[vc_row][vc_column][vc_column_text]My 15-year old daughter surprised me the other day with a conversation about the currency exchange rate and its impact on her life events. Here’s the scoop:
She’s a mermaid! Yes, you heard me right. That’s what she said. One of her dreams is to swim in the ocean like a mermaid, with a fancy tail. Initially, I thought it was just one of those princess-y fascinations little girls have, until she showed me the detailed research she had done on procuring a “real” fancy mermaid tail, with a whopping price tag of $1,500. She meant business! I coughed, gagged, and tried to find the gentlest ways to tell her that “honey, $1,500 is just not in my budget for the Kids’ Toys category”.
She was not to be deterred. She said she was already saving for it herself. “All power to you, baby!” I said. It’s been two years since that conversation, and she has been saving for it consistently. Aside from putting away part of her monthly allowance, what I didn’t realize was that she had also been watching the currency exchange rate. You see, we live in Paris, and her allowance is in Euros. But the tail manufacturer is in the US, which means she will be spending Dollars for the purchase. In the recent months, as the Euros drop against the Dollars, she understood that she will now have to shell out more Euros to get to $1,500.
As we walked the streets of Provins a few weeks ago, she was complaining to me about how the economic state of Europe is ruining her purchase plan of her mermaid tail! What could I say to her? She is right. As a citizen of the world, we are no longer confined by our local economy. We need to pay attention to world events, and understand their impact on our daily lives. While I regretfully don’t have a perfect solution for her, this led us to another discussion: what would they like to do with their current savings? Leave them in Euros or convert to Dollars when we return to the US? What are the pros and cons? What are the risks? There isn’t necessarily one right answer, but the key is to understand the reasoning behind each choice, and be able to make the best decision possible given the information at hand. At the time of this writing, both kids said they need to think about it! :-)[/vc_column_text][/vc_column][/vc_row]
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