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Money Management

How Do Expats Make International Payments?

A key question that has been a regular concern for most expats is being able to take care of their financial obligations even when they are away from home. After all, one can never really let go of their connections to home even if they are somewhere else growing their corporate careers. It is for this reason that expats should learn how to use an offshore bank account to facilitate their financial transactions even from afar. 

In very simple terms, an offshore bank account is a bank account hosted by a bank based in a location different from where the account owner is located. For most of us, bank accounts are opened in a local bank, one that we can visit on a regular basis to take care of our financial transactions. 

Not surprisingly, the international nature of business coupled with our increasing reliance on the interne has spawned various methods through which one can manage their bank accounts from a distance. This is something that expats can certainly take advantage of. Instead of having to talk to bank personnel face-to-face or on the phone, banking mobility tools now allow expats to finance their bank accounts, authorize payments, receive payments from others, even issue checks from a distance. Offshore bank accounts also offer the advantage of gaining access to perks and benefits like free international transfers, travel insurance for the account owner, and complete reliability in terms of transaction security and accessibility. 

Whether you want your money to be saved in euro, dollar, even pound sterling and other local currencies, as well as gain the ability to withdraw your money via debit cards in your chosen currency, as well as pay your bills in a timely manner or send money to your family back home, offshore bank accounts offer undeniable flexibility and advantage versus local accounts that may charge exorbitant amounts just to execute simple transactions over the wire. 

Expats should use an offshore bank account to take care of their international payments so they can reap the benefits of a bank account specifically geared to cover cross-border transactions. As an expat, nothing else can be more convenient. 

Money Management

Saving For An Emergency Fund Isn’t Just About Security

Security

I’m still currently saving up for my emergency fund. I’m not even half way there, but it’s getting there.

Along this journey I’ve realized that saving for an emergency fund is a lot like delayed gratification. Once I save up for the EF I’ll finally have the end result, which is security. But along the way I’m learning about delayed gratification. It teaches you that it doesn’t kill you to wait until you save up to have enough money. With an EF you can’t cheat your way with a credit card, so it is forced delayed gratification.

But as you go through this financial journey you can actually think about how you feel about waiting, and can cope with those feelings. You’ll realize that if you take your focus off of that object (EF, TV, Car, Whatever you want to buy without saving) you don’t miss it. That’s why waiting a couple of days before you make a big purchase ($50 for me) helps make you think about if you really need it or not.

I’m also learning that it’s hard to get what you want and there are bumps along the way. Things keep popping up (Fixing my truck) that prevent me from contributing to it, but I know in the end it’s well worth the wait. And there are always payday loans online.

I know that once my EF is full I’ll be excited and know that I earned that security and my money isn’t being wasted on it.

Have you learned any lessons from your emergency fund?

Money Management

How Much Can You Afford to Spend on an Education?

Everyone says that getting an education is the best way to earn more and have a better life. While statistically degree holders do earn more than those without a degree, many people graduate college buried in student loans and then struggle to get out for many years after. How can you determine if a college education is right for you and how much you can afford to spend?

Examine Your Options

Is college or an online university something that you are interested in? What do you want to do with your life? To determine if you should head off to college, first you have to figure out what you want to do. Going to college, spending years working toward nothing and then dropping out is a huge waste of money and should be avoided at all costs. Before you make a decision about school, first make some decisions about life so that you will know what you want.

Figure Out a Budget

When it comes to education, there are some huge variations when it comes to cost. Some schools, like community colleges, are fairly inexpensive and you can go to school for just a few thousand a year. Other schools, like private universities, can be very expensive and cost tens of thousands or more each year. If you are going to graduate with $100,000 in loans, you may be getting in over your head. On the other hand, if you can pay your expenses and tuition while going to schools, it may be a financially achievable option. Education just like any other financial decision should be carefully evaluated to determine its place in your budget. Student loans unlike other forms of debt are not eliminated in bankruptcy filings. You will be responsible for paying back these loans no matter what. Do not get in deeper than you can handle. Surf the Net for undergraduate scholarships.

Finding Funding

Many times, funding for education is available. If you want to go to school, you are foolish not to examine your possibilities. Does your employer pay for classes? If so, it may be a good idea to take a class or two on your boss’ dime. Do you qualify for scholarships or grants? There are available options for school goers that don’t have to be paid back. Look into these and see what you qualify for. Sometimes an education is more affordable than you might think.

An education is great, however it is foolish to get an education without thinking about if you need it and how you will pay for it. Debt is debt, and if you don’t have a plan, student loans can quickly decimate your financial goals. Before jumping into debt for an education, first consider all your possibilities and find the option that is best for you.

Guest Post Money Management

Read This Before You Hire a Financial Advisor

Tim Chen is founder and CEO of NerdWallet.com, a website that helps consumers to compare credit card rewards.  Tim also educates consumers about credit cards and debt management at the Forbes Moneybuilder Blog, the Huffington Post, and the Christian Science Monitor.

 

Tempted to Seek Out Personal Finance Advice?  Look in the Mirror First

While managing your finances is certainly not an easy task, personal finance at its most basic level is simply making sure that you are earning more than you are spending, and that your savings will be able to carry you through life after you’ve stopped working full-time.

Even though it sounds simple enough, there are a lot of moving pieces to balance in a financial package, including investments, insurance, credit cards, mortgages and more. And with the global economic downturn humbling many of us, more and more people are turning to outside advisors for personal finance help.

But even hiring outside help can be confusing if you don’t fully understand what you’re getting yourself into, and it’s certainly not cheap. So before you pay someone else, your time and effort is probably best spent uncovering the answers to some basic questions and gaining a deeper understanding of your inclinations, your financial habits, and what you can do to control them.

You’ve got questions?  You’ve got answers.

Answers to such questions may be difficult to face, but should not be difficult to find. Taking greater control of your personal finances means first and foremost analyzing your income and your personal daily expenditures.  All those bank statements may seem foreboding, but they are great tools for analyzing your personal cash flow and figuring out how to maximize it.

You might even want to try a finance website, such as Mint.com (free) or Quicken (fairly cheap) to get a clear picture of your finances without wading through all that paperwork. Transactions like charges to your card are recorded automatically and easy to see.  And they display easy-to-read graphs and charts, showing you exactly how much you’ve spent on shopping or dining out in the last few months.  Without such hard data, most of us will tend to underestimate how much we’re spending frivolously. These apps will also allow you to sign up to pay bills online and spread your payments around, giving you more control over what comes in and what goes out.

Credit cards are another good way to keep track of your spending.  Most credit card companies issue very detailed statements, breaking your spending down into categories and issuing quarterly or annual summaries of where your money went.  American Express in particular has a number of such online tools that are meant specifically to give you better insight into your habits, and therefore better control over them.

Plus, knowing where you use your credit cards the most also has the advantage of helping you to maximize the money you can get back in rewards. For example, if you find that you spend more money on restaurants than you originally thought, you would do well to get a Costco Amex card or a Citi Forward card as your main credit card, and use it to earn money back on that spending.  Alternatively, if your main expense is gas for your car, you would be better off with a gas credit card like the PenFed Platinum Cashback and earn 5% rebates.

Knowing yourself pays off.  Learning about yourself in this way will give you a clearer sense of what steps to take to eliminate unnecessary personal spending, and to make sure you’re getting the best discounts or rebates on the necessary spending.

One last option before you go the financial advisor route

Even after you’ve gotten a handle on how and where you tend to spend money, it’s not always easy to make the necessary changes.  Part of understanding your own inclinations is knowing your weaknesses and getting help when you need it.

There are plenty of books out there that are intended to help you overcome your own psychology, like Ramit Sethi’s I Will Teach You To Be Rich.  But you may even be better off with a “pseudo-advisor” like Suze Orman or Dave Ramsey.  Gurus like this have well-respected and proven plans for eliminating debt, controlling spending, and getting started saving.  Plus they each have a large community of people like you that you can talk to, share war stories with, and who will encourage you along the way.  This is basically what a financial advisor would do, except you’re still in control and it’s not nearly as expensive in the long run.

If you’ve had a financial advisor, what was your experience like? If not, have you considered trying one?

 

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photo credit: Tony the Misfit