal ball while trying to anticipate all the issues we might face in the first months of our residency in Mexico. For example, here are some of the questions we confronted:
· When we would actually move? The last day becomes a bit daunting!
· Would we be able to stay in our condo from the first night in our new town and if not, where would we arrive for our first nights in Huatulco?
· How much money did we think we would need at the beginning of our adventure? And then we added 20% to our estimate.
· What bank here in Mexico would be our new financial headquarters?
Who were the people who could give us referrals and how much actual banking would we be doing? We realized that our investments would stay in Canada for simplicity.
Our Canadian banker for day-to-day transactions happens to work for the same large bank that holds our investments. We wanted to get advice on how to access funds easily and in a cost-effective manner.
· We learned from him that international fees can take a large chunk for each transfer.
· We wanted to know if there is any value added to keep our funds all in the Scotia family – the answer is simply no, there are no formal international banking agreements between ScotiaBank here and ScotiaBank Canada.
· We wanted to create simple systems for us to access funds, and to get to know our international contact in Canada. Anthony speaks three languages
The first and most daunting (but truly not complicated) step for us in establishing new money habits in Mexico was to open a local bank account. This first required making a decision about which bank would best suit our needs. While we spoke to many people who had gone through the process of finding a bank they liked and felt comfortable with, we gravitated back to the ScotiaBank here in Huatulco. To get to this decision, we
· compared experiences between banks from friends and professionals whom we had come to know and trust
· asked many questions about maximum ATM withdrawals
· learned how to get around the fact that the Mexican banks do not yet have a straightforward system for e-transfers (of course, there are other ways of transferring funds to, from, and within Mexico, just not from your Mexican bank account)
To open an account you will need time, patience and the ability to speak enough Spanish to ask and answer banking questions or to hire a facilitator who will help you walk through the bureaucratic hoops – online banking is a different scenario here and takes even more time to arrange, so you may choose to do this on a separate visit.
· At the very least you will need your passport, residency card if you have one, proof of your local address (obtained from your landlord if you rent, your deed if you have purchased a home, or a copy of a utility bill with the formal address easily understood). We had experiences with this in other countries over time and found the more paper we arrived with that proved who we are and that we are serious about doing business here, the better.
· Be ready to put your signature to numerous documents and that signature MUST match the signature on your passport, so practice up – we were asked to re-do a couple of documents to get it correct
· Once your account is established, banking in Mexico is very similar to other systems world-wide, with exception of e-transfers – apparently this procedure is coming soon (they say).
A word of caution about ATM’s – they are not all created equal.
· Each ATM should be officially connected with the banking system or an individual bank; they will clearly display the emblems of Visa, Interac, Santander or Interlink.
· Find those that are linked with the bank that issued your debit card. This will help you avoid additional transfer and exchange fees.
· It costs as much to withdraw a small amount as it does a larger sum.
· Lastly, about ATMs and PINs – for the most part, Mexican ATMs accept only 4-digit PINs. If you have a PIN with letters or more than 4 digits, you will need to contact your bank before you come to Mexico.
As far as you can use cash for your purchases.
· In our experience, we have found that using pesos (cash) exclusively makes our life easier on a regular basis. First, we are able to negotiate a con efectivo (with cash) price – not necessarily a huge discount but it can help.
· Second, we have learned that in smaller businesses, the use of credit cards is not always appreciated, as they entail large fees and bureaucratic difficulties for the vendors, and the costs are often passed on to you the purchaser.
· As we continue to outfit our new home, we are often pleasantly surprised to learn the value of “Buying Local”. Everything we buy to add a unique flair in our home is carefully chosen from the local crafts people, greenhouses and markets.
· The local skilled carpenters and artisans have lovingly created beautiful display cabinets, shelving and wall hangings. These have been reasonably priced and done to our specifications with excellent quality.
· Unless you are in a large, corporate store (there are very few of these in Huatulco) do not try to use American dollars; it is very difficult for a local, small vendor to provide correct change, it is a time-consuming process and it costs a large fee for them to exchange these funds. In my opinion, it is simply unfair for us to expect exchange on the spot.
Finally, learning the language of pesos encourages me to acknowledge all the services that I receive in all walks of my life here in Huatulco. The folks we have come to know well include the personable and hard-working pool man, the bagger at the local grocery store, the taxi driver who willingly comes to find us wherever we are, the cleaning lady who is also our laundress, the servers at our favourite restaurants and so many others. These people receive low minimum wages – the grocery store baggers are not paid at all – and depend on the tips we give to acknowledge the service we receive.
As with any new language, the critical step is to use it. In becoming fully comfortable with our new language of pesos, we had to do two things. First learn the words of money – dinero, effective, pesos, and of course the numbers. Second, be willing to speak “pesos” – use the language and learn the value (to you) of pesos. Don’t get trapped in the bubble of a$$umption that leads to wasting money and a lack of confidence each time you go to market. Also, don’t forget that ultimately, we are guest is this beautiful country of Mexico – learning the language of the peso is a way for us to show respect for the country and people who have welcomed us.