In May, I travelled to Sweden to teach Bikram Yoga at duCalme for a approx one month. Previously, I lived in Stockholm and still have a Swedish bank account but I’d since wrapped up my Swedish company and therefore couldn’t legally invoice in Sweden anymore. Kim, the owner of duCalme likes to do business by the book and I respect that, so getting paid cash wasn’t an option either. She offered to pay me a certain amount in Swedish Kronor (SEK) per class and so I invoiced using my Australian business in SEK. Now comes the currency conversion.
I used xe.com to convert SEK to AUD so I had in mind an approximate amount that I would receive in my Australian bank account. Then the wolves descend! I am amazed and disgusted at the fees banks charge for transferring money abroad, hiding even more fees in exchange rates. After some research online, I found two websites that offer a great alternative to the banks: TransferWise and Currency Fair.
Unfortunately I couldn’t convince Kim to use the alternative, so in using the banks, I ended up with approx 189 AUD less than I expected! First, I was pissed; after all, the bank fees had come out of my pay check, hadn’t they? Well, Kim assures me that she paid all of the fees for the transfer (including my banks) and I believe her, so what went wrong? To be honest, I have no idea.
Sending money abroad is deceptively expensive, thanks to the hidden fees we’ve all been forced to pay. The banks claim “free money transfers”, “0% commission.” Sounds like money’s already flowing freely, but far from it. It’s pure propaganda.
Here’s an example of what it looks like when you use TransferWise compared to the banks:
Note: Fee in AUD TransferWise: 20.42 AUD vs Average Bank: 156.51 AUD
I’m sure this is a common issue being a travelling teacher. So, what do we do about it? First, we need to get teachers and studio owners clued up that there are alternatives to the banks. Also, before you travel and teach, come to an agreement with the studio on the method of payment/transaction that suits both of you. If you need to use the banks, ask your accountant on the best way to go about it.
In the meantime I’ve shot an email to my accountant to ask him if I should have invoiced in AUD rather than SEK and if this would have made a difference or not.
If anyone has experience in this, I’m sure a lot of us would like to hear about it, so please leave a comment.