How to Enjoy a Strong U.S. Dollar…Take a Vacation!
By Tom Kirk
With all the global economic uncertainty around the Greece bailout, China’s slowing growth rate and Eurozone struggles, the U.S. dollar has made a strong and steady comeback over the last several years when compared to other world currencies.
There are many plusses and minuses about this for our economy (e.g. cheap oil – a plus; decreased exports – a minus). But I want to focus on a significant personal advantage of a strong U.S. dollar: the cost of a European vacation.
Back in 2007, my wife and I took our first ever European vacation to the Tuscany region of Italy for our 25th wedding anniversary. It was a fabulous trip – beautiful countryside, stunning chapels and cathedrals, delicious foods. But man, it was expensive! A lite lunch for two was $50; dinner was easily double that before adding wine.
A big reason for this was that in 2007, $1 euro cost $1.44 U.S. dollar (USD). So lunch for two that may cost the local Italians $35 euros cost us $35 x 1.44 = $50 USD.
But this euro-to-dollar exchange rate has changed a lot since then, falling to as low as $1.05 in March and is $1.10 now. This change alone significantly reduces the cost of a 2015 European vacation.
If we use a nice round number like $10,000 euros that one might spend in Europe on food, hotels, transportation and entertainment, taking such a trip in 2015 would cost you $11,000 USD. Taking such a trip in 2007 would have cost you $14,400 USD, or 31% more than taking the same trip now. So you can now stay there for a full two weeks for the same price you would have paid in 2007 for only ten days.
So that’s what we are going to do. We are headed back across the pond this fall and will be staying there a little longer this time. We were going to do so in any case since it is so far away and takes so much effort to get there. The fact that it is now less expensive than before is a nice bonus. Perhaps you feel inspired to make your own trip to Europe. Trip Advisor’s Top 25 European Destinations might offer some further inspiration!
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About the Author: Thomas L. Kirk
CPA-PFS President, Founder and WealthCoachTM
- Certified Public Accountant
- Personal Financial Specialist
- Financial Planning Association Member
- University of Florida, BSBA