One of the ways in which I try to save money is by conducting smart foreign exchange deals. Now before you start thinking that I am some currency guru, let me assure you that this is not the case. However not everyone is able to take advantage of the currency markets in the same way as I have been able to. Allow me to explain.
What I do is nothing special. It is simply by virtue of living as an ex-pat in Japan. I maintain savings in both my home country of the U.K. as well as Japan, where I am now living. At the moment I am earning yen. Of course, I use this money to live on and also save some as well.
The interesting thing for me is that I have been able to use the foreign exchange rates to help bolster my bank balance. If you take a look at the chart below, which comes from Wikipedia, you will be able to see the simplicity of my currency trading technique.
As you can see from the chart, Now is a good time to be sending money from Japan to the U.K.
I first came to Japan in 2003. Armed with the knowledge of past exchange rate fluctuations, I arbitrarily decided that whenever the rate moved over 220 yen to the pound, I would move money from the U.K. to Japan. Further, when the rate changed to less than 140 yen to the pound, I would buy pounds.
This has served me really well and helped me to increase my savings to a higher level than if I had just left my money sitting in a bank in either country. In three years, from transferring savings from the U.K. to Japan and back again, I raised my bank balance by 50%.
The beauty of this system is that I do not really have to know anything special about the F/X markets to be able to execute it. Anyone who has a bank account in two countries and some savings would be able to potentially follow a similar sort of strategy. All you require is an F/X rate graph like the one above charting the two currencies that you are interested in.