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The Tireless Work of Managing Personal Finance Abroad

 

Managing your personal finance abroad

I just got back from a whirlwind trip…to the edge of the world!

Sort of. I was on break from the Thai school year for a few weeks and took a short holiday to Chiang Mai and Chiang Rai, Thailand. I jammed as much as I could into the few short days.

I went to the famous White Temple (Wat Rong Khun), saw Black House, and toured the night markets of Chiang Rai and Chiang Mai. The highlight of the trip was a 2.5 hour pickup truck taxi ride I had throughout Northern Thailand’s countryside. So beautiful. Quiet and scenic views of rice field after rice field with mountains in the background. Seeing Phu Chi Fa, the “edge of the world”, was ultimate (so totally worth it) end result of the long ride.

In addition to the short holiday, I also went back to America for the first time in six months. It was bittersweet coming back for a visit and reminded me of something I’ve learned from living in Thailand the past seven months: managing your personal finance abroad is hard, tiring work. 

When I first got back to America, I went to FinCon (the financial media conference) in San Diego, California. While there, I got to see all of these cool up and coming financial companies from the fintech competition.

There’s an app for tipping yourself, an app for combining the benefits of credit and debit cards, and one that screens and analyzes stocks to help you better pick them.

All of it is amazing. It’s fasinating when you you stop and realize just how many tools we have to help manage our money. Money management has never been easier!

When I was still living in the U.S., I had a spreadsheet and online service I used to help me budget. Digit to help me automagically save additional money every month.  Investing avenues were everywhere in the form of different online brokerages. It was great.

And then I moved to Thailand and everything got thrown out the window.

I don’t have any advanced and visually appealing money monitoring software to help me keep track of purchases. There’s no online alert that will remind me when I spend a wee bit too much on books or camera filter grades (my new obsession).

My budgeting tactic right now consists of good ol’ pen, paper, and Evernote. Every night I go through what I spent for the day. I have a small drawer in my bedroom with envelopes labeled for different expenses. I’m using a extra labeled version of the cash envelope budget. Although instead of doing it for some fun experiment, I’m basically forced to do it since it’s the only way I can budget.

People talk about how getting your finances in order can be hard. And it is. It’s hard to really get down and look at your money constantly. I used to think it about the constant struggles and evolving we do with our money. Now I think about how bad it can be to not even have good tools around you to help you get better.

There’s a myriad of personal finance tools to fit different personalities. You hate budgeting? Try this. Or this. You want to stash away some more money? Enable auto-transfers to your savings accounts and try Digit.

Living in Thailand, not having access to a lot of these great things, I can see from an outside perspective how big of an effect fintech services can have on your financial life. They’re hugely beneficial at helping us really see our money without it being overtly boring.

Who likes to be huntched over every night or week and take a hard look at their spending? Not many people. It’s depressing, time-consuming and really boring. Luckily, you don’t have to do it if you don’t want to. There’s apps to monitor your spending. Services that alert you whenever you over budget.

In Thailand, most people don’t have that. Even the regular, working professionals here don’t utilize fintech services, mostly because many of them aren’t available here.

A hotel clerk I talked with, told me how hard it was to keep savings goals in mind when doing it by hand. The banks here don’t have fancy-tools and advanced interfaces. Visualizing money goals and taking actionable steps toward them is a lot more difficult to maintain.

Something I realized about using plastic? It’s freaking great and shouldn’t be undermined all the time and definitely not cut up and thrown away (I’m looking at you Dave Ramsey). Credit cards and the swiping culture isn’t a terrible thing. It can be beneficial to use plastic often. I love credit cards and not afraid to admit it. They’re wonderfully nifty things to have when you use them responsiblity.

Thailand isn’t as up to speed as other countries with using plastic. Many places, even established businesses, prefer cash over card. When I was at the gym one day, paying my membership, two of the employees didn’t even know how to use the card reader! Plastic is still definely something not embraced here.

As for the whole envelope system, I don’t like having to do a budget cash-only style. It doesn’t work for me and feels weird. Many people say using plastic desensualizes the spending you do, but I disagree. For a person that has a bad memory, like me, logging into your bank account and going through your transactions is easier than racking your brain to remember what you spent $12 cash on two days ago.

When I do make my return to the U.S. sometime next year, I’m not going to take financial technology tools for granted any more. I want to experiment more with different ones and see what they have to offer.

Until then, I’m going to be sitting at my desk in my small Thailand apartment, hunched over, writing down that $5 I spent on coffee last week. Old habits die hard, I guess.

P.S. I filmed a video of my travel to Phu Chi Fa. Check it out if you’ve ever wanted to hear my voice and see how I am on video 🙂 

The Price Tag of Motivation

What happens when your motivation goes away and need some more? More self-development books? Sign up for a yoga membership? Click through to read about the price tag of motivation (and a better way to help reach your goals!)

I never cared much for the movie Anchorman 2: The Legend Continues. Like many unnecessary comedy sequels (I’m looking at you Zoolander 2) it felt forced and flat in comparison to the original Anchorman movie. Which, let’s be honest, everyone can at least laugh at little at it.

Ron Burgundy’s special bond with his beloved dog Baxter made #dogbonding even more profound. Every wants a bond like that!

The difference between Anchorman and Anchorman 2 is the fact that the first one gave people an upbeat feeling and feel-goodness while the second movie went downhill fast and wasn’t very satisfying.

Motivation kinda words the same way.

Having motivation is a wonderful thing…but not all it’s cracked up to be. I mean, it can be really freaking unreliable. It’s kind of like the over zealous friend who, on a Tuesday morning, proudly declares to go out for drinks on Friday night. Then Friday rolls around and they cancel. (Maybe try again next week?).

When you run out of motivation
When you run out of motivation

Everybody loves a good motivation boost. The most notable one being New Year’s resolutions. You know how it goes. You set a big, ambitious goal to (lose weight, be productive, write the next great American novel, etc) and for the first few days, things are good. You go to the gym (exercise! new body, who dis?), be super productive (even with checking your phone every five minutes) and write your heart out for half an hour on your novel.

Then you might skip a day. Practice a little less the next day. Get busy for a week. Then it’s all over and your back to being in a slump. The motivation is gone and you need some more.

How much is all of this motivation costing you?

Buying a bunch of self-development books

…without taking action after reading them. I see this sometimes when discussion comes up about self-development and motivation booster books.

“Yeah, I just finished Big Magic. It was so good! Now I’m reading Daring Greatly, then I’m going to read The Desire Map!” 

Woah, slow down a little! All of those books are great (and you should definitely read them!) but don’t let yourself get caught up with reading so much that you don’t practice some of the stuff you have read. Action cures a lot.

Getting yoga and gym memberships

Signing up for a yoga and/or gym membership seemed like such a great idea. Maybe you were enticed by the promotional New Year’s pricing and felt like you just had to sign up. Getting a gym membership seemed like the perfect motivation for exercising more. Now every month you’re dropping $30-100 a month on something you might only be using whenever you have a motivation boost.

Small “treat yo self” splurges

A Starbucks latte is a powerful thing. Mainly because it’s loaded with sugar and only about %5 coffee a motivator for people. The perfect “pick me up” to starting something. Even if you only buy one $5 dollar latte per week, that means your motivation boost is costing you around $20 per month.

We’re addicted to constantly seeking out motivation. We have a price tag placed on it, get it, then it runs out, and we want more. It’s a good thing to get started with but not all that reliable.

Related: Creating Positivity on Demand

Building new habits is hard and solely using a motivation boost to develop them isn’t going to go over well. Motivation is fleeting while consistency and daily actions are constant.

The price tag of motivation. How much are you spending on it? 

The Grade That Matters Most After College

Looking to build credit and get your first credit card? Credit cards don't have to be evil! Click through for advice on picking your first credit card

When I graduated college, I was super pumped. No more worrying about grades! Wo0o0o! Staying up late finishing a paper and obsessing over getting a certain grade were no longer priorities. So long!

It felt great graduating college and moving on into the world. As a “newly minted” adult, I starting going through the motions of the real world: getting a full-time job, apartment, and dealing with the constant recommendations of people telling me I needed to buy a new car or get a house. Bleh.

As I started going through life after college, an alarming (at least to me) realization popped up. Over. And over. And over. Credit scores and reports. They were important. Who knew? Obviously not me.

The people at Wells Fargo bank knew. Every time I came into the bank during college, they tried to get me to sign up for their cash back  college credit card. I shrugged them off every time. Years of being told credit cards were horrible things kept me away from them. It wasn’t as if anyone had ever discussed the importance of a credit score.

Building credit after college became an afterthought. Then I got denied a cell phone contract, denied apartment lease, and realized I would have to pay deposits on utilities due to my low credit score. The epiphany moment happened quickly afterward. Having a good credit score was important and I needed to get set on improving mine.

The only conversation I remembered having about the importance of good credit was when I was in middle school. My 8th-grade math teacher briefly mentioned how it was a really good thing to have when it came to qualifying for loans and getting lower interest rates.

Being 13-years-old and more concerned with what TV show I was going to watch, the information went through one ear and out the other. Armed with a vague idea of the importance of building credit after college, I set out to get my first credit card.

A week later, I received my new form of plastic in the mail and started charging small things to it: my cell phone bill, gym membership, and subscriptions. The credit card was cash back and every time I reached $25 in rewards, the amount would be deposited into my savings account. Awesome!

I still have that card to this day. A no frills card without much of a rewards program. I keep it because of the $0 annual fee and credit history that comes along with it.

Initially, even with a newly acquired credit card, I still didn’t know what went into a credit score. How exactly could I improve it? Eventually, I stated to learn.

Your credit score breaks down into different categories:

  • 35% | payment history (pay your bills on time and sign up for auto-pay)
  • 30% | amounts owed
  • 15% | length of credit history (why I still keep my first credit card open, generally a longer credit history will increase your score)
  • 10% | new credit (opening several new credit cards in short period of time can hurt your score)
  • 10% | credit mix  (credit cards, installment loans, mortgage, retail accounts)

When people set out to get their first credit card, it can be overwhelming. Loads of articles all over the internet talk about ways to maximize rewards and travel hacking. That’s all I heard about when I looked into getting a credit card. Fortunately, I was able to find helpful guides.

I have a few tips for someone who is looking to get their first credit card. Because after all, credit cards don’t have to be evil. You don’t have to cut them up and swear them off (thank you Dave Ramsey). They can even, *gasp*, be beneficial.

Don’t focus on rewards too much (yet)

Don’t focus too much on which credit card to get based on the rewards program. The focus when getting your first credit card is to have it for a while in order to build credit history.

Pay in FULL every month

Disregard bad advice like ones that say to carry a balance on your credit card every month. Don’t. If you’re charging something to your credit card, make sure it’s something you can pay off within 30 days. Pay the full amount each and every month.

Try to see if you can set up auto-pay to make sure you make on-time payments every month.

Don’t open up a lot of new credit cards

Focus on just having one credit card for the first several months, especially if you’re starting out by building credit after college.  New credit accounts lower your average account age which have a large affect on your credit score if you don’t have much other credit information.

Get a credit card with no annual fee, know the APR, and hidden fees

Annual fees can suck. They usually are around $59-95 per year. Be aware of credit cards that have an $0 intro annual fee for the first year. You don’t want one at all, at least for your first credit card.

Your credit card’s annual percentage rate (APR) is the amount you are charged on your average daily balance if you don’t pay off your charges in full every month. Understand what your APR is and the difference between the credit card’s introductory APR and the regular APR it will have once the introductory period is over.

Other fees to watch out for: foreign transaction fee (fee, usually around 3%, charged when you make purchases overseas), late payment fee (usually $30-35 and charged when you don’t make at least minimum payment on time).

Keep credit utilization low

When you get your first credit card, you will have a credit limit. Try not to use more than 30% of that credit limit. For example, say you get a credit card and the limit is $1000 a month. Try not to charge more than $300 per month to the card.

Credit utilization makes up 30% of your credit score.

Once you are set to start building credit after college, look at credit card comparison tools and figure out what the best card is for you.

Do you use credit cards? How did you go about getting your first one? 

Money Realizations Through Comfort Zones

Often times, the best way to figure out how to cut expenses is to go outside your comfort zone.

Comfort zones. You usually hear about them from some motivational TED talk or those inspiration junk food posts on Instagram. They’re most often used to help people toss their fears and worries and try new things.

Could stepping out of your comfort zone force you to get better with your money and see what type of expenses matter? I think so. Actually, scratch that, I know so.

It’s possible to have money realizations through comfort zones. It’s even more likely when you step out of them.

Before I stepped into the world of personal finance, I always thought I was good with money. I didn’t have credit card debt, didn’t have a car payment, put money into savings every month, and my student loans were manageable.

Well I wasn’t so good at money. I didn’t have credit cards so I wasn’t actively help build my credit as much as I could. I saved money but never considered combing through my expenses to see where I could cut back. And small purchases that added up were what killed my bank account every month. Things weren’t so good after all. Wha oh.

In a change of pace, I moved to Thailand for a new job and everything suddenly became different. I’m sure you’ve read the typical internet story of someone going out of their comfort zone and ~*~realizing their true potential~*~. Well this one is about how my view on money and monthly expenses changed.

When compared to western standards, Thailand has a low cost of living. Moving here caused me to get out of my comfort zone money wise. As time passed on, the expenses I had in my previous situation didn’t seem so necessary.

My entertainment “fun” budget got drastically altered. I no longer had Hulu, Amazon Prime, and Spotify. Money spent on movie rentals and tickets were tossed. These were all individually small expenses that I justified under “having things that bring me entertainment and joy”.

My food budget changed. With a time consuming full time job and a long commute, I used to eat out a lot. Having food expenses that were out of whack made budgeting confusing. Constantly seeing the smiling Thailand street vendors and the act of intentionally eating better finally made my food expenses become more under control.

The biggest thing I got rid of was my auto insurance. I really don’t like driving cars. Good public transportation is a better fit. It’s what made me so resistant towards the common act of people my age financing new cars when they really shouldn’t.

Now my monthly expenses total less than what I was spending back in my previous situation in the U.S. Thailand is great but I know I’m not going to stay here for super long so returning to the U.S. (and having a higher standard of living) is a given. My mindset, however, is here to stay.

My perspective towards “need” expenses has changed a lot.

Being here, in this new place, caused me to question expenses I normally would have shrugged off.

Hulu subscription? Oh, well it’s only $8.65 a month and I get to keep up with my favorite shows! Spending $8 eating out? Oh, it’s not that much, plus I’m in a hurry! Paying more than I needed to for auto insurance (because it’s not like I could have negotiated it or anything).

I mention this because so often people say they can’t save much money because most of it goes to bills and expenses every month. For some people that may be the situation, so growing income would be a better focus to have. For most people, they can cut their expenses more.

We have to periodically remind ourselves of what is essential. Excess often lies in familiarity and comfort.

Has your mindset towards certain expenses changed? What things are worth and not-worth cutting out? 

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