Wednesday, May 14, 2008

All Set to Leave Again - Money

It's our last day in Nettlebed for a while. In the morning we leave on our Ireland journey. Our plans are to drive to Colvyn Bay in Wales, tour Conwy Castle, and spend the night in a B&B. On Friday we take the ferry from Holyhead to Dublin. We'll be reporting on these events.

We decided to lease a car for this part of the trip as the one we got with the house is older and we're more comfortable with the reliability of a newer car. We arranged to lease a Nissan Micra, chosen primarily on the basis of price. The car we were promised was not available, so they upgraded us at no extra cost, to a brand new Totota (with a GPS, unfortunately UK only and not Ireland). The model is an Avensis which is not sold in the US. It's quite comfortable and well equipped and is an automatic, so no shifting with my left hand.

MONEY

Working with unfamiliar currency is interesting. We recently read a study where people were asked to guess how much of some commodity they could buy with a fixed amount of some currency. They always underestimated the purchasing power of unfamiliar currency (even a US one dollar coin).

We found that in Turkey (the New Lira was worth about $0.75) things seemed cheap while in the UK (the pound is worth $1.96 today) everything seems expensive. But this is deceiving. When we look at an item on a menu and it is only 11 pounds, at first it seems cheap until we calculate the true cost based on the exchange rate. Quite often, we've paid more than we normally would have for something because we acted too quickly.

You have to pay close attention when in a foreign country.

There also different customs in the UK. They are not as quick to discount as in the US. Newspapers are expensive (the Times is 70p weekdays, 2 pounds on Sunday). They not only don't discount the face price for home delivery like US papers do, they charge for delivery.

Taxes are also very high, thus the high price of beer and other luxuries (beer a luxury? I think it's a necessity). Sales tax or VAT is usually included in prices, but not always, so you need to be careful as it is often 17.5%. Because of the tax, cars are also expensive. A Honda Accord is over $30,000. Turkey was even worse, as cars have a tax of 100%, and alcohol is taxed at 400%.

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