One of the most important aspects of the program is budgeting or coming up with your own money. In fact, financing money is such a crucial part of the program that it is included in the interview process. When I had my interview three years ago, I knew very little about handling money. Do not worry if you are drawing a blank on budgeting, too. Here are some pointers that will give you a better idea:
· Exchanging money and the exchange rate- Germany, as part of the European Union, uses a currency called “Euro”. Before you go abroad, you should exchange for some Euros (about 100-200€), so that you will not have to worry about money before you learn to navigate in a foreign city. There are several ways to exchange money, such as:
o Through a Bank of America account- Bank of America partners with the Deutsche Bank, one of the well known banks in Germany. When a Bank of America customer withdraws money at a Deutsche Bank ATM, there are no fees applied to the transaction. For other banks, fees apply every time money is withdrawn abroad (charged by the home bank and the foreign bank)[1].
o Travelers checks- Travelers checks can be obtained at a bank or a financial institution for a fee. Be sure to check with the company that issued the travelers checks for locations in Germany where you can cash in your travelers checks. Note that an additional fee might apply when you cash your checks.
o Currency Exchange booths at airports or train stations-Although there are no explicit fees stated, the fees are often built into the exchange rate. This method should usually be avoided. [2]
One of the details to watch of for while exchanging money is the exchange rate. A tip on saving money is to exchange more money when the exchange rate is low and exchange little when the rate is high.
· Cost of living- In 2008, the value of 1€ in Germany was about $1 in the United States, if not slightly higher. Currently (Feb 2011), a combo meal at McDonald is about 6.17 € and a 1.5 liter bottle of water is about 1.02€[3]. For more information on the cost of living, refer to www.numbeo.com and select “Germany”.
· Budgeting- When I first arrived in Germany, I wanted to try different food, such as currywurst and grapefruit-flavored gelato. I had to restrain myself from spending too much. For your first two months in Germany, many things will appeal to you and it will be very easy to spend a lot of money. Be sure to find the balance point between spending as little as you can and trying out new things. Try only things that you really want to try. You can use the money that you saved up for traveling.
Some of the ways for saving money include:
o Recycle bottles- When you buy bottles of soda and water, you get charged for 0,15€ to 0, 25€ per bottle. By returning the bottles to any store, you can redeem money. One of the past participants mentioned that when he was short of money, he searched for bottles along the street and earned money through recycling.
o Pack your own lunch- After you tried out different food, you may want to consider packing your own lunch. My host mom packed me sandwiches and I saved on lunch money.
Sparknotes:
- Bank of America is the best way to exchange money in Germany
- Exchange more money when the rate is low and exchange very little when the rate is high
- Try only things that you really want to try
- Save money through recycling bottles and packing your own lunch
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