The Infinite Kind Blog

The Infinite Kind Blog

Krona, Pounds, and Euros, oh my!

This post is a part of the Moneydance on the Road blog series.  Check out thefirst post here.

I arrived safely in Iceland Thursday morning, and apparently only narrowly escaped major delays due to the storm on the East Coast of the U.S.  Reykjavik is beautiful and the weather is like none I’ve ever seen before- the sun is bright enough for me to need sunglasses but it’s also raining.  Although the weather is odd, the rainbows which result from it are amazing, so I think it’s a fair trade.

I’ve found that I do much better sticking to my budget when I spend cash, so I’ll be withdrawing a chunk of cash either when I arrive in the country (as with my stay in Iceland) or every few weeks (when I’ll be in the Euro zone for months at a time). This strategy will save me the fees most banks charge on international transactions, but it will require some extra setup of my data file to accurately track this money.

While the more correct accounting setup would be to hold cash in asset accounts, cash accounts can be created as either a bank or asset accounts in Moneydance. In my Moneydance file I create my cash accounts as bank accounts. My logic is that bank accounts track liquid capital and asset accounts track not currently liquid resources such as an invoice which has been issued but not yet paid, or money which is tied up in inter-account transfers. I’ve deleted all the foreign currencies except those I am likely to use in the next 6 months- it keeps the drop down list shorter and simplifies the exchange rate interface on my home page.

I might have several different currencies in my wallet at the same time, so I’ll first create a parent “Foreign Cash” account so I can see how much I have tied up in foreign cash. I’m also selecting the “Do Not Show on Homepage (if balance is zero)” option for all the foreign cash accounts to keep my homepage simple. Next, I’ll create cash accounts for the first few currencies I’ll be using, the Icelandic Krona, the British Pound, and the Euro.

{% photo Krona-screenshot.jpg %}

When I arrived in Iceland I exchanged $145 USD for 15,909 ISK (cash exchanges always get a pretty terrible rate).  I transferred this amount from my USD based “Cash on Hand” account to my “Icelandic Krona” account.  I entered the exact exchange rate by entering a ratio in the exchange rate field.

{% photo final-krona-screenshot.jpg %}

In my next post I’ll describe the process of setting up a budget for such a complicated trip, as well as explore the various graphs and reports I use to make sure I’m sticking to it!

The information in this blog posts is only meant to detail my experience and should not be considered financial advice.