Exchange rates play havoc

I got a nasty surprise yesterday: I found I was badly overdrawn on the account I use to pay taxes and routine bills like utilities and insurance.

I had taken my eye off the ball since June, traumatised I think by the aftermath of Brexit, and had not looked at bank statements over the summer.  I knew I was not spending more than usual, but I had not thought to check the effect of sterling to euro exchange rates.

The first graph may not seem so bad, but a change from over 1.40 to under 1.20 has an impact on my daily financial circumstances.  My income (transferred from the UK) was 1200 € less in the August-September period this year than the same period last year – enough to have tipped my account over the edge.

The second graph shows a somewhat different problem I have.  Last year’s exchange rates were healthily over the 1.30 mark, so my monthly revenue rose very nicely.  Of course, sensible people would have made allowances for this … …  but not me.  In 2016 I pay income tax on last year’s income, so just when my income is going down, the tax bill each month has shot up. Curiously I don’t know any other British people here who pay French taxes on British income to discuss this (well, I do know one couple, but they are in a totally different and more comfortable place, so I don’t ask them!).

By local standards I’m quite comfortably off, and I admire all those who manage on much less.  I’ll just have to make more of an effort to make ends meet, starting by considering whether to cancel this autumn’s project, installing a more efficient shower tray and waste system in my bathroom.

postscript Friday evening at 5.30pm.  I transferred cash from the UK on Wednesday and it has still not arrived – and my French bank says it can do nothing before the weekend.  The last time I had a similar problem was in the early 90s when we transferred money to buy the house – coinciding with a run on sterling – and it took a month to arrive.  (Somebody in RBS speculating with our cash?)  Let’s hope I will be solvent by Monday morning this time!

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