Planning a two month budget with two currencies
In two weeks I will be spending two months in UK (Pounds) but I have my budget in Mexican Pesos. I am planning to keep the money in my debit card and maybe I will use sometimes my credit card.
1. I think that I should use a second budget, but... Should it be pounds or mexican pesos?
2. I will still use my regular budget because I should pay my regular obligations... so, Should I create a new category in this budget for the travel?
Hi Kmepu !
For situations like this, we suggest creating a second budget. You're keep your main budget in Pesos and add a second budget for Pounds.
In both budgets, you will have a category called ‘Currency Transfer'. For our example, let’s say that you have accounts in US Dollars and Canadian Dollars. If you were to send 1000 CAD to your US account, record a transaction in the CAD budget for 1000, categorized to the Currency Transfer category. That 1000 has now left the CAD budget.
When it arrives in your US account as 600 USD (or so), add it as income and budget it to your US budget categories. When you send money the other way, the process is the same but reversed. It uses the Currency Transfer category in the USD budget, which is then Income arriving into the CAD budget.
We like this method because all the currency fluctuations and charges are simplified. You record what you send, and you record what you receive. :)