Probably the most common mistake people make when planning to visit Mexico is worrying about the wrong things; the water, taking the bus or even drug violence (the dumbest thing to worry about of all). 

While I wouldn’t exactly say you should worry about your money in Mexico, I can say that problems concerning access to cash, currency cognitive dissonance, and ATM mishaps have real potential to trigger your oh-shit-a-meter into the red. You’re more vulnerable to panic when mishaps have to be resolved in a foreign language and new debit cards have to be mailed across borders.

Cognitive Dissonance

A 20 peso bill may feel like a reasonable tip for a street performer but a dollar isn’t much of a tip anywhere, including Mexico. The spare change you barely counted and left on the table was actually a 50% tip. You may say you’d never make mistakes like this but I base these examples of money mishandling on what I have ssen and have done myself (except feeling proud of the 20 peso tip to the street performer - that was another guy).

You likely know that tipping in Mexico is 10%. Qhen was the last time you left a tip in coins at home? To this day  it still feels wrong in my heart to use coins even though my brain tells me it’s perfectly acceptable, even desirable to tip with them.

Initially when I moved to Mexico, 500 pesos had a way of sounding like more than it is, even knowing the exchange rate. When I used cash for grocery shopping at markets, I found myself handing over a pile of bills with "big" numbers on them; 100’s, 500’s, adding up to thousands of pesos! It seemed like a lot of money, like the post Civil War South (or Argentina in practically any given year).

Attractive, steely-eyed market vendors don’t flinch when quoting outrageous sums for an item if you appear to be in a hurry (I famously once paid $20 dollars for a dollar's worth of tamarindo candy I was in a rush to buy before a flight). No one wants to look like an idiot in line at the register when their Spanish isn’t good. Mexicans are very patient but it’s easy to feel self-conscious and that leads to math errors

You’d be well-served to review the look of the money as well as the exchange rate when preparing for trips to Mexico. The newer blue 500 peso note looks much like a 20 peso note. A certain 20 peso coin looks very much like the very common 10 peso coin. The same domination may be on difference sized bills. Five hundred peso notes come in pink or blue.   

Knowing the exchange rate won’t eliminate uncomfortable moments. Don't be embarrassed if your math skills aren't what they used to be.  Few people are, as frequently observed in ATMs, where small groups of intoxicated tourists can be found huddles around ATMs trying to figure out if they have withdrawn $200 dollars or $2,000 from their bank account.

Only with experience teaches you what 2,300 pesos really means in terms of value, and what you should pay in pesos for a purchase, which is  different from knowing that a peso exchanges 17 to the dollar. At times like these you must take a deep breath, slow down in the faces of sighing vendors, cashiers, and taxi-drivers and remind yourself, “I’m in Mexico, what’s my hurry?”

Anticipating cash needs

Americans, Europeans too, are less and less in touch with cash, resulting in rusty prediction skills. It’s common, for example, to rush into a Mexican ATM thinking you’ll need, say, $30 dollars a dinner, another $60 dollars for a sightseeing tour, and $40 for incidentals. You round that up and withdraw $3,000 pesos based on the existing exchange rate.

You  run out of money too soon and at a very inconvenient point in the evening. Why? Because it’s easy to under-calculate what things cost in Mexico. Many things do cost less. Others cost as much or more than you’re used to. Often the cost isn’t as low as anticipated based on what we hear at home about prices in Mexico. (Restaurants and dining out in particular have gone up in price in the last few years.)

It’s common for visitors to think they can always use a credit card when they run short. While Mexico is getting more credit card friendly all the time, it’s still spotty. A street vendor might or might not whip out a card reader but a retail store may surprise you and not take them. Take extra for public transportation. You may be taken to the wrong place and need another cab ride or have to jump into taxi unexpectedly when you planned to take a bus.

Not having enough cash on me was a source of frequent, now amusing, ATM fire drills during my first year. These times I sometimes find myself bailing out friends who are visiting (as I myself was bailed out when I first arrived). As my first housemate, The Intrepid Elise, taught me to always carry at least 500-1,000 pesos more than you think you could possibly need.

Money and banking precautions

Like the U.S., ATM’s in Mexico have a cash limit, about $400. The amount is determined by your bank, not the Mexican bank. It’s a good idea to check with your bank what your withdrawal limit will be before you go. Fees add up. Shop around for a travel credit card. If you have a Charles Schwab account, their debit card offers the very best terms when it comes to saving on exchange and withdrawal fees.

When you withdraw money, the ATM will ask you if you want to accept the exchange rate. Many people think the whole transaction will be declined if they don’t accept the exchange rate.

False! Decline the exchange rate! The transaction will continue to process at the current market rate rather than the bank’s exchange rate, which is much lower, even four pesos to the dollar lower! 

Avoid ATMs outside major banks, as they charge more for the service and are more likely to be tampered with (not common, but be aware.) I found it’s easier to dispute a transaction if Limit my withdrawals to one major bank ATM.

If your record shows a long pattern of using the same bank ATM and suddenly there’s a false charge from an ATM in a tourist zone hotel, you have a better case. 

Always have a few thousand pesos at your hotel or lodging in case your favorite ATM runs out of cash at a time when it’s not convenient to go on the hunt for one, especially around the 1st or 15th when Mexican workers get paid.

In case of a technical glitch, the panic it can induce can pin numbers and login information to freeze up on you. Several expats have confessed to me that this happened to them in their first few months in Mexico (You have to confess first, or get them drunk - otherwise they’ll never admit it). Have pin number written down and secured safely

Quick access to cash in an emergency

I highly recommend having two bank accounts back home, and that you take debit and credit cards from each. If you lose your debit card, it will make things much less stressful. You can do an online transfer from one bank to another in the instance of an account being frozen. You probably don't routinely take cash advances on your credit card so it’s easy to forget to set up the separate PIN numbers for your credit cards that will enable you to make cash withdrawals.

Two separate banks and two separate debit cards has saved me on four occasions. Once I lost my debit card, once my US bank froze my account for no reason (Well Fargo kept telling me  that I had to “stop by a branch” to resolve it, no matter how many times I told them I was in Mexico.) Twice an ATM did not return my debit card, which always has a way of happening at 4:00 on a Friday afternoon. I’ve also had places not take one credit card, but take another, even though both cards were from major US banks. 

Online event tickets and such usually only accept credit cards from Mexican banks. Amazon.com.mx doesn’t take foreign cards either. I use a Wise card for Amazon.com.mx (it may work for event tickets too but I haven’t tried it for that). 

Some banks have a system of sending emergency cash that requires you to pick it up at a FEDEX office. FEDEX has much more restricted hours in Mexico than in the US.  It’s stressful to be expecting cash, arrive and have to wait until the next day because you were silly enough to expect a FEDEX to be open at 3:00 on a Tuesday afternoon. Again, save yourself a lot of stress and have multiple ways to access cash from multiple sources.

Banking processes are a part of your life, no matter where you are. Even with all these considerations, revel in the knowledge that it's easier and safer moving money between borders and accessing money than it's ever been.

About the Author:

Kerry Baker is the author of four books.

Her most recent is “The Lazy Expat: Healthy Recipes That Translate in Mexico”, a cookbook for travelers, snowbirds and expats who want to maintain a healthy diet in Mexico (spoiler: You must cook)

If Only I Had a Place is a guide to renting in Mexico. Renting in Mexico is different, with both advantages and disadvantages to the foreigner. Choosing the right place to live can make or break your entire experience in Mexico.

The Mexico Solution: Saving your money, sanity, and quality of life through part-time life in Mexico is a how-to manual on how to set up part-time life in Mexico that will entertain while giving you a workable plan and time frame.