Disclaimer: I am fully aware that this is a First World problem, to complain about prices and money in general, but as I am living in a First World and not a Third World, this is my reality for now especially as a PF blogger.
This comment on my Everyday Minimalist post — Paris, France Part 1 — amused me more than it annoyed me:
In case it’s hard to read, ryan wrote:
$250,000 in the bank while travelling europe, and all you can do is complain about the prices? liberated indeed.
My answer is:
I don’t have $250k in the bank.
Wherever did you get that idea?
Also, just because I have money it doesn’t mean I can’t be careful with my money. Perhaps you shouldn’t read PF blogs if you’re going to get mad with people saving money & wanting to save more of it in their lives.
1. I have $155,000 not $250,000
My goal is to reach $200,000 this year but it looks a bit bleak because I am also trying to move to the U.S. and it’s getting complicated.
Still, setting a high goal is a nice thing to do for 2012.
I’m going to need to think of another strategy to make some money in the meantime.
2. The prices ARE shockingly high in Europe
They are shockingly high almost anywhere in Europe, which makes me quite glad to be across the pond, to tell you the truth.
Cost of living must be a bitch there — no wonder people can’t go out to cafes to chill out any more. They’d be poor in no time, especially without access to easy credit like here.
I was mad about having to pay good euros for crap (Laduree’s day old croissants), or a lot of money for what I consider to be cheap drinks (hot chocolate, pop), especially if you knew how much the old franc was really worth in comparison to the EUR.
To put it into perspective of why I was shocked at the prices:
6.55 French francs = ~ 1 EUR
A coffee in Paris used to cost about 5 francs, or less than a EUR.
Now, a coffee is about 2 EUR, or 13 francs, a 100% increase.
Guesstimating: 5 francs for a coffee in the past, and a hot chocolate at the most would have been 7-10 francs.
I was charged 4 EUR for that simple hot chocolate I took, which would have been 26.2 francs.
26.2 francs is murderous!
We are talking about more than a 150% increase in prices just because of a little currency exchange that was supposed to facilitate buying and selling among European countries, nothing more.
So if 1 EUR = $1.30 CAD, then I paid $5.20 for a cup of hot chocolate.
Even for $2 here in Canada, I wouldn’t pay for a cup of hot chocolate.
With chai teas and green tea lattes? Yes. A tall for $3.62, but not that same price for a simple, powdered mix hot chocolate.
(Even so, I am starting to drink more tea at home and foregoing the Starbucks route to save $$.)
I find any kind of drink overpriced considering that I know what goes into it — cocoa powder, sugar, some milk if you’re lucky, but it’s mostly water.
What is that really in cost? $0.50 in total?
You can see where I was a bit shocked at the prices, commenting on its huge price tag. I wouldn’t even really buy it for myself here, in Canada.
In Europe, I had the same reaction EVERYWHERE. It was the same not just for the hot chocolate or the drinks, but for everything except wine and cheese (fabulous prices at an amazing quality, even converted into CAD).
3. Where do they think I got the money anyway?
From a money tree? From a leprechaun? Maybe a magic money fairy who comes and visits every night?
Heck no. I SAVED EVERY PENNY OF IT, damn it. 😛
I didn’t spend the money, and that’s how I have the money in the bank.
How didn’t I spend the money? By not buying $5.20 hot chocolates, and seeing that purchase as a one-off, overpriced, expensive TREAT.
That’s how ALL people who have savings have money.
They saved it by not spending it.
What I’m slightly melancholy about is that I could have saved MORE last year by not spending it so willy-nilly, but I had a great time so 2012 is another year.
So how am I NOT going to spend the money this year? I am going to avoid restaurants.
I am hearing too many gross stories I’d rather not share on this blog in fear of making you ruin your lovely computers by retching all over it, and I am going to stick to just eating food I or BF make at home.
With all that money, I’m going to keep my savings and watch it grow with the magic of compounding interest.
Getting Rich = Saving Your Money and Not Spending It Wastefully
Anyway, just thought I’d share this amusing comment with the rest of you.
Carry on.
Just a girl trying to find a balance between being a Shopaholic and a Saver.
I cleared $60,000 in 18 months earning $65,000 gross/year.
Now I am self-employed, and you can read more about 
When are you moving to the US?
do you invest your money in any way? i only hear you speak of ‘saving’.
I forget how expensive it is living in London compared to Asia. But some things are cheaper than in Australia! In Taiwan now and everything is so wonderfully cheap. And I eat out far too much in London which I have to stop this year.
I just came back from Europe… Paying 4 euros for a teeny-tiny cup of instant coffee made a small part of this frugal girl die. In Edinburgh, I paid 8 pounds for a plate of scrambled eggs and toast (about 13$ CAD) — the prices are absolutely disgusting
Wow. When I was in Paris last, coffee was 4 francs. We were all overjoyed when we crossed into Spain and coffee was half the price (I can’t remember the conversion now).
Over the holidays I spent some time with friends who make a lot more money than me. I always assumed they could buy whatever they wanted and money was never an issue. But as we were speaking they used all the same language as me – “more than I wanted to spend,” “too much house for us,” “not within our budget.” It was refreshing, and a good reminder.
I’m thankful coco powder cost 50 cents. You know 100 years ago, you couldn’t even get hot coco in Canada. 😉
I didn’t think Ryans comment was so outrageous. Why would he be ‘mad’? I noticed that when you get a slightly negative comment, you suggest to the person that perhaps they shouldn’t read your blog or your blog is not for them. That’s a very easy reply.
I totally get what you are saying. Savings is important and I think a lot of people forget that every little bit counts!
I live in Europe (Berlin) and think you should know that not all cities are as expensive as Paris (I pay approx 2-3 Euros for a drink). When they established the eurozone that had to create a monetary convergence between all the different European currencies-hence, the Euro far outstrips a number of former national currencies. Moreover, 4 Euros in Paris….$5.50 in NYC. As a former New Yorker, a coffee at a nice cafe has been upwards of $5. So no, I don’t find Paris prices that outrageous. And London, also quite expensive. Doesn’t make it right though :-/
It was my impression he was some sort of cranky minimalist. For some, the purpose of minimalism is to “liberate” onesself of consumerism and corporate culture. Enjoying the fruits of financial minimalism with travel and shopping is frowned upon. Forty lashes with birch leaves for you, preferably in a nice Finnish sauna… 🙂
I understand your reaction regarding ryan’s comment and I do agree with your point in general. But, in my opinion, the question goes further than the price tag itself, it’s more about the value you get from the item : quality of the item itself, or the “experience” in general (sure, you will pay more just for the “privilege” to get your coffee or chocolate on the Champs Elysees) … so it’s up to everybody to decide if it is worth the price or not.
That being said, being a European myself (born in Belgium, now living in Canada), I want to put a few things in context. Yes, prices for some items are really high in Europe and it is even more the case in specific areas (Paris IS a very expensive city even in comparison with other places). But, like others already said here, people generally earns more too. Don’t forget that prices in restaurants and coffee places include taxes and tips. Sure, here in North America, most people don’t give tips to Starbucks barista (or very low tips) but in Paris, “service” is included in your price tag …. counterpart of this is that service is bad in lots of place (waiters do not feel the need to be nice to get a better tip).
Also, with the introduction of the “soda tax” (think it will start in 2012, basically a tax on any potentially unhealthy drink and food), people shouldn’t expect to pay less for drinks in France. I was in Paris a few weeks ago, and totally shocked to see a not so fancy restaurant (in the area of Quai d’Orsay museum) asking 8 euros for a small glass of coke (a glass of wine was way cheaper) while I was paying not even half of that in Belgium.
You point the fact that people in Europe doesn’t have an easy access to credit. That’s right but I think you will agree to say it’s not such a bad thing if they start to overuse credit to go have overpriced coffees and drinks 🙂
I just read the comments and realised that a.volckmar said pretty much the exact same thing before me, so I apologise for the bis repetita =)
While I do agree that a lot of things are overpriced in Europe, especially in the great capital cities and even more so in Paris, I don’t feel the comparison to the (new, the “old” franc was actually the one before the one that was substituted by the euro, if we’re being finicky) franc is very fair: the euro has been around for 10 years now, so comparing euros to francs the way you just did totally foregoes with inflation which, in these past ten years, has been rather consequent everywhere.
Being a personal finance blogger I’m sure you were aware of this, but I feel that by making the direct correlation francs/euros, you’re misrepresenting the reality of the impact of the euro.
Don’t get me wrong, I DO believe prices were hiked with the simple change of currency, but for having lived in France for most of my life I DON’T believe (and financial studies tend to confirm this although I unfortunately have none at hand to link to) that hike is as consequential as you would have it seem in this article.
I may be overly precise here, but you strike me as someone who might appreciate the added input. If I was mistaken, please forgive me, and know that I absolutely do not intend to berate anyone or sound like a know-it-all 😉
Thank you for the continued stream of quality articles by the way, seeing one person’s journey to financial prosperity in such detail is enlightening.
To digress a bit (and lighten the mood 😀 ), the hot chocolate was probably not the powdered variety (it’s practically a sacrilege to have such a thing in Paris), but I agree, it is rather expensive, even for a drink that needs to be beaten into perfection (and uses cream). You should have had it at Fauchon or Pierre Herme. 🙂
Interesting about how servers in the UK earn a higher base wage than their counterparts in the US, and the cost of goods being higher as a result. Thanks for sharing that 🙂 I have always disliked the American view point on tipping.
Just to back up FB here… The purchasing decisions of a financially educated person often hinge more on the item’s perceived VALUE than it’s actual price tag. Regardless of the location, the ingredients, the currency…. apparently FB felt the hot chocolate was not a good value for her money. A subjective opinion; completely hers to make without deserving the judgement of those who have less cash in the bank.
Ha. I sometimes wonder if when my student loan is paid off and I have six-figures in the bank, I’ll go on regular shopping sprees in Holt Renfrew or something. I doubt it. I think when you make these habits, they really stick with you — even if you don’t necessarily “need” to adhere to them anymore.
I’m going to be complaining about overpriced hot chocolate when I’m a millionaire! Who is this guy?
It’s not only across the pond, in Barbados it’s $6-7 for a Cafe Americano @ the coffee shop. That’s $3-3.50 USD and a COMPLETE rip-off! I stick to my French press and call it a day.
As someone notable once said: the rich remain rich by acting poor, and the poor remain poor by acting rich.
Cost of living is cheap in our country, that’s why when my dad went abroad, he tried as much as he can not to convert dollar to php.
Anyhow, with regard to the “money in the bank” issue–we aren’t really supposed to think of spending so much just because we have money in the bank. Otherwise, there will be no more money in the bank before you know it.
I don’t understand your point. Yes, you got your money by saving, but what did you expect? That you would go to Paris and everything would be just like it was at home? No one forced you to go to Paris if you don’t like the cost.
Because who thinks Paris is going to be cheap? Frankly I didn’t find Paris that expensive. Some things cost a little more and some things less. It evens out and you adjust as you go. Travelling is expensive. Yes, you can be careful with your money, but that doesn’t mean you need to complain.
Yes you can spend your money how you like. And you did. When travelling you can’t always expect to get the best price or best product. Sometimes you win and sometimes you lose.
Wow!! I can’t believe he said that either! What a douche! 😛 Doesn’t he know that if you are reading a saving money blog, then you’ll have money in the bank. But that still doesn’t mean you’re going to stop saving money just because you’re spending some on travel or want you really want.
Wow I can’t believe someone said that!
I totally agree with you; I think restaurants are the single biggest commonly-availed rip-off. On Saturday I paid $26 (in Toronto) for a hamburger – which I am certain was previously frozen – and a glass of wine. Dinners out at pretty restaurants are touted as a “lifestyle” thing but it’s the fastest way to squander your money.
Having said that everybody should spend as they wish. 🙂
You should be able to complain about where your money goes. You are the one who saves it and makes it. Things like not buying the really expensive hot chocolate is what keeps it in the bank.
The aussie dollar is doing alright atm, and $5aud doesn’t seem crazy high for a hot chocolate to me, I would expect to pay $4ish for a normal coffee at the shopping centre so a posh one for that amount, wouldn’t even think twice about it!! Similarly we do not tip except for some rare occasions where by if you didn’t, it still wouldn’t be a big deal.
I guess what lens you are looking through counts a lot as to the hot chocolate commentary … maybe the commenter felt you couldn’t enjoy yourself because of the high prices, and that would be a crying shame, once you have committed to the experience and outlay. On the other hand, it is a personal finance blog, and money is certainly one way we experience the world so I personally like hearing about what things cost.
I come from Europe (Germany to be exact), and have a slightly different opinion on this matter.
Yes, the hot chocolate you bought was overpriced, but then again you were in the capitol and most likely close to a tourist hot spot. I experienced the same in Rome or Berlin: Everything cost more if a lot of tourists visit something near the cafe/restaurant! Maybe the owners think that foreigners have to much cash or are not aware of cheaper options, but you can ususally avoid this by moving to a side street a bit more away from Notre Dame/the Louvre/Champs Elysee.
On the other hand, the calculation you made is hardly fair. You are comparing francs (are no more available since 10 years – oh my goodness, it has been that long?) with Euros without taking into account the inflation. We have a steady inflation of about 2% per year, so each euro today is worth only 0,82 Euros ten years ago. So according to you calculation (4 Euros*0.82 inflation*6.55 Francs), you spent 21,48 Francs on one coffee. Still alot, but slightly less!
Another detail I found interesting is that you say that wine and cheese seem less overpriced to you. But of course you are comparing the prices you know from Canada/the US with European prices. And the price in country of origin is (hopefully) always less than for imported goods as you have less transportation costs and higher availablilty. You also forgot that while the US (not sure about Canada here) heavily relies on tips to filll up waiters income, in Europe the are paid a fair income with tips regarded as additional income for great service. Your bill is higher because the owner of the restaurant/cafe pays the waiter more. And as salary is very expensive in Europe (additional cost of health insurance and taxes compared to US – again not sure about Canada), the hot chocolate here is bound to cost more!
i live in austria, and it’s the same here with tips, prices for tourists and so on. i totally agree with a.volckmar
i believe that prices are higher in europe because of the political systems (welfare states) – there are higher taxes on everything.
if you complain about france, you haven’t been in scandinavia haha!
next time you visit europe. i recommend a guide who lives there and knows all the charming and cheap cafes 😉 (couchsurfing is great for looking for a native guide)
You are right on all counts!
I was mostly shocked as a tourist, thinking like a native living there. 🙂
Naturally, I would have to be in places far away from Paris, but if people go out, I still find it expensive to be there, if you convert from francs > EUR, based on what I know of the prices in the past.
It has become really expensive without a good reason, other than just a chance in the currency.
I’m Canadian (from Toronto) but I live in Germany now and find things to be much much much cheaper in Europe than in Canada. If we’re talking about a cup of 4 EUR hot chocolate in Paris, then maybe that costs more. But other expenses like rent, real estate prices, transportation, auto/home/liability insurance, education… all of these are ridiculously expensive in Canada and much more affordable in Europe.
My goodness!
I won’t say much about the money thing. Everyone should use his money as he wishes.
But as for the prices in Europe. You’re right that the main cities are expensive. But if you get to know the insider spots it’s ok as the quality is good as well. 2€ coffee is ok and 4€ only if it’s a large cup.
But one phrase you said did “shock” me (even if it’s out of topic) : “…considering that I know what goes
into it — cocoa powder, sugar, some milk if you’re lucky, but it’s
mostly water.”
Water? OMG Water? In a hot chocolate? Water has nothing to do in a hot chocolate!! Only good fresh fatty milk. And if you’re lucky you get real chocolate, not some kind of powder. These are worth 4€
I think I’d have returned a hot chocolate made of water… Even the sugar has nothing to do in a good hot chocolate.
🙂
It wasn’t a creamy hot chocolate, that was for sure. 🙁
The hot chocolates here in Canada are mostly with water, but sometimes you can add milk at the coffee bar.