Monday, March 29, 2010

Teaching in London & Dealing With Foreign Exchange Rates

Money's been on my mind lately, much more than usual.  I know that the "global financial crisis" hit most places more than my own, so I'm very fortunate to have the job I do (recruiting teachers to work in London, England with Classroom Canada).  But, the British pound is dropping and the Canadian dollar is rising, and every day I check the exchange rates & shake my head...

So here it is. My honest two cents about dealing with the exchange rates.

Before I go on, please read these posts about money & teaching in London, England:

First off, if you decide to teach in London you will ask yourself how much it costs & if you can afford it. Well, for you - the pound is on sale! When I first moved to teach in London, the exchange rate was 1:2.5 which meant that every pound was worth 2 and a half Canadian dollars, and my Canadian money hardly took me very far.  I was ridiculously broke when I first arrived in London with all my savings, and cringed every time I spent a pound.  The mental math is heart-breaking and my advice to new arrivals was to "try to think in pounds & not dollars, or else you will drive yourself mad!"

Now, well...the exchange rate today is 1:1.52, which means that every pound is worth 1 and a half Canadian dollars.  For our American readers, it's basically the same since our dollars are practically equal these days.
So, for new arrivals to London, your foreign money goes much further these days.  It's like a giant bargain bin!

But for the teachers & teaching assistants who are now in London, well, they see it quite differently. They're earning pounds, and no longer think in dollars.  The exchange rates don't matter much when you're actually in London as you pay for everything in pounds, and then Euros when you travel, and since you earn pounds - you don't even really notice the difference.  If anything, the financial crisis has meant that prices have dropped, making groceries cheaper, and even lower rent in some areas of London.  So that's all fine & dandy.  

The problem is when you want to send money back to Canada or the USA, to add to your savings, or pay off student loans, mortgages, car payments...that's when the lower exchange rate will really hurt you.

My advice?  

See a financial planner/exchange rate specialist. That's what I'm doing this morning.  My questions will be: "What do I do with my British money?  Keep it in the UK and wait it out, hoping the pound will go back up and the Canadian dollar will drop?  Keep it in my offshore account?  Wait it out?  Or get it back to Canada before the rates change even more?"  

I know they don't have a crystal ball, but someone must know what to do in these situations, where a Canadian earns pounds & needs to send the money from the UK to Canada without cringing at the loss every time.  If you know who that person is, please let me know!

Now, for those of you who are now panicking about cost of living in the UK: don't. It's fine, you'll be fine, you'll travel, have money for rent & food, buy new clothes, go out on the weekends.  But if you're moving to teach in London to save money in Canada, well, I'd re-think that one.  But let's face it - you're going to spend most of your British pounds earned on traveling around Europe. That's just what you'll do.  That's what most of my teachers and teaching assistants in London do anyway.  

Any questions, thoughts, worries, concerns?  Please share your thoughts below.

Resources About Teaching in London, England
Classroom Canada website
Guide to Teaching in London: A Survival Guide for Canadians ebook
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Canadians & Americans in the UK blog

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Thanks for sharing your two pence!


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