Today I want to share with you one of my favourite currency exchange tricks to help save you money. Like many tips, tricks and hacks, they’re actually blindingly obvious… once you know them.
Exchanging money is one of those areas where you can blow a small proportion of your travel money if you’re not thinking straight.
A few months ago, I needed to change foreign currency in Taipei. Having checked out their rates for USD on previous trips, I just assumed that I’d get a great exchange rate at the Bank of Taipei. As a result of running out of time to change my money in Vietnam, I’d brought nearly all of my foreign currency in Vietnamese Dong to exchange into Taiwan Dollars. Landing at 6am in Taipei, I headed straight to the bank’s airport branch to exchange my Dong.
After a midnight flight, I was very tired, but not too tired or lazy to not check the exchange rate using one of my all-time favourite currency exchange hacks. The teller showed me the exchange rate for Dong (which consisted of a crazy number of zeros), and I entered the numbers into the XE.com currency app. The app showed an implied commission of 28.5%! Yes, that’s right. Thats almost one dollar they take in commission for every three that I exchange. If I exchange $300 with them, they’d take nearly $100 in commission! That’s good work, if you can get it!
I showed her the commission rate displayed on the app, and said that it must be some kind of mistake. She replied it wasn’t. The teller said the Vietnamese Dong is not a popular currency, and so the commission rate is higher. To be honest, I had expected at the outside the commission might be 3.5% or 4%, and I was happy to wear that. However, I had never in my wildest dreams imagined the bank would be taking almost one third of my money. Thankfully, I was carrying a few US dollars as a backup, and was able to change them at around 1.5% commission.
Back to the tip.
I figured this one out one day whilst watching a constant stream of people walking in and out of this nondescript corner shop in Siem Reap. I wondered what their business was, so I walked over to find out. It was a currency exchange shop. Loads of tuk tuk drivers would go there and change their US dollars into local currency. It dawned upon me that for many years I’ve been asking the wrong question.
When I want to change money, typically I would ask someone: ‘Where can I change my money?’
The power question, however, would be: ‘Where do YOU change YOUR money?’
To be fair, another equally powerful question would be ‘Where do I get the best exchange rate?’ However, I don’t think I’d always been asking that.
And the important thing for me, is the reminder that a small change in how I think or what I do, can lead to a massive change in the outcomes I achieve.
Locals, like these tuk tuk drivers, know where to get the best rate…and they were going there in droves. If I asked my original question, they might say, at the bank, at this guesthouse next door, or somewhere else that wasn’t necessarily even a competitive price. It would be an honest answer, but it might be one which cost me a chunk of cash.
The final part of this tip is that I try really hard to buy my goods and services (including currency exchange) from locals or people that I like and want to support. I want to spend my money at places I hope to see there next time I return. Sadly, there are many places I return to on later trips, and they’re no longer there. While that is the nature of life, it is also a reminder that if we like things, we have to support them with our money. By carefully choosing where I spend my money, I know that in some small way I’m supporting the business owners, employees, and their families. Sometimes, these places aren’t going to give the lowest price.
Also, occasionally, there are people that I just don’t want to support with my money or custom. So, in terms of this tip, I won’t automatically change my money at the place which offers the lowest exchange rate. I have to want to do business with them.
In Vietnam, I found another one of those money exchangers (depicted above), where there’s a constant flow of people coming and going all day. This shop offers some of the best exchange rates in town, and I really like the people in the store. That business ticks off both requirements I have for changing money, so I’m happy to be a regular customer.