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The Expat Learning Curve: Managing your budget in Mexican pesos

The following article was written as a part of our series called “Your New Life in Yucatan.”  Because the topic of learning to manage money in a new culture is so vital to success in business we are also posting this article as a part of our “Investment Yucatan” series as well.

To read more articles about investment in Yucatan click here.

To read our articles on how to make the most of your new life in Yucatan click here. 

Taking time to convert pesos to dollars and back again can hurt your brain and your budget

“Mexico is SO cheap!”

If you come to live in Mexico from countries like England, Ireland, Canada, Australia or the US you will likely notice that some things are much cheaper here than they are back home.   This is especially true when you compare prices for services like car repair and home maintenance.  Generally dining and entertainment is considered a bargain as are prices for buying and renting a home.  For many expatriates the lower standard of living may be one of the primary reasons they chose to move in the first place.  Mexico is known as one of the best places to live a high quality of life for the least amount of money.

This concept can be a blessing or a curse.

The fact is that your ability to live the life you want to live in Mexico requires you to think about all your spending decisions in pesos- not in the currency you used back home.  Let me explain this with a story about my experience.

To give you some background I am a thirty (something) guy who moved to Merida in 2010.  My intention was to live and work in Mexico.  Although my situation may differ when compared to some expatriates here, I feel the experience I am describing is a universal one- especially for those living abroad for the first time.  The “learning curve” associated with survival in a foreign country differs from person to person.  Most experienced expats will agree, however, that the sooner one learns to budget based on the currency and standard of living in their new country the more successful and rewarding their experience will be.

The Naïve Expat

I chose to live in Merida, Yucatan while I finished the second year of my graduate program.  I was working remotely as a graduate assistant and receiving about $500 US a month in pay.  When I first arrived here I stayed with a friend and began a search for my own rental home.  My first thought was to convert my pay to Mexican pesos to see what I was working with.  This seemed like a good first step.

I saw several homes and eventually found a great two bedroom condo that was fully furnished with air conditioning and all appliances including a washing machine.  The best part of it all was that it was located in a beautiful North Merida colonia (neighborhood) close to my work, many restaurants, shopping and Centro.  The rent was $3,650 pesos monthly (about $300 US depending on the changing conversion rates).  When thinking about my budget I simply converted the rent to US dollars and thought, “WOW! This condo is a STEAL!  I could never afford to live in such a nice home in a neighborhood like this in Chicago!”  I made my deposits and moved in right away.  I thought I would stay there forever.

I began my studies and started to teach English at a local school on the side.  Since dining out was so “cheap” when compared to back home I decided I could eat out more.  I also found myself going out to bars and to the movies more often too.  When I started to feel a little “poor” I would go shopping for food to cook at home.  Walmart was the obvious choice as there are many of them around town.  Walmart was cheap back home so it was cheap here too, right?  I looked at prices for food and simply converted them to US dollars in my head.  If it seemed reasonable I would put the items in my cart and buy them.  Since everything seemed so cheap I found myself buying the “high end” brands.  Hey- I could afford them, right?  I also found myself visiting Costco to get brands I was used to back home that I could not find at other retailers.

This lasted about four or five months.  For some reason I always seemed to have a hard time at the end of each month making my bank account balance my spending habits.  I began to truly look at my spending and asking local friends about how they spend their money.  They asked me about my rent and I got several surprising looks of shock- not for the reason I expected either.  They told me I was spending too much.    I slowly began to realize that all this converting of pesos to dollars and back again was a true experience of being “lost in translation.”  The fact is that you can’t properly convert a standard of living.

Sure- this is a familiar place to shop but is it the cheapest? Something to consider.

Finally Living in Pesos

I should have been thinking in pesos the whole time.  Experienced expats told me to do this and I thought, “Yeah, yeah- I do think in pesos.”  But that was not completely true.  I thought in pesos only to convert it to dollars.  After my graduate program ended so did my job that paid in US dollars.  Talk about a reality check.

I he began to live my life differently- like local folks.  I get what I need and I look for the best prices.  I save my money for a few good things instead of every good thing.

I have since moved out of that condo and into a house in a less “fancy” but equally safe neighborhood.  I am no longer as close to Centro or major shopping centers and I have to take a bus to get to work every day.   I make plans to see friends at their homes instead of going out for dinner or drinks.  My social life has certainly not suffered with my new budget.   I shop at Chedraui and Super Aki (supermarket chains) and buy items on sale whenever possible.  I also try and compare prices to determine where I can find the best deals on items I use the most.  I find that there are many small, family stores that have the best prices out there.  Sure, I don’t always get the convenience of “one stop shopping” but I am able to make my ends meet.  Most importantly I compare prices in pesos.  I almost ever convert to dollars anymore.

You may think that I did this only because I had to and you are partly right.  Sure- I can visit friends in their homes because I have had more time to make friends here.  You might also say that I moved to a less expensive home and budgeted my shopping because I no longer make the money that can support a more excessive lifestyle.  OK…

If you find yourself using one of these less often you might find life gets a little more rewarding in paradise

Understanding the Big Picture

I think my situation (luckily) coincided with access to people who helped me understand the way things “are” here.   The necessity to change my lifestyle was matched with knowledge on how to do it successfully.   Many of my friends are professionals and have great jobs.  They earn great wages when compared to the standard of living.  The important thing I had to understand was that a direct comparison of a “good paying job” in the US to a “good paying job” in Mexico revealed a big discrepancy.  Many of my friends are very comfortable- they own homes, have nice cars and enjoy a great quality of life.  At the same time they also are careful to budget where they can so they can save their money for a few, nice things.  When it comes to their lifestyle they seem to value what is around them and spending time with people than simply spending money with them to have a good time.

Every expat who lives here may not be in the same situation.  Some work and some do not.  Some have a regular income in US dollars while others have the same in pesos.  Some can afford to go out to dinner every night and some can’t.  Either way, I hope that expats in Mexico work hard to convert their ideas about spending rather than converting the peso to dollars every time they pull out their wallet.  If they don’t they might find they are not getting such a good deal after all.

Not making this vital connection can really put a damper on the whole idea of “moving to Mexico to live the good life in paradise.”  I have met my fair share of folks who came down here with the best intentions but never made this connection.  This was me for a few months.  Luckily I snapped out of it.  Some can afford to delay this realization and others can’t.  Unfortunately those in the last category are no longer my neighbors.  I was sad to see them go.

When did you learn to live in pesos?  Was there an “ah-ha” moment or was it something you learned over time?  Do you have a funny story to share about your own experiences or the experiences of friends?  Please feel free to share them here or on our Facebook page or Twitter feed.   

Attention Expats: Signatures in Mexico are more than a swipe of a pen on paper

The following post is part of our series called “Your New Life in Yucatan.”  Although this article is written from a perspective of a US expat living in Merida, Yucatan this topic should be read by people looking to live in any part of Mexico- especially if you view signing your signature as a mundane task you don’t really think about all that much.

To read other articles about living in Yucatan please click here

If you have an artistic signature like this one you better practice it in Mexico. It should be the same each and every time!

I once went to a local doctor who wrote her signature on my prescription with, and I am not exaggerating, fifteen loops to represent one “O” in her last name.  When I asked her about why she did this she simply replied that it is her “style.”  This was early in my residency here in Mexico.  Since that day I began to look at signatures from friends and business associates and realized that a very stylized and perfectly replicated signature is a common phenomenon.  Some signed on a forty five degree angle perfectly every time and some put letters within letters.  Some added a perfect oval around their name while others underlined their name with the exact same strokes every time they signed.  It made me feel like these folks were creating a perfectly replicatible symbol for their signatures rather than an easily readable sequence of letters I was used to back home in the US.  This is when I realized that the concept of signatures here in Mexico is a little different than I am used to.

If you move to Mexico from the US or Canada you are likely used to signing your name to identify yourself many times daily.  This is especially true when it comes to purchasing small and large items at retail outlets.  More and more people have become used to paying things with their debt cards instead of using cash.  This may change in the US as banks are toying with the idea of charging fees for debt card transactions- using cash may become the norm again soon.  Still- the concept of a signature as an identification has become somewhat “passé.”  Think about it- how many times are you stopped in the US or Canada to accurately validate your signature at retail outlets beyond a glance at the back of the card or an occasional request for ID?

If you happen to be one of those people who sign their name exactly the same every time with one hundred percent accuracy this posting may not be for you.  If you are among the rest of us who “try” to sign the same every time but don’t really pay attention you need to read on.

I call this one the "Heart Monitor" style signature. If you skip a "beat" or two you might be in trouble down in Mexico.

For some who move to Mexico from another country the thought of a signature as a concrete identification is not fully understood.  This can pose some challenges.  From your immigration paperwork to bank transactions it is expected that your signature looks exactly as it does on your passport.  There are times when your signature will not be accepted if it does not match.  If you don’t believe this fact try standing behind someone at a busy retail outlet who attempts to pay with a check.  The ten minute process of validating all aspects of the check including signature will prove this to be true- including the occasional call for another employee to offer their advice as to the acceptability of the document.

There are many reasons behind this phenomenon.  Some may call it attention to detail.  I call it protection- for you and for others.  There have been many advancements in technology that Mexico has embraced over the years including using credit/debt cards at an increasing number of stores, restaurants and service providers.  The challenge is that signatures remain the only concrete validation of identity used in conjunction with a Federal Election ID card for Mexican citizens.  In every legal interaction or non-cash exchange of money the use of an ID and exact verification of the signature confirms that people are who they say they are.   If there is no match the process comes to a screeching halt.  This is not a huge problem when you are buying groceries but can pose a big problem when signing legal paperwork.

The moral of the story here is that, if you happen to be one of those folks who is used to signing your signature while looking at something else just to move on with your day, you will find yourself in a tricky situation in Mexico.   My advice if you are one of many who don’t focus on your signature (I was one of them)- look at your passport closely.  Take some time with a piece of paper and a pen and practice your signature.  It may seem foolish but it is important.  If the process seems too silly to handle you just need to channel your inner school child and remember what it was like to practice what your “grown up” signature would look like someday.  Just make sure your last name is correct- I am saying this to all those ladies out there who might be tempted to add “Pitt” or “Clooney” as their last name.  This would defeat the purpose.

Have you had problems validating your identity in Mexico with your signature?  Maybe you have a funny story to share.  Please feel free to let us know about your experiences here or on our Facebook page or Twitter feed.  

Yucatan Top Five: “Must See” Merida Museums

The architectural beauty of the Palacio Canton is out shined only by the artifacts housed within

Yucatan Compass Consulting’s Diana González is at it again!  This time she looks to share her favorite museums in Yucatan’s largest city and capital- Merida.

Every big city in the world has museums.  They are part of the richness of the local culture and help visitors to connect with the various aspects of what makes that culture unique and worth understanding.  Some museums seek to connect to visitors through an exploration of history while others seek to connect through art.  Some museums focus exclusively on their exhibits while others put an equal focus on the visitor’s sensory experience- namely by creating and maintaining a unique architectural space to showcase their collections.

The Mexican state of Yucatan has many museums to explore.  They share all the attributes I identified above.  I believe that Yucatan’s museums reflect a rich history of the region and take advantage of the unique architecture that can’t be found anywhere else.  These museums might not be as famous or as big as those in cities like Mexico City, London, Paris or New York but they are equally worth a visit.  They offer a deeper insight into the culture and past of our region that can help visitors understand modern Yucatan- how our distinctive land supported societal change over the centuries.

I put together a short list of some “must visit” museums in the region below.  This list is merely a starting point.  If there is a limited amount of time to explore the region, a visit to one or two of these museums will be a great addition to any itinerary.  If there is more time available, these are great museums to launch a more extensive adventure of all that Yucatan has to offer.

Museo de la Ciudad de Merida (City Museum of Merida)

This museum features pre-Columbian and colonial pieces, artifacts from Mexico’s Independence, the Mexican Revolution as well as exhibitions about the henequen boom (learn all about those haciendas and how Merida grew to be one of the wealthiest cities in the world).

Address: Calle 61, between 58 and 60- Centro, Merida, Yucatan

Hours: Tuesday to Friday from 10:00 am to 2:00 pm and 4:00 pm to 8:00 pm

Admission: Free

You will want to take photos of the rotating sculpture exhibits housed in a courtyard between Merida's cathedral and modern art museum

Museo de Arte Contemporáneo MACAY (Museum of Contemporary Art)

This Merida museum promotes the dissemination of national and international contemporary art with about 45 exhibitions per year and a movement of about 2,000 pieces.  It is conveniently located in Merida’s main plaza right next to the famous cathedral.  It is an interesting experience to see what many believe to be the oldest cathedral in the Americas and then cross a courtyard to experience the world of contemporary art.

Address: Calle 60 between 63 and 61-A- Centro, Merida, Yucatan

Hours: Wednesday to Monday from 10:00 am to 6:00 pm

Admission: Free

Museo de la Canción Yucateca (Museum of the Yucatecan Song)

Called “a gateway to the world of romantic music,” Merida’s Museum of the Yucatecan Song includes in its rooms over 50 oil portraits of composers, performers, poets and promoters of Yucatecan music which was forged with strong influences from Cuba and Spain.  This is one of the most important museums in the country for its invaluable collection of musical memorabilia received as donations from descendents and relatives of famous Yucatecan performers and composers.  It is a wonderful place to see how local music was influenced by other cultures and, in turn, was able to influence music on other parts of the world.

Address: Calle 60 between 63 and 61-A- Centro, Merida, Yucatan

Hours:  Tuesday to Saturday from 9:00 am to 8:00 pm

Admission: Free

Museo de Arte Popular (Museum of Folk Art)

This museum has a unique focus- to promote and disseminate expressions of creative thought by members of Mexico’s indigenous communities.  A visit to this museum will help you to understand how the rich cultures of pre-Columbian societies have influenced regional and national identities throughout Mexico.  This museum will also help you to understand how vital indigenous cultures are as an axis of Mexico’s cultural matrix.

Address: Calle 50 A  between 57  Centro, Merida, Yucatan

Hours: Tuesday to Saturday from 9:00 am to 8:00 pm. Sunday from 8:00 am to 2:00 pm

Admission: Free

One of the many ancient Mayan artifacts housed in the beautiful Merida Anthropology Museum

Museo Regional de Antropología “Palacio Canton” (Regional Museum of Anthropology)

Built in the Mannerist-Barroquizante architectural style that prevailed from the late nineteenth century to the first decade of the twentieth century, the “Palacio Canton” is perhaps the greatest building the most famous street in Merida, Paseo de Montejo, possesses.  Alongside many other opulent mansions built by wealthy hacienda owners during the henequen boom, a visit to this museum permits you the chance to experience what it might have been like to live as one of Merida’s richest families over a century ago- with a little imagination, of course.

The great part about this museum is that it’s beautiful rooms house a permanent collection of the region’s anthropological wonders.  Since 1966 this museum has shared Mayan artifacts dating back centuries and coupled them with changing exhibits on more modern events like the region’s Caste Wars and experiences during the Mexican fight for independence and revolution.

Address: Avenue Paseo Montejo between 43 and 41- Centro, Merida, Yucatan

Hours: Tuesday through Sunday from 8:00 am to 5:00 pm

Admission: $41 (MX) (Admission free on Sundays)

Have you been to one of these museums and want to share your experiences?  Do you have a favorite Merida museum that was not mentioned here?  How about another museum outside of Merida?  Post your thoughts here or on our Facebook page or Twitter feed.

Yucatan Expatriate News: Why a last will and testament in Mexico is a good idea

It is a tough subject to broach- you know… death.  Few people want to think about it as they are too busy living life.  This is completely understandable.  Here in Yucatan there are some folks whose job it is to think about death a little more than most.  We are not talking about Funeral Directors.  We are talking about attorneys.

When the unexpected happens it is an attorney that is charged with trying to figure out how remaining assets should be assigned, debts should paid and loved ones should be supported.

It is hard enough to think about the loss of a loved one.  If you add the stress of deliberating with family members how the estate of your loved one should be dissolved, the grieving process can be elongated far beyond what is really necessary.  What if there are minor children involved?  This is an even more stressful and emotional scenario.

This situation is challenging enough as we have described it.  For expatriates who pass away with assets in another country things get even more complicated.  Expatriates with minor children have more than assets to worry about.

The Yucatan Peninsula in Mexico is home to thousands of expatriates and their families who live here full and part-time.  Many of these expatriates own property, have bank accounts here and may also have other investments in the area.   What will happen to these investments in the event of the sudden death of the owner(s)?   Loved ones who live here in Mexico will need help understanding their rights to these investments.  Guardianship for minor children will need to be identified.  Loved ones in other countries will need support to guide them through a legal process they may not be familiar with.

This was the motivation behind the Board of Notaries of the State of Yucatan identifying September 2011 as “Last Will and Testament Month” as part of a larger project called the “Inherit Campaign.”  The program was designed to identify the challenges above to Yucatecan residents who, for the most part, have yet to widely connect to the value of a last will and testament.  Notaries, just in case you are not familiar with the concept, are a small group of seasoned attorneys who can finalize a document with their signature.  All attorneys in Mexico are not notaries but all notaries are attorneys.

Expatriates can benefit from this campaign as much as Yucatecan residents.  For the month of September 2011, last will and testament services from Yucatecan notaries will be a fraction of the typical cost of about $3,000 MX.  Exact fees differ based on the attorney you choose.

To honor this campaign Yucatan Compass Consulting’s law partner, Alonso Hernandez, has agreed to provide complete last will and testament services that include an English translation for a cost of $1,724 MX.  It is important to contact him ASAP as the process must be completed by the end of September 2011 to get the special rate based on the “Last Will and Testament” campaign.

Even if you happen to miss this promotion you should very carefully consider the value of a last will and testament here in Mexico.  Look around you.  Think about your loved ones here and in other countries.  Would you rather they have peace to grieve your loss and move forward or struggle to pick up the pieces of your life left behind?  Nobody enjoys talking about death- especially their own.  A few hours of thoughtful planning, though difficult, can be the difference between a legacy of beautiful memories for your loved ones or a legacy of beautiful memories mixed with heartache and unnecessary stress.

To contact Yucatan Compass Consulting for legal services please click here.
To read an article on the Yucatan Compass Consulting web site that answers many questions you may have about the process and details surrounding a last will and testament in Mexico- click here
You can post comments below or share your thoughts on our Facebook page or Twitter feed.

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