Sunday, January 13, 2013

Money during Peace Corps service


This is second in a series of blog posts written specifically for incoming volunteers.

The question of money is a big one when it comes to the Peace Corps, especially if you’re like me and quit your nice, stable “real world” job in order to pack up and fly halfway across in the world in pursuit of world-changing and dream-chasing. Some of my biggest unknowns were how I would handle my financial affairs while I was away, and just how much money I would need to have saved in order to fully experience Madagascar and even some neighboring countries.  So with that, here’s some money-related information I wish I knew before coming here:

First, the basics: you won’t need to access money (and won’t actually be able to anyway) during the 2 month training period—which, looking back, I realize was actually kind of nice and liberating. While you’re living at homestay (first month) and while you’re living at the PCTC (second month), you will have all your meals provided for you and won’t really need to buy anything, except maybe for some snacks, a bar of soap, flip-flops, etc. For this kind of expense you get a weekly allotment of what Peace Corps calls “walk-around money”. Think of it as your weekly allowance from the Peace Corps. It’s enough for you to buy phone credit, occasional snacks/soda/beer, laundry soap, and other miscellaneous things during training. It’s also a good way to practice your Malagasy because you willl have to talk to different vendors while you buy things! It is pretty impossible to actually spend the entire amount each week, and my recommendation is to save as much of this as possible—trust me, you’ll be glad you did once you get to site. (A note about phones: every volunteer buys a local cell phone to use here, both for communicating with your family/friends back home, and for talking to people in-country. The way they did it for my stage was that during the first couple days of training, they took a list of who wanted a phone, and a PC employee bought us all phones and SIM cards in Tana. They deducted the cost from our first month’s living allowance, and I think they gave us the phones about 2 weeks in. So you can expect to have a local phone number which people can call you/text you on after about 2 weeks of training. You’ll be using a pay-as-you-go system, which is a culture shock if you’re used to all-inclusive plans. It is super expensive to call/text America, but it’s free to receive texts and calls, so have your family set your number up in Skype…. Which I think is around 40 cents a minute to Madagascar.)

Once you finish training, you receive your monthly living allowance via direct deposit into a local bank account, and it’s up to you to go to your banking town monthly/twice-monthly/whenever to get money out. (This is another culture shock if you’re used to swiping your debit card for everything—this is pretty much an entirely cash-based country, except in major cities!) There are 3 main banks here in Mada: BFV-Societe Generale, Bank of Africa, and BNI. You will be assigned a bank by Peace Corps based on your site location, and you will be given an ATM card around when you get installed at site. (However, these are not like American debit cards that can be swiped like a credit card—you can only use them to take out money at an ATM, and only at your actual bank. So you can’t just pay a fee to use the BOA ATM with your BFV card, for example.) All of these 3 banks accept VISA debit cards as well, but only BNI accepts MasterCard debit cards, and BNI is more sparsely spread out than the other two banks. Additionally, their acceptance of MC is not reliable—I have yet to be able to use my USAA MC debit card, even though I am technically supposed to be able to. So if you are looking to have access to American money while you’re in Mada, make sure you have a VISA debit card.

The topic of accessing American money brings me to the thing that I wanted to address most in this blog post. As mentioned before, this is a big question I had before coming here, and I don’t think the information I got from a current PCV was very accurate, so I want to correct that for you guys. The volunteer who helpfully answered a lot of my questions pre-departure told me that I wouldn’t really need to dip into my American savings for anything while I was here, and that the Peace Corps living allowance would be enough for the lifestyle that most PCVs live. Wrong! My experience here has been that not just for me but almost all other volunteers, you need to dip into American money for vacations in-country, splurging in Tana, or other big expenditures. For example, I was a new volunteer (as opposed to replacing a volunteer) and so I moved into a house without any furniture. I ended up having to dip into some of my savings in order to buy some things for my home. I also have to dip into American money whenever I go on vacation in-country. I do save some of my living allowance every month for traveling, etc., but it is never quite enough, especially for holidays like New Year’s when you want to splurge a little bit. Some volunteers who live in the countryside save a lot because they spend practically nothing while at site-- everything is cheap and they don’t have cell phone/internet access, so there is no way they can possibly spend much money until they go into their banking town. However, I’m in a bigger town and have cell phone reception/3G, lots of good food options, and great frip shopping, so there are ample opportunities to spend money on phone and internet credit, food, clothes, etc, and therefore it is harder for me to save money.  So I want it to be known that it’s definitely possible for you to save money and not have to spend American money while you’re here, but it will be harder if you’re in a bigger town, or close to a big city. In general, when I just stay at site and live “normally” for a month, I never have a problem with money. But it’s when I’m spending time in Tana, or traveling in-country, it gets very expensive.

Some further explanation about Tana (aka Antananarivo, which is the capital): all of us volunteers joke that trips to Tana suck us dry. If you’re in a town close to Tana and end up going there frequently, you will find yourself spending a lot of money going out, taking taxis, etc. For example, a taxi at night will cost 10,000 Ariary (although you can split this with friends), and you’ll find yourself spending maybe 15,000 Ar for dinner, perhaps 20,000 Ar for drinks, and then before you know it, you’ve spend 50,000 Ar in one night. For me, that’s half of my food budget for a month. A former volunteer always told me that he’d go through his living allowance in 4 days in Tana. Of course, you don’t need to be going out and spending a ton if you’re in Tana; it’s easy enough to just hang out at the meva (PCV transit house), cook in the kitchen, and chill with friends. But you will often find yourself wanting a night out to celebrate a birthday, go out with your PCV friends, or just experience a bit of city life to get a break from life at site. Also, some PCVs are generously supported by their parents are all able to go out without much regard to budget. It gets difficult when you want to go out with friends and end up having to “keep up with the Joneses” and then spend a lot of money that you can’t afford. For me, I don’t receive support from my parents (other than care packages), and all of my savings were very hard-earned, so I personally can’t justify a lot of lavish nights out in the capital—I’d rather put that money towards traveling.

So then the question is, how much money do you need? The amount will vary for everyone, and I won’t tell you how much I saved, but I’d say that in general, it would be ideal to have about $1,500 to $2,000 set aside to see you through your 2 years of service. I know this is not possible for many people, but it will ensure that you can live comfortably and take some vacations in-country, as well as give you a cushion in case you run into any unforeseen expenses. If you want to travel outside of Madagascar during your service, plan on saving several thousand more. For example, a flight to South Africa is about $1,200 round trip (you’d think it would be cheaper because it’s so close, but it’s surprisingly not.) For traveling after you COS (close of service), be aware that you can take up to 1/3 of your readjustment allowance and put that towards your COS trip. So that’s how most PCVs finance their COS travels.

It is definitely possible to come here and live without having any American money to tap into, so please don’t read this and think that you won’t be able to come here and be a happy PCV if you don’t have money saved. But if you want to live only on your living allowance and be able to take vacations/go out in Tana, you will have to budget very carefully.

I know that the money thing can be a sensitive topic, so please do not interpret anything I’d said here as wanton disregard for the purpose of the Peace Corps and the fact that we are supposed to be living like local people, not rich expat aid workers. I merely wanted to give some honest information that I think would be helpful for incoming PCVs to know in advance, and present you with the reality of the situation you will face when you come here. Money can be a big issue for a lot of PCVs, and it leads to moral dilemmas for me because I constantly think about the fact that I am supposed to be living on a local level—but how can I be, if I am taking out American money to take a vacation over the holidays, and able to pay someone to wash my clothes? But on the other hand, if I have money saved to travel here, why shouldn’t I use it, and support tourism here? And if me paying my neighbor to do my laundry means that she gets to earn some extra money to feed her family, isn’t that a good thing? These are the type of puzzling issues that occur a lot, and you will just have to figure out how you feel most comfortable dealing with them. Anyway, once again I hope this information was helpful for those of you who are going to be new volunteers. (I realize it’s a little late in the game to be telling you how much money to save, but hopefully the August stage volunteers will see this!) 

4 comments:

  1. Thank you for your post Emily. I will be leaving as a PCV for Albania in 2014, and appreciate all the info you provided. I look forward to checking out more of your blog.

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  2. You're welcome Jon-- I expect things will be a bit different in Albania, though there should hopefully be enough similarities to make this post useful towards preparing for service there. For example, being in Albania (as opposed to an island in the middle of the Indian Ocean) may make it more affordable to travel to other countries, whether by rail or by air, so you may want to plan on saving in anticipation of wanting to take vacations like that.

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  3. Hi Emily,

    Thank you so much for the insight! I'm leaving for Tanzania in July and really needed this information. Seriously so thankful for your objectivity and for consideration of those with and without extra money.

    Best Wishes!
    Stacey

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  4. Hi Stacey,

    Glad to hear that this was helpful for you! I will just add a caveat to say that things might be different in Tanzania, but this at least reflects my (and my friends') experience in Madagascar. In Tanzania, you will have the ability to travel to other African countries more easily/cheaply than we did, so you might find yourself wanting to take more vacations out of country. And there are lots of amazing things to do/see in Tanzania such as Arusha, Ngorogoro crater, safaris, and of course Kilimanjaro (which costs about $1000 I hear), so I am sure there will be lots of times when you'll want to spend money on traveling while there.

    -Emily

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