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Lending money across borders without fighting over exchange rates
I have a strong opinion about this one, and it comes from a very petty argument I had with one of my oldest friends over about eleven dollars.
My friend Tomás lives in Mexico City. A couple of years ago I visited for a week, and he did that thing good hosts do where he just kept paying for stuff. Tacos, cabs, museum tickets, a very nice dinner where I tried to grab the check and lost. By the end I figured I owed him something like 3,000 pesos. I said I’d send it when I got home.
Then I got home and did what everyone does. I looked up the exchange rate, converted it to dollars, rounded, and sent him dollars. He wrote back a little stiffly. By the time the money landed and he converted it back, he was short. Not by much. But the rate had moved that week and his bank took its cut, and he felt (fairly, I think) like he’d come out behind on his own hospitality.
I felt like I’d paid what I owed. He felt like he hadn’t gotten back what he spent. We were both kind of right, which is the most annoying kind of argument to have.
The number isn’t the debt
What I eventually figured out is that the debt was never “about $160.” The debt was 3,000 pesos. That’s what he spent, in the money he actually lives in. The moment I converted it in my head, I’d quietly changed the deal without asking him.
I think that’s the root of most cross-border money friction. Someone converts too early. Usually it’s the person paying back, with good intentions, using whatever rate makes the math feel tidy. Then the other person converts it back at a different rate on a different day, and now there are two numbers floating around and two people each holding the one that makes sense to them.
It’s a bit like splitting a bag of flour when one of you is using a kitchen scale and the other is eyeballing it. Nobody’s lying. You just aren’t measuring the same thing.
Keep the currencies in their own lanes
These days I keep it simple. If someone lent me pesos, I owe them pesos. When I lent my sister euros while she was studying in Spain, she owed me euros, even though we both live in dollars now. Each currency gets its own little column, and they don’t get mixed unless both of us explicitly agree to mix them.
That sounds fussy, but it actually takes the pressure off. When it’s time to pay back, the question becomes “how do I get 3,000 pesos to Tomás” instead of “whose rate is correct.” Maybe I hand it to him in cash next time he visits. Maybe I cover his share of something in pesos when I’m back down there. The method can be flexible. The amount isn’t.
And if you’re carrying more than one currency with the same person, which happens more than you’d think with family spread around, I wouldn’t try to net them into a single figure. My cousin owes me some dollars from a concert, and I owe her some pounds from a trip to see her in Manchester. We could convert and cancel them out, sure. But then we’d be right back to arguing about whose rate. So we just leave them as two separate balances and chip away at each one.
You can do this on paper. Plenty of people keep a note on their phone with a line per currency. There are apps for it too, and OweMate, for one, keeps a separate running balance for each currency with each person instead of folding everything into one number, which is basically the column idea without the notebook.
When you do have to convert
Sometimes you just have to pick a number. Your friend needs the money now, and the only practical way to send it is in your currency. That’s fine. The trick, I think, is to agree on the rate together before the money moves, and say it out loud.
Hey, I want to pay you back the 3,000 pesos from the trip. Easiest for me is sending dollars. Want to pick the rate so you’re not short on your end? Happy to round up.
That last line does a lot of work. Offering to round up in their favor costs you a couple of bucks and buys a lot of goodwill. It tells the other person you care more about them being whole than about winning the math.
If it’s a bigger amount, figure out who eats the transfer fee too. My gut says the person paying back should, since they’re the one who owes, but people feel differently about it, so just talk. A surprise fee feels like a tiny insult even when nobody meant anything by it.
Tomás and I are fine, obviously. I sent him the difference plus a little extra, along with a photo of me wearing the ugly souvenir hat he talked me into buying. He replied with a thumbs up and “now we’re even.” Then, a minute later: “the hat is still ugly.”
The OweMate blog is written by the people who make OweMate, a simple way to keep track of money between friends and family.