Tips and advice on making the most of your foreign exchange.
In my last post, I provided an introduction to foreign exchange for people who had all but no idea what the forex market was, or how it works. That post included a guide to reading the foreign exchange rates, as well as explaining why each currency pair has a different rate, and why the foreign exchange rates change.
Following on from that, what I want to look at in this post is the nitty-gritty of how you can maximise your exchange rate, when you buy Norwegian kroner. If you have any questions I don’t answer here, feel free to ask them in the comments!
1. Open a bank account in Norway
So you’ve decided to move to Norway, and know that at some point down the line you’re going to want to transfer money from where you are, to over there. That could be because you plan to pay for a Norwegian mortgage with funds from a bank account you own at home, or because you want your savings in Norway to tide you over.
Either way, it might sound obvious, but before you can transfer money to Norway, you'll need a Norwegian bank account to transfer it to. So that should be the first thing on your list to do (you can find a list of Norway's banks to consult here.)
2. Avoid the number one mistake people make, and research the rates in advance!
Once you’ve got your Norwegian bank account, and you know how much money you want converted into kroner, you’re ready to transfer money abroad. At this point, you’ll want to avoid the NUMBER ONE mistake people make when transferring money abroad, which is to leave it until the last minute. This is a mistake because, as I explained in my last post, the foreign exchange rates change constantly.
If you only change money at the last minute you need it, you're therefore opening yourself up to whatever rate is there at the time, even if it’s terrible. Instead, if you truly want a good exchange rate when you buy Norwegian krone, you need to get ahead of the game, and find out where the rates are as far in advance as you can.
3. Keep an eye on the exchange rate with Google
Fortunately, if the prospect of finding out how strong the krone is three or six months before you need to transfer your money fills you with dread, you’ll be pleased to know it isn’t difficult. In fact, you can do it with Google, in exactly the same way as you’d search for something ordinarily. For example, let’s say you’re moving from the UK to Norway.
In this case, what you would do is enter “GBPNOK” (the UK pound into krone exchange rate) into Google, and Google will simply deliver the rate as it is, there and then. Now, if it were me, what I’d do at this point is enter that rate into a spreadsheet, and check it once or twice a day. What you’re looking for is a definite sign that the pound is getting stronger against the krone.
4. Talk to a specialist.
Let's say then that you’ve done what I suggest, and checked the krone exchange rate every day for a couple of weeks, well in advance of the time you need to transfer the money. And let's say that, for a couple of weeks on the trot, the pound has risen, and you think it’s a good time to exchange currencies. Well, this is the point at which you’ll probably need to speak to a specialist.
Call a foreign exchange broker, and ask for someone that can help you buy Norwegian krone. What you should get, is someone who can tell you if the pound is strong against the krone compared to, say, six months or a year ago, as well as what’s happening in Norway's economy. Then, all that, you'll truly be in the best possible position to decide if now is when you’ll get the best exchange rate.
This then coves the basics of how you can maximise your Norwegian krone exchange rate. As you can see, it mostly involves being vigilant about changes in the exchange rate!