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Published: November 26th 2013
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My Guilty Pleasure
Cream cheese brownie and Mexican hot chocolate? Yes, please! How a person thinks about money and its inherent value is largely reflected by the currency used. The numbers have a value but it's attached to a person's most frequently used currency. As a result, when traveling or living in a a new country, conversions are often made to understand how much "100" of a currency is. But, while this clears up any mathematical questions, it doesn't answer the question of the value of the money.
When I first moved to China, everything I bought was converted to USD in my head. "Only $5!" I'd think. "What a great deal." It would take a few months to realize that it was only worth half of that and a few more months to realize that 10 RMB wasn't $1.50 USD, but rather the cost of dinner in a noodle shop. As I started to learn the costs of things--real costs, not tourist prices--my view shifted more. Eating at the noodle shop or the like is how many people live day to day. It's not viewed as getting a good deal or a bargain. It's the norm. 10 RMB was an inexpensive meal. 50+ RMB was a good western meal of imported foods. 100 was a special occasion. Never mind that back in the US it would only buy a sandwich and fries at a neighborhood restaurant. That same 100 was a month's worth of riding the subway or a few months of mobile phone service.
When I went home for part of summer 2009, almost all shopping was converted to RMB in my head. Where would I get a better price for the better quality? After a few years, a Target trip for a year's worth of necessary items would hover around the $100 mark, rather than the $200-$300 mark. When I'd lived in the US, Target was often called "The Hundred Dollar Store," because most people, including me, had difficulty getting out for less than $100 a trip. And we went frequently.
When I traveled to different Asian countries, I converted prices to RMB, or dollars and then RMB. (Sometimes the math was easier that way.) While I knew how much I was spending from my budget, this never really took into consideration real costs of things in the country. Research only gets you so far. Getting off the well-worn tourist trail is easier said than done, but it's the only way to get a real sense of the local currency's true value. But this often takes more ambition and time than most travelers have or can afford. Pun intended.
Now that I've settled in Bangkok, the problem has reared its ugly head again. But because the exchange rate between the Baht and RMB is 5:1, I always feel like I'm spending far more than I am. What would have been a "great value" in China--maybe even a regular outing--seems expensive here, just because the numbers are bigger. 100 B for a meal is a bit higher than average at a local restaurant, but it's nothing an average, middle-class Thai can't afford. In China, it's 20 RMB, far less than I paid for most meals out. In the US, it's $3, which doesn't buy a meal at all. But because it's "100" it feels expensive.
Today I'm enjoying a homemade brownie and some of the best hot chocolate I've ever had. Both of these things are hard to come by in Asia and it's a real treat. It's costing me 200 B, or 40 RMB, or $6 USD. Not a fortune by any means, but the numbers keep throwing me. I feel like I'm spending a fortune on something wonderful and I feel a bit guilty about it. I shouldn't. Everyone needs an occasional treat! I'm living in Thailand and using Thai Baht, but my numbers are still Chinese. Until that part of my thinking catches up to the rest of me, I'll be struggling to know the real costs of things and their true values. And I'll probably be feeling guilty, too.
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Home and Away
Bob Carlsen
Just don't visit Vietnam where the dong is over 20,000/$...
Initially it feels nice to be a millionaire, but then spending hundreds of thousands for a meal feels very, very expensive. I like to review The Economist's annual Big Mac Index which converts the local price of a Big Mac to US$, thus calculating Purchasing Power Parity. This gives me a good idea of which countries are over or under valued relative to the U.S. Then I know to avoid Switzerland and Norway and visit Vietnam! They haven't taken the next step to calculate how many minutes or hours the average person in each country has to work to earn the Big Mac.