It’s not complicated, but it definitely takes a bit of organization on my part to keep track of where everything is going and most importantly, what currency I should be using!
I know a few people were wondering why I was saving up a big lump sum to pay towards my student loans at the end of the year instead of paying extra towards them every month to cut down on interest. Well, all those answers revolve around how we handle our finances here on the island, so let’s get to it!
First things first, I really resisted having a bank account here just because of the logistics. It was fine for us to just use our U.S. accounts with fee-free debit cards at first, but it only worked because I was part time and my paychecks were small enough to be cashed to cover a few expenses down here. However, when I went full time a year ago and my income increased, it was no longer safe to have the cash in my possession, so I opened up an international bank account.
The account is actually a U.S. savings account. I was able to choose whether or not I wanted a Grenada checking, a Grenada savings, a U.S. checking, or a U.S. savings account. I didn’t want the extra debit card since I use the envelope system, so I opted for a U.S. savings account.
For my full time job, I get paid in U.S. dollars, and it is direct deposited here in Grenada in U.S. dollars. It is not possible to have it direct deposited to the U.S. for tax reasons, so if I want to send money to my bank in the U.S., I have to wire it, which costs me around $50-$100 USD in fees each time.
These fees are the reason why I’m not paying my extra student loan payments from Grenada, because I lose money every time. I’d rather take it out all at once and pay one fee rather than several fees throughout the year. I pay 12.5% tax to Grenada out of my full time income, and I report it on my U.S. income tax reports, so everything is clearly documented, although it was a little confusing to figure out at first.
As far what currency I use, every month when I get paid, I go to the bank and take out U.S. dollars to pay for my rent and my car. Then I take out Eastern Caribbean Dollars and break that into envelopes to pay for groceries, utilities, gas, date money, etc. I am trying to save around $800 USD every month from my paycheck, and I leave that in the bank here to be transferred back to the U.S. at a later time.
Honestly, I thought that having an international bank account would be a challenge, but it was more the idea of it that was challenging than the actual reality. I haven’t had any major problems here, and the bank is a short walk from my work so it’s very convenient. I always have access to my U.S. accounts with my debit cards, and all of my income from this blog and my staff writing jobs goes into my PayPal account and then my U.S. account so that’s what I use to fund my IRA and make my minimum student loan payments.
It sounds confusing, but after almost 2.5 years of living in Grenada, I actually have a little system down, and it works really well for us! I know that we lose a few dollars here and there in exchange fees for our regular day-to-day expenses, but that’s the price we pay for living in such a pretty place.
Have you ever had to open an international bank account? How do you get access to your money when you travel internationally?
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