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A way to consider the dollar/euro exchange rate

A way to consider the dollar/euro exchange rate

Sep 24th, 2007, 06:47 AM
  #1  
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A way to consider the dollar/euro exchange rate

This is for everyone who is getting wacky about the exchange rate. Here is a way to consider it in real terms, the difference between last year and this year...

For every $100 you spend in Europe, it is going to cost you a cheap combo meal at Burger King. $1,000 is a meal for 4 at Applebys.

Every $100 you spend is going to cost you less than 2 gallons of gas. $1,000 spent is equal to about a tank of gas.

A $100 expense is less than a cheap bag of 6 pr. tube socks at WalMart. $1,000 is equal to 2 new DVD movies.

So, is your trip to Europe worth not having that one meal at Applebys or that tank of gas or those 2 DVD movies?

Just a way to put it in perspective. That's how I look at it, and I'm a cheapskate.



dave

daveesl is offline  
Sep 24th, 2007, 06:56 AM
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I love your post. I tend to look at things the same way. Here's how I look at the Euro/dollar exchange rate to help me justify my current travel plans (& future!).

A Coke Lite last year when we traveled to Europe was 1 euro. That was equivalent to $1.30. This year the Coke Lite will cost me $1.40 - ten cents difference. I don't consider that a significant difference.

Happy travels!
dorkforcemom is offline  
Sep 24th, 2007, 07:02 AM
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I'm sorry, Dave, but I don't understand your system much and I say that without any disrespect.

Every $100 is costing less than 2 gallons of gas??????

My own system consists of:

it is more expensive to go to Europe than it used to be.
Dukey is offline  
Sep 24th, 2007, 07:06 AM
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The major part of our travel budget - the big ticket items of airfare and car rental - are in US dollars. So the impact of the exchange rate is left to lodging, meals and fuel.
TuckH is offline  
Sep 24th, 2007, 07:16 AM
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I would think that car rental, even though it may be priced in $US would still be affected, since the office renting the car would be in Europe, and would still be charginf in their local rate (i.e. euro) non?

Similarly, if an airline pays landing fees in euro, or refuels, has counter staff, clean planes,etc in europe, those costs would go up?
Michel_Paris is offline  
Sep 24th, 2007, 07:17 AM
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I'm Canadian, my rate is $1.50/euro....so I think we're used to what you are feeling now...and I still try to go every year.
Michel_Paris is offline  
Sep 24th, 2007, 07:24 AM
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Yes, we rent the car from the US, but I haven't noticed the increase in rates (maybe I'm wrong). The airfares are more impacted by the high price of oil than by the exchange rate, I would think.
TuckH is offline  
Sep 24th, 2007, 07:59 AM
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I look at it this way. When I eat out in Europe, the tax (7% in Florida) is included in the price and the tip (20% for good service) is included. So there is 27% that I am saving eating out in Europe.
wally34949 is offline  
Sep 24th, 2007, 08:13 AM
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Davees:

I've deciphered your post, and you tell it well! In a few other posts, I've put it another way.....

"whatever extra dolars you spend with the 1.40 rate, will hardly be missed after you get home. A few months later you will totally forget about the extra bucks spent...no matter what your budget!"

You'll begin planning your next trip by that time anyway!

Stu T.
tower is offline  
Sep 24th, 2007, 08:19 AM
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Dave,

I like your way of looking at things. As for me though,there are 4 of us that would travel and the extra dimes add up just too fast! Certainly, there are ways to economize, but you just can't get around the fact that Europe travel has just been priced out of reach for some of us.
As for big ticket items being unaffected - that's true, but airfare is not really the big ticket it once was. You can fly to Dublin for a few hundred dollars now, but once you get there the pints are now pretty pricey.
For my family,(U.S.) I think trips to some of our National Parks or cities is about all we can do this year - it's too bad, we had hoped to get to Europe for the kids first trip there...
jujubean is offline  
Sep 24th, 2007, 08:19 AM
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Except our last summer's travel companions who are still bi*ching about the cost of a meal in Italy! Arrrggghhh. They're done.
rbnwdln is offline  
Sep 24th, 2007, 08:44 AM
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I had my own 'exchange rate' problem about 15 years ago. I bought an apartment for the first time, after having been evicted from an apartment with totally laughable rent (4 times below market prices). The mortgage took a very big bite out of my finances for the first time in my life.

Being hooked on travel, I just made a big change in my accommodation. I used to enjoy staying in places like the Hilton, Hyatt, Sheraton or Inter-Continental with my 50% airline discount, and I just wrote them out of my life. Saving money became a new passion, and it became a game to see how low I could go. The winner so far is a delightful hotel in Luang Prabang, Laos where I paid $1.75 a night for a lovely room.

However, this is the Europe branch, so I will just say that I went to about a $50 budget for hotel rooms for my European journeys, and I got along just fine. In any case, the quality of what you get for $50 has been going up, due to all of the chain hotels (such as some of the Accor brands) who are beating each other's brains out for the budget clientele. First you were happy just to have a TV in the room with the local channels. Then they added some satellite channels, and now they have moved on to premium movie channels, with very little price change (I mention TV, which doesn't interest everybody, but the same goes for the quality of the bathrooms, which DO interest everybody.).

Anyway, the apartment is completely paid for (4 years ago already), and its value has quadrupled since I bought it, so I have no mortgage payments and no rent either. But I am never going back to those luxury hotels of the past, because I decided that they were a total waste of money.
kerouac is online now  
Sep 24th, 2007, 08:56 AM
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Here's another way of looking at it. Most New York hotels have raised their rates by as much as 75% in the past five years -- 25 to 30% seems to be average. Most Paris hotels actually seem to charge the same rates they did five years ago! So although the currency rates may make those hotels in Paris more expensive now than five years ago, the increase in cost of going to Paris has not increased as much as the cost of going to New York.

And the increase in cost of traveling in Europe has not increased as much as our own daily cost of gasoline (as well as many other things) at home.
NeoPatrick is online now  
Sep 24th, 2007, 08:57 AM
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sorry, your post doesn't make a lot of sense to me -- perhaps because the comparison between last year and now isn't really the issue for many people. The dollar has dropped a lot in the last five years, and no one liked the rate it was at last year, either. If it were about the level when the euro was first introduced (around $1.16), that would be a better comparison to me.

I'm not one of the people who complain a lot about this issue (never, actually), but I just don't think those are valid comparisons nor really pertinent. The dollar has dropped 9 pct in the last year alone. So, to some people, an extra 9% vacation cost increase in one year is a lot of money, as most people don't get 9 pct income raises in one year.

YOur rhetorical question is your trip to Europe worth one meal at Applebee's or one tank of gas doesn't make logical sense, either, as it isn't that one meal at Applebee's, it's about 9 pct of your entire budget. Given I spend only about $25 for one tank of gas, it really doesn't make sense, as it certainly costs me more than $25 more this year than last year for my European vacation.
Christina is offline  
Sep 24th, 2007, 09:18 AM
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In reality, it isn't 9%, it is less than 4% between last year and this. The exchange rate was about 1.35:1, now it is 1.4:1, a differential of .05:1 or 5 cents per Euro.

What I was trying to get at was the difference in prices from last year to this, if you spent $1,000 on "stuff" in Europe would be the equivalent of about 1 tank of gas ($50).

People get all weird over exchange rate variations, when in reality it doesn't account for much in terms of a trip's true cost. A person thinks nothing of saying "Hey, let's all go out to eat" but gets all upset if an exchange rate varies by a few percentage points. I'm just trying to give a different tilt on it.

Dave
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Sep 24th, 2007, 09:27 AM
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OK, Dave..i admit it....I am totally stup[id but how does spending $1000 DOLLARS equate with a $50 tank of gas...DUH
Dukey is offline  
Sep 24th, 2007, 09:31 AM
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I'm weird Dukey, sometimes I don't know exactly what I mean..ha ha.

What I mean is that if you were in Europe last year and spent $1,000 and went back to Europe this year, buying the same stuff would cost you about $1,050 due to the increased value of the Euro vs. the Dollar. This doesn't take into account inflation.



dave

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Sep 24th, 2007, 09:32 AM
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The $50 difference is about the cost of a single tank of gas.
daveesl is offline  
Sep 24th, 2007, 09:38 AM
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My interpretation--It's the difference between what $1,000 would buy in Euros last year versus now:

$1000 * last year's exchange rate ($0.78) = 780 Euros

$1,000 / today's awful rate ($0.71) = 710 Euros

780-710= 70 euros or about $100.
KidsToLondon is offline  
Sep 24th, 2007, 09:40 AM
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Note that it's more like $100 instead of $50! At least how I calculated it
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