When you come to Mexico, it’s tempting to believe you can run your life like you do at home.

But in some areas you can’t.

One such area is cooking. I arrived in Mexico not giving a thought to the challenges of cooking in a foreign country. As a Spanish friend of mine innocently remarked, “You go to the store, buy food and cook it like you do at home, right?” Such is our hubris. Another area that calls for a different approach is how you handle money.

Money being the river upon which all of our boats float (or sink or run aground), it may be helpful to share a bit of money hygiene I’ve learned since living in Mexico. Not having access to your money or enough cash when you need it is one of the quickest trips to Panic you’ll ever make in a foreign country. I’d say 80% of the times I wanted to pull my expensive blond hair out by the roots had to do with money and transferring it between countries. Here’s what I’ve learned about handling money and accessing funds in Mexico.

Banks in Mexico

In the US, you’d probably get a strange look if you said you didn’t have a bank account. No one questions the safety of their money with a federally insured bank. A bank account, like a driver’s license, is viewed almost as a form of I.D. Because of this mindset, one we pack with us like so many other things we don’t need in Mexico, once expats have resident status, they often toy with the idea of getting a Mexican bank account.

Only 37% of Mexicans have bank accounts. If so few Mexicans trust banks, should you? Most of my Mexican friends do fall in that 37% category. I have also heard countless stories from other Mexicans about money “disappearing” (and far worse) from accounts with major Mexican banks. Keep this in mind. (My personal creed is that if Mexicans do/don’t do something, there’s a damn good reason for it.) I will indeed have one one day, just not with much money in it.

Withdrawing money from ATMs

When you withdraw money at an ATM, the bank will ask you if you want to accept the exchange rate. If you’re like me, when you see this, you’re likely to think if you say no, the whole transaction will be declined. It won’t. Decline the exchange rate! The transaction will continue to process at the current market rate rather than the bank’s exchange rate, with is much higher, even four pesos to the dollar higher!

It was four years before a fellow traveler at the airport told me this as we were getting pesos at an ATM there. Who knows how much I paid in the higher exchange rate over 5 years? My guess is thousands.

Banks do have different exchange rates. American banks that have partnerships with Mexican banks, like Bank of America has with Scotiabank in Mexico, and you might not be changed a transaction fee. If you spend months in Mexico at a time, it would be worth establishing an account at a bank with such a partnership. Citibank operates as Banamex in Mexico.

Tipping and currency cognitive dissonance

You likely know that tipping is 10% in restaurants and for services in Mexico. What you may not be prepared for is the cognitive dissonance of using unfamiliar currency, even when everyone knows the exchange rate.

In the US, tipping with change seems practically disrespectful. In Mexico, tipping with change is acceptable and common. On the other hand, I’ve seen well-meaning tourists waving 20 peso bills (about a dollar US) at restaurant servers and street performers as if they were 100 dollar bills, not something you’d see with a 20-peso coin. The appearance of money sends us cultural cues. Our cultural cues are different at home.

The new 500 peso note and the 20 peso note are both blue, adding to the confusion. The 20 peso note changed to a smaller bill recently. Mexico seems to change the appearance of bills frequently so check them carefully. Collect 20 peso coins in Mexico. You can never have enough of them. The lovely, hefty coins are welcome for anything, anywhere, anytime.

Prices on labels is the final price

A delightful thing about shopping is that all taxes are included in the price tag. The price on the tag is the exact amount you have to take out of your wallet. Same goes for services. My stylist charges me 700 pesos for color. That’s the charge I’ll see on my credit card.

What credit/debit cards should you have in Mexico?

Every year or two, take time to review your credit card benefits. At times, a regular credit card has better benefits for traveling than cards marketing themselves as travel credit cards. Some benefits I look for are car rental insurance coverage, no currency exchange charges on purchases, double points for airfare and travel expenses and flight insurance coverage.

Having two US banks and debit and credit cards from each has saved my hide a number of times. Replacements for lost cards can be mailed, but the process is often fraught with inconvenience, wait time and anxiety. Have a couple cards and two bank accounts and maintain your peace of mind.

Don’t forget to set up a PIN for your credit cards. The first year in Mexico, I wanted to get cash from my credit card only to discover it required its own PIN number, one that needed to be set up before I left the U.S. You can’t set it from Mexico. Don’t forget to do this. You may never need to use a card for cash but you always want multiple ways to securely access cash in a foreign country.

Get a WISE card

The high profile of big American banks can lead one to believe that their power would extend to all points of the globe, and that your US credit card will be accepted anywhere they accept credit cards. It won’t.

You will run into purchasing situations that require a Mexican credit card, most notably when purchasing from Amazon, renting movies on Youtube.mx or buying tickets for concerts and other local performances that often only takes domestic Mexican credit cards.

What to do? Wise.com enables you to purchase a prepaid debit card that’s connected to your US bank. You can transfer money from your US bank account to the card. The debit card allows you to do online shopping in Mexico when international credit cards are not accepted, especially helpful with Amazon. Wise is cheaper than Pay Pal to transfer money into a person’s bank account in another county.

If trying to send money through Western Union to Mexico, you can’t do that online. Their site is very misleading on this, allowing you to add credit and debit cards anyway, and never telling you clearly that you have to go into an outlet to complete the process. You have to make the transaction in person where you can show an ID, even if you are sending, not receiving, money.

Mexico: Still a cash culture

Americans are so used to using debit cards, and increasingly credit cards as they’ve added point programs, that most of us come to Mexico without a good sense of how much cash to carry. In Mexico, you analyze your cash needs for the day the same way you check the weather before you get dressed at home.

Never leave home without at least 500 pesos (about 25 dollars) in excess of the most you think you’ll need. Carry change (and those 10 peso coins!) too, as you will need to give on-the-spot tips of 5-10 pesos for people helping you park, load groceries, baggers and a wide field of service and street gestures.

You will quickly learn that change is a big commodity in Mexico. It’s very common for an Uber drive not to have change for a 200 peso note when you've taken a 60 peso ride. Unless you want to drive around with her while she asks people on the street for change, make sure you have it (cab drivers expect you to pay in cash. Once they see you’ve selected the credit card option, they’re likely to cancel your ride).

ATM security

ATMs, those joyful little whirring machines we so take for granted in the US, require a proactive attitude in Mexico. Limits for cash withdrawal from an ATM are usually set at about $400. A 24 hour period might be required between withdrawals. All this can make for some awkward days when you have to pay rent or pay another large bill in cash (having to pay rent in cash is not uncommon in Mexico).

ATMs will more frequently be out of cash in Mexico, especially around holidays or paydays. As a foreigner, you likely don’t know Mexico bank holidays - all reasons to have a little more cash in the house than you might keep at home in the US.

Avoid ATMS other than established bank ATMs. They often have higher fees and questionable provenances. Take measures to hide your hand while typing in the PIN number as elaborate scams, some involving cameras surreptitiously hidden, are too common. If forced to use an ATM other than a major bank, check around the machine carefully.

Gas station rip offs

I don’t have a car in Mexico but Paul Kurtzweil has certainly run into many scenarios of gas stations attempting to rip him off that are worth reading.

Money, for good or bad, it the wind behind our sails moving us through life. By anticipating your needs ahead, your boat will never be have to tide over.

Related links:

Video on how to use the Wise debit card.

My personal experiences, some quite amusing, with Mexico’s cash culture.

Most recent:

Some items you will want to bring with you to Mexico. My commerce page, all things I have bought and use myself.

About the author:

Kerry Baker is the author of a four books, including If I Only Had a Place, a guide to renting in Mexico, The Mexico Solution: Saving your money, sanity and quality of life by living in Mexico part-time, an entertaining how to guide to setting up a min-life in Mexico, and 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.)