An American friend of mine lives overseas with her European husband & 2 kids. She emailed me asking for suggestions on how to run a budget & manage savings while handling 4 different currencies. I'm not really sure where to start, I know we have some financially savvy folk on here. Any thoughts?

The set up:

They have 9 bank accounts between them

A mortgage in euros

Salaries in Swiss francs

Living in British pounds

Buying a lot of things (clothing, home items, electronics etc) in US dollars


Sounds like a job for an accountant but wasn't sure if there were some handy tools out there. I think this is beyond the scope of mint.com...

8/14/2012 11:26:31 AM

I dont understand how the multiple currencies is causing a problem with budgeting. Is it the exchange rates? Cant she just convert them with a calculator to one currency and budget this way or set up a spreadsheet with formulas that will do this automatically for her.

8/14/2012 12:57:03 PM

Yeah, I would just set up a spreadsheet or something and convert all numbers to one currency and just go from there. Doesnt sound like that big of a deal really.

Also, why the hell do they have 9 bank accounts? They need to consolidate that shit.

8/14/2012 1:32:12 PM

Quote :

"convert all numbers to one currency and just go from there"

8/14/2012 2:51:07 PM

Quote :

" She emailed me asking for suggestions on how to run a budget & manage savings while handling 4 different currencies. "

I know you seem to be financially savvy, and this is probably why she reached out to you, and I would suggest doing what I do when co-workers and the like come to me for financial advice-- redirect, redirect, redirect.

It's flattering, and we tend to want to help when we can. It's a lot like being that computer savvy person who installs a printer for their aunt, and then before you know it, you become the IT dept. for the entire extended family and then they get irritated when you can't drop what you're doing whenever they get malware. Anyway, It's one thing to give quick tips and surface level discussions, but helping someone plan their whole budget is probably something you want to avoid.

8/14/2012 4:25:49 PM

^ absolutely! She reached out to me because I tend to also be resourceful. In no way does she expect me to help her design the budget. She's looking for ideas and tools. I think the excel thing is a good idea. I guess she'd have to update it every so often as rates change pretty frequently. Or is there some fancy excel way to auto pull that info?

8/14/2012 4:43:42 PM

She needs to talk to a financial advisor to make sure she and her husband know what they've gotten themselves into. Situations where you owe/spend money in one currency and make money in another can go bad pretty quickly.

8/14/2012 6:56:46 PM

I don't know why it's so complicated. I earn in USD, I live with expenses in CNY & I save in USD/INR. I only convert as much USD into CNY as much as we need for our living expenses in China. Saving in two currencies is to hedge one against another.

8/16/2012 10:59:49 AM

I think the problem is in the long term not necessarily the short term planning. Shifts in currency can wreak havoc. I work for a German company with a lot of Germans living over here but working on german contracts. If they buy a mortgage in USD but a large quantity of money or income from Euros then the shift in the exchange rate when they bring it over to the US could be differences of thousands of dollars depending on when they do it.

For instance, in a 1.5 year span the Euro went from .65 USD/EURO to .83 USD/EURO, so if you took over 5000 EURO earlier you would have 3250 dollars but if you waited you would have over 4000 dollars.

The problem is you don't always have a choice of when you need the money to wait for a good exchange rate and if you plan at a high rate and it goes down.

8/16/2012 11:50:12 AM

^Bah, got some bad conversion info above but the point stands.

8/16/2012 12:32:00 PM

Yeah, probably some sort of spreadsheet that has a single spot to plug in the current currency exchange rates would be the best. That way, they can calculate their own risks on what assumptions to make.

Problem is, simply using the exchange rate at any given moment isn't going to work given how wildly these rates can fluctuate especially given the current state of the US and European economies. Better to let them decide which rate to plan at and then let them figure out the risks.

Yeah, my employer has an entire department of people who deal with currency risks across our supply chain. Not easy especially when you're trying to forecast over a decade.

8/16/2012 2:53:07 PM

This will help.

http://www.wikihow.com/Create-a-Currency-Converter-With-Microsoft-Excel

8/16/2012 6:37:23 PM

http://www.swissinfo.ch/eng/business/Franc_mortgages_cause_pain_in_Europe.html?cid=30737844

8/16/2012 7:23:06 PM

^ one of the reasons Hungary is fucked.

8/17/2012 11:05:12 AM

dealing with all those currencies seems like a royal pain in the ass

8/17/2012 4:02:45 PM

Why budget at all? Buy what you need and save everything else.

8/18/2012 10:45:08 PM

I was just about to post the converse::

Why budget at all? Save what you need to meet your savings/investment goals; spend the rest however you want.

8/19/2012 10:18:01 AM

I have this problem but I don't spend more than I can afford so I don't need to budget.

8/19/2012 2:25:57 PM

^^Not exactly the converse, but I'll take it. Same deal, but with different emphasis. I just like padding the savings because of uncertainty.

http://www.moneysense.ca/2011/11/18/why-budgeting-doesnt-work/

8/19/2012 4:30:29 PM

Thanks for the links, I will share them w my friend

Their house is in France so it's in euros, they just get their paychecks in Swiss francs. And to answer the budget question, they have two young children & a budget is their prerogative. Also, they enjoy travel & I'm sure the budget is more for planning trips & shit & realizing how much it impacts their bank accounts

8/20/2012 9:38:14 PM

do people with 9 bank accounts need to budget?

9/19/2012 6:20:55 PM

I'm not sure what multiple banks has to do with it, but I think everyone should budget

9/20/2012 9:00:45 AM

Just convert it all to bitcoins.

10/1/2012 10:35:58 PM