If you’re like me, you’ve been observing in dread as the dollar has continued its slow nosedive in relation to the peso.
Where will it bottom out? Nobody seems to know. Pessimists say there’s no limit, while optimists say that it should be between 18 and 19 again by the end of the year. As far as I’m concerned, it’s anybody’s guess in this weird dimension we’ve been stuck in lately.
I’m actively trying to adjust my budget and not get my hopes up, but the past several months have been a pretty painful transition for a lot of us. This includes both those workers who earn in dollars who’ve seen 20% of their income seemingly evaporate into thin air, as well as the many families in Mexico who rely on remittances from family members in the U.S. to meet their living expenses.
If only we’d known last year what we know now!
This time last year, I moved to a lovely house with higher rent than what I’d been paying previously. It was a slight stretch financially but still well within the range I could afford. Magically (well, by the magic of exchange rates), my rent is now US $150 more expensive than it was when I moved in, besides the increase tied to inflation that’s baked into the contract.
I also bought a (used) car this year, a goal I’ve had for quite a few years. I don’t regret buying it, but it’s meant that much more in monthly expenses during a year where prices on everything seem to have skyrocketed. Pretty much the day after I bought the car, we dipped below 19 pesos to the dollar (seems like a fantasy now, doesn’t it?), which at the time seemed just terrible.
So, here we are. I wonder to what extent Mexico’s more recently arrived immigrants feel like they’d been told they were getting on a kiddie ride only to find themselves on a scary funhouse roller coaster, the kind that goes upside down.
I moved to Mexico over 20 years ago because I was in love — with the country, yes, and also with my then-boyfriend (who later became my husband and then ex-husband). The increasingly advantageous exchange rate — it was 10 to 1 when I first arrived — and the fact that I was able to hop on the online work wagon were happy accidents of history and circumstance, but not the reason that I chose to call this place my home.
I’m still committed to Mexico. This is my home and will remain so, even if I need to drastically reduce my budget in some unexpected and painful ways. The falling exchange rate feels like a punch to the gut, but, hey, no one ever promised that earning dollars or the dollar-peso exchange rate would forever be advantageous to dollar-owners.
And while I’m missing some major features of a complete upper-middle-class profile, I do, for the most part, and on the surface, live somewhere close to what I consider an upper-middle-class lifestyle. However, that was not always so.
I spent my childhood in a paycheck-to-paycheck family, any financial advantages stemming from more distant family members who would help out when things got too tight (my grandmother paid for my braces and ballet classes, while a childless great uncle who had to foresight to create trust funds for each of his nieces and nephews was the reason I was able to go to college).
I wasn’t particularly prosperous when I showed up to live in Mexico either. It was before online jobs were really a thing, and I worked at an “English institute” full-time, earning about $7,000 pesos a month (which in those days was closer to $700 USD) with no benefits; I remember my boss balking when I said I didn’t think I could give classes one day because I’d lost my voice.
I took the bus, I asked for prices before picking things out at the market and I can count the number of times I went to the movie theater or mall in a year on one hand. Rent for a little apartment was $2,500 pesos, and the rest was spent on bills, food and bus fare.
All this means that I’ve got plenty of experience pinching a peso and see myself increasingly needing to return to those habits. In the hopes they might help you, too, here are some tips for coping:
- Use cash, or at least transfer the money you’re planning to spend to a Mexican bank account. Things are priced in pesos here, and many accounts from the U.S. and/or card readers at the grocery store take a cut when you pay with a foreign card. It’s usually small, but hey — every peso counts these days.
- Pay attention at ATMs. If you take out pesos from a US account, there are some that will ask you, “Hey, can we charge you 6% more for your pesos, please?” Many people think they must agree in order to get their cash, but that’s actually not true. If you choose “decline conversion,” they’ll give you your money anyway.
- If you enjoy buying in bulk at places like Costco, make sure you’re actually getting a good deal. I mostly use it for boxes of milk and dog food, but, especially for things like frozen food, it can be quite a bit more expensive, as can the grocery store; you can expect U.S. prices there. I went shopping the other day and could swear that every little item in there was priced between 50 and 100 pesos! 50 is the new 20, I guess.
- For fresh food, a local market and even the tiendita (neighborhood store) is usually your best bet. They’ll also often have things like ham, bacon, and cheese that you can buy by the gram. You can also know right then how much you’re spending, as you’ll usually need to ask about the prices. The market can also be a good place for a quick meal or snack that’s not too pricey!
- Shop around, even at the Oxxos and Fastis: eggs everywhere seem to be at least 80 pesos a carton, but they’re 60 at the Fasti down the street from me. Unlike convenience stores in the U.S. the prices in Mexican corner shops don’t tend to be as inflated.
- Think about switching to an electric shower. Since moving into a house with one, we’ve hardly used any gas, even though we have a clothes dryer. Now I know: nothing sucks up more gas than the boiler! If you have no choice, keep only the pilot on, but don’t keep the heat up. And if you’re really brave, you can just keep it totally off and light it when you want to take a shower.
- For goods that come in plastic containers (like detergent and other cleaning chemicals), there are often places that sell it by the liter. You can take your empty plastic container and buy it that way, which is almost always a much cheaper option. Plus, you get to use your plastic containers a few times before just throwing them away.
When will this roller coaster ride end? We do not know. But for now, it seems safest to assume that it won’t, as well as to remember that, although inflation is decreasing, it doesn’t mean that prices will go down. (There’s inflation, and then there’s people and companies taking advantage of everyone saying there’s inflation.)
Good luck out there, all! If you’ve got any more tips, feel free to share them on the various platforms available!
Sarah DeVries is a writer and translator based in Xalapa, Veracruz. She can be reached through her website, sarahedevries.substack.com.
