Posts Tagged “gifts”
One thing you definitely need when traveling abroad besides a passport is local currency, such as euros in Europe, yen in Japan or rubles in Russia. In the past, travelers would typically withdraw what they need from an ATM in the country they’re visiting or simply use a credit card, letting their bank calculate the cost in their home currency at roughly the market rate. There was usually also a foreign transaction fee.
Increasingly, however, retailers, restaurants and ATMs are offering travelers the option to pay or withdraw money in terms immediately converted into their home currency. Companies offering the service call it “dynamic currency conversion.” For example, an American tourist visiting Paris is able to use her credit card to pay for a fancy meal at a French bistro in U.S. dollars, instead of euros.
This may seem innocuous – or even convenient – but agreeing to use your home currency in a foreign land can significantly inflate the cost of every purchase. Thinking a bit more like an economist can help you avoid this mistake, and save a lot of money.
Surge in tourists
A century ago, international travel was only for the rich. These days, almost anyone from an industrialized country can see a bit of the world on a budget.
And that’s one reason why a record 1.24 billion people visited another country in 2016. Naturally, financial firms have sought to capitalize on all this wandering by inventing ever more ways to separate travelers from their hard-earned money.
Buying things abroad
Tourists rely on credit, debit or ATM cards to pay for hotels, restaurant meals and local trinkets.
A complex international computer network checks if a card is valid for the transaction and transfers the money. Traditionally, to help pay for this, banks and credit card companies have charged customers a foreign transaction fee.
However, banks are now offering more cards with no foreign transaction fees. At the same time, “free ATMs” are popping up around the world that don’t charge local transaction fees (though your own bank may still do so).
So how do banks cover the costs of these transactions if they are increasingly letting consumers use the system for free? One way is offering the option to pay in a user’s home currency. Even some bankers warn against consumers doing this because the exchange rate used is much worse than the one your bank would offer.
For example, say you’re a Spaniard visiting New York City and shopping for some clothes at a department store. After scouring the store for the right sweater for your mother, you go to the cashier to pay the US$50 bill (tax included). After you swipe your Spanish credit card (which boasts no foreign transaction fee), the cashier asks if you’d like to pay in euros instead of dollars.
If you stick with dollars, your bank would convert the price into euros at about the market rate, €43 at the moment. If you choose to pay in euros, however, the currency conversion includes a fee for the privilege, which may be as much as 10 percentage points. So you might end up paying about €47 instead.
The same thing happens with ATMs. I was recently in London’s Heathrow Airport and needed some British pounds. In the old days, an ATM would simply offer a few denomination options, issue me money and my bank at home would eventually calculate the cost in U.S. dollars. Instead, the airport ATM asked me if I wanted to lock in the exchange rate and know exactly how many dollars would be debited from my bank account.
I wanted £100 and tried two different ATMs. The currency rate offered in dollars ranged from almost 4 percent to 10 percent more than what my bank charged (or about $134 to $142). I rejected both offers, did the transaction in the local currency and ended up with a total charge of just $129 from my bank.
I have observed numerous international travelers as they made this choice, such as an Italian family arguing about it at the next ATM, and most chose the dynamic conversion into their own currencies.
So why do travelers pay more by accepting a worse exchange rate when they could simply say no?
Three functions of money
Economists consider any item as money if it performs three different functions: unit of account, store of value and medium of exchange. Two out of three explain why so many international travelers act the way they do.
The first function of money is a unit of account, which is how people post and keep track of prices. This is why banks and credit card companies get people to agree to pay in the currency where they live, instead of using local money.
When people travel to a country with a different currency, they often mentally keep track of their spending using their home currency, converting all prices in their heads as they shop and eat. If an ATM or credit card terminal asks if you want to pay for something in the currency you use as your unit of account, your brain says yes.
Money also acts as a store of value. Items used as money provide the ability to make purchases now and also in the future. At the end of a trip, travelers not planning on returning to a country tend to spend leftover money in airports buying things they don’t really want. They don’t want to hold onto foreign bills since they are not a store of value. For the same reason, they prefer to be charged in their home currency when getting money from an ATM.
Money is also a medium of exchange, which is anything readily acceptable as payment to buy or sell goods and services. This is why people have to convert money when they travel abroad. In New York City, a dollar bill is a medium of exchange for food, drink or a ride on the subway. However, those dollars are not a medium of exchange in, say, China, where waving a wad of greenbacks would mostly get you stares. And that’s why travelers must convert money from one currency to another.
How to save money abroad
When faced with an ATM or credit card machine that asks if you want to convert to your home currency, I recommend you decline, especially if you went to the pain and effort to ensure you have a card or bank with no extra foreign exchange fees. Even if you don’t have one, and your debt card charges a fee, in most cases it still makes sense to use the local currency.
An exception to this rule, of course, is if your bank or credit card charges a very high fixed foreign exchange fee and you need only a little bit of money. If this is your case, then saying yes might save you money even if you get a poor exchange rate.
The main thing is: Think it through! Resist your natural inclination to say yes just because it makes you feel comfortable. Don’t be fooled when asked if you want to complete a transaction using your home currency. Using the local currency can save you money, making your next trip abroad less costly.
We all want to spoil the children in our lives at Christmas time. Some of us like to sneak in a bit of learning too.
From an educational perspective, toys are an excellent way to engage all ages in STEM (science, technology, engineering and mathematics).
Here we’ve put together some tips for those of you looking for yuletide shopping inspiration beyond just the typical array of toys marked “science and technology” on the shelf.
But first, a quick wrap of key terms.
Science is about exploring the nature of things, and involves skills such as predicting (hypothesising), observing, collecting data, fair testing, explaining and communicating.
Technology is a process that builds over time, and involves meeting a need or solving a problem. It includes both design technologies and digital technologies.
Engineering, very simply put, involves how systems can be put together to produce the desired outcome. For young children this is almost the same as technological skills.
Mathematics should go beyond just measuring and counting, and incorporate problem-solving skills such as those involved in coding.
Under the STEM umbrella, it’s also important to consider what are termed “21st-century skills”, such as critical thinking, problem-solving, creativity, innovation, communication and collaboration.
I want a robot
But moving beyond just regular use of digital technology, coding and robotic products are available that teach children how coding works, where it can be applied, and what its limitations are. These include programmable toys that can be operated by simply pressing buttons or sequencing physical tokens to produce movement.
Devices such as Beebots and Cubettos allow children to use their imaginations to create scenarios – for example, tunnels, roads or bridges – that their robot can negotiate. Kids learn planning, algorithmic thinking, and mathematical reasoning.
More sophisticated robots such as Spheros or Edisons connect toys to tablets or computers. Children must negotiate the constraints and opportunities of the real world – for example, slopes, different surfaces, and wind – and test their code under different situations. These toys encourage children to think creatively when coming up with their solutions.
In the future we will see more toys building in augmented reality, with many companies now investing in the interactivity between physical and virtual worlds. The goal is to build products that allow children to use physical objects and real-world locations (via GPS) in conjunction with computational devices, not only on their own, but also in competitive and collaborative environments.
Popular collaborative board games such as Pandemic are praised for their accurate depiction of how health workers respond to disease outbreaks. Children see the real impact of disease, how it can spread across the world, and the role of science in bringing outbreaks to a resolution. Children also learn collaborative problem-solving skills, computational thinking, and the benefits of planning and sequencing.
Science literacy can also improve by playing board games. Card games like Organ Attack! give children the opportunity to learn about real diseases and the organs that they affect – for example, hepatosplenomegaly, a disease that affects the spleen and the liver. Amusing drawings – the game is based on the comic series The Awkward Yeti – depict the organs in an engaging and entertaining way, which adds to children’s understanding of their own body parts.
Construction sets are also useful for developing a range of STEM skills.
At a basic level, simple wooden blocks have been shown to bring many benefits to children’s development, including spatial reasoning and language.
More complex building sets can involve digital aspects such as designing, making and programming robotic toys.
Consider toys that give children the scope to go beyond simply putting the pieces together according to the instructions, but also encourage them to use their imaginations to turn the pieces into something unexpected.
Tips to get it right
It is worth noting that when children engage with toys and games with a STEM focus, they will not necessarily be aware of the knowledge and skills involved. Parents can support their children’s scientific thinking, elaborate on scientific information, and help them structure meaning from their observations, using the following tips:
- question children about their ideas
- gently highlight inconsistencies in their thinking that contradict the evidence in front of them
- support them in not focusing on only one piece of evidence, at the cost of other relevant information.
It can be difficult to get the balance right between digital technologies that involve individual use (and can isolate children) and those that focus on collaboration and conversation. To address this concern,
- look at how you may tap into the skills and knowledge that are learned
- focus on apps that encourage multiple players, turn taking and collaboration.
Toys and games that involve friends and family members are more than just fun: they can foster new skills, challenge children to work in a team and encourage thinking and idea development.
In this episode, relationship therapists Jesse and Melva Johnson answer a subscriber who asks how to deal with receiving a gift that they don’t want and/or need. Enjoy how they give some great advice for coping with a common problem during the holiday season.
Learn more about them by visiting their website, www.jesseandmelva.com!