remittance
Money sent by a worker to their family or others in another country.
Example
“He sent monthly remittances to his family in his home country.”
Memory Tip
REMIT-tance — to REMIT means to send. A remittance is money you send (remit) somewhere.
Why It Matters
Remittances are crucial for millions of families worldwide who depend on income sent from relatives working abroad. Understanding remittance costs, exchange rates, and transfer methods can help senders keep more money in their recipients hands and support their families more effectively.
Common Misconception
Many people assume all remittance services charge similar fees and offer similar exchange rates. In reality, fees and rates vary significantly between banks, money transfer services, and informal channels, so shopping around can save substantial amounts of money.
In Practice
A worker in the United States earning $3,000 per month might send $500 monthly to support family in Mexico. If they use a service charging 5 percent in fees with a poor exchange rate, they lose $25 to fees plus additional losses on currency conversion, whereas using a service with 1 percent fees and better rates could save them $15-20 monthly or about $180-240 yearly.
Etymology
From Latin 'remittere' meaning 'to send back' — sending money back home.
Common Misspellings
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See Also
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