The following was written as a guest post for MI:

Learning to make your money work for you is a good idea for anyone who has suffered from the economy in recent years. There are several things that can be done to start earning a return on your money. Pick the ones that best suit your needs and you could soon see a turnaround in your finances, provided you pick a method and stay with it.

1. One of the first things that should be done is to start saving money and when you compare savings accounts you can choose the one that has the most favorable terms and interest rates. When you compare savings accounts it lets you look at a variety of factors that could impact your money’s earnings potential. This encompasses everything from the fees that the bank charges to how high their interest rates are. Putting aside even a few dollars a month after you compare savings accounts can soon add up to a substantial amount.
2. Paying off debt is a good way to save a lot of money that would otherwise have to be spent on interest. The highest interest debts should always be paid off first. This typically includes credit cards and store cards. With credit cards it is possible to switch to a low-interest card to realize savings of potentially hundreds of dollars a year. These low-interest cards should still be paid off as quickly as possible to avoid having to pay any unnecessary interest that does nothing to increase your wealth.
3. Use coupons and shop when there are sales in stores. Many grocery stores have sales on canned or frozen goods. This is a good time to stock up on essentials and save money. When there is so much food on hand at home there is no need to go to restaurants. Going to restaurants is an easy way to get a meal but it can really cut into the monthly budget if moderation is not used. There are many things that can be done on a daily basis to save money, such as foregoing the daily coffee at the upmarket coffee shop.
4. Investing in a Roth IRA or similar plan is a great idea for those who are younger. The money invested goes in after taxes, but by the time retirement age is reached there will not be any taxes. If your company has a match this is a good way to double the savings you put in. For those who are content to let their money grow slowly but steadily and in a completely safe manner, a certificate of deposit may be a good choice. This provides a better return than a savings account and the CDs are FDIC-insured. A good option is to consult with an investment specialist and decide on the best investment option for your needs.
5. Taking courses or seminars can be a good way to further educate yourself in your chosen career. This increased knowledge and expertise can lead to career advancement and promotion that may not otherwise have been possible. Investing in yourself is a good way to kick-start your career and move up the ladder. People who are willing to put in the extra effort are always noticed by their employers. Another way to invest in yourself is to start a business on the side doing something you love. Put a bit of money into learning more about something you already know or are new at. This can lead to new business opportunities and financial growth.

No, I haven’t lost my mind. I know it isn’t New Year in most of the world, but here in Thailand it is. It is the reason things have been quiet around Money Infant and if fact around the entire internet where I’m concerned over the past 10 days or so and all I can say is one word…Songkran.

Here’s a picture showing the scale of the water fight. This was taken on Silom Road, one of the major business districts in Bangkok. Think of it as equivalent to 5th Avenue in Manhattan or perhaps Mission St. in San Francisco. Needless to say, nothing is getting done here today other than fun!

And for a ground level view of the fun take a look at this short video…

As crazy as Bangkok is during Songkran there are actually better places to celebrate such as Pattaya or Chiang Mai, which is famed for its Songkran celebrations that can span up to 10 days some years!

Contrary to what you would think from the picture and video above, Songkran actually began as a religious holiday (it still is one too), but the Thais with their penchant for “sanook” have made it into what is likely to be one of the best parties in the world. Here’s a slightly more detailed article about Songkran that I wrote several years ago.

Significance of Songkran in Thailand

The word “Songkran” originally comes from the Sanskrit language and means “move into”, referring to the orbit of the sun moving into Aries. It marks the end of a year long cycle and is the beginning of the new solar year. Thus Songkran is the Thai New Year celebration.

Obviously as a New Year celebration Songkran is a time for new beginnings, and it is also considered to be a time for thanksgiving. It is a time for people to reflect on acts of thoughtfulness and kindness that they have experienced and to consider how these acts bring peace, happiness and well-being. It is also a time for reunions and most Thai’s return to their family homes to renew family ties.

Songkran embodies the traditional Thai cultural values and the underlying significance of Songkran is the process of purification and cleansing. This is a cleansing of all evils, ills and misfortunes that may have occurred and starting the New Year fresh with all the is good and pure. Water is symbolic of the cleaning process and signifies purity.

My Songkran Recomendation

As fun as Songkran is in Bangkok, I would recommend Chiang Mai as a better place to celebrate. The party is not as crazed and frenetic and it also last for a longer time. And I find that those in Chiang Mai are not as aggressive as those in Bangkok.

As for us, we headed south to the beaches of Krabi for a more sedate Songkran. Uncharacteristically I actually got my camera out down there and will have some photos posted later for those of you who might be interested in coming to Thailand for a beach holiday. I haven’t been everywhere in the country yet, but so far Krabi is probably tops in my book for a beach destination.

It’s always fun for me to go through the carnival submissions and see all the new and interesting ideas being put forth by bloggers I might not always read. These folks have put a lot of time, thought and effort into sharing ways to help improve your personal finance. Show your appreciation by heading over to their posts and leaving a comment about what they’ve written.

Michelle @ See Debt Run focuses on career based cash flow with her Resume Redo – I did my good deed for the day when I helped a neighbor with the worst excuse for a resume I’ve ever seen in my life. I help her and share tips to help you get you build your job resume.

Van Beek @ Stock Trend Investing gives us the risks involved in 2 popular stock based strategies for improved cash flow wth Buy and Hold Dividend versus Trend Following Risks – When you apply a certain stock investing strategy, you implicitly choose to accept the risks that go with that strategy. Here we describe the specific risks for two well-know and often applied strategies.

The Happy Homeowner @ The Happy Homeowner helps us improve cash flow by reducing our spending with Easy Ways to Save Money – We all know we should be saving more. But how do you cut back when the budget is already stretched? This post highlights some very easy ways to save money no matter what your financial situation may be!

Jana @ Daily Money Shot helps maintain a strong cash flow by Planning for the unexpected – Saving money means that when important, unplanned expenses arise, the money is there to spend

James @ Short Road To Retirement teache us how to create stable cash flow with Need a Predictable Income Stream? Use a Bond Ladder – Discusses what a bond ladder is, how it can protect you against rising interest rates and provide a decent yielding income stream.

Jeremy @ Modest Money improves cash flow by utilizing the labor of others in Outsourcing Online Business Tasks To Earn More Money – Do you run one of the many online business that could benefit tremendously from outsourcing? Read about how a seasoned internet marketing professional learned how to use outsourcing to earn more money.

MMD @ MyMoneyDesign helps us plan for future cash flow by asking Which is Better – Term or Permanent Life Insurance? – Part 2 – Should you buy cheaper Term insurance that will expire or the more expensive Permanent insurance that is guaranteed for life? Let me share with you two real quotes I received, and we’ll crunch the numbers to figure out which one is the better alternative.

Sean @ Free Snatcher gets rid of debt and improves current cash flow with 5 Tips to Help you Become Debt Free – Eliminating your debt is the first step to becoming Financially free. Here are 5 steps to painlessly become debt free. Thanks for your consideration.

Dr. Dean @ The Millionaire Nurse Blog wonders if it is always wise to improve cash flow by asking Save on Gas: At The Expense Of Our Marriage? – A mars and venus twist on the “improving your gas mileage” article.

Thanks to all the great bloggers who submitted to this weeks carnival. I hope you all enjoyed reading their posts as much as I did. Stop back next week for another set of articles that will help you cut back on your expenses, increase your income and generally improve your personal cash flow and wealth!

I’m not certain when and where it all started (perhaps with CouchSurfing?), but collaborative consumption is making a huge splash these days thanks to technological advances and the peer to peer (P2P) social community model. In case you aren’t aware of what collaborative consumption is it can be defined as an economic model based on sharing, swapping, bartering, trading or renting access rather than purchasing goods or services directly. It’s not a new idea (think public libraries or exchange type stores), but it is one that has been redefined by technology. In 2010, collaborative consumption was named one of TIME Magazine’s 10 ideas that will change the world.

Banking:
Here’s one area most of you are probably familiar with. Peer to Peer Lending (P2P Lending) has a large following and is actually become more and more mainstream with sites such as Prosper and Lending Tree and the U.K. based Zopa having pretty large followings and advocates. The basic model is that everyday people who haven’t been able to get credit through traditional means (banks and credit unions) can use the P2P lenders to source small loans from their peers. Those lending the money get the principle back as well as interest payments. So far the model seems to be working with default rates ranging from 5.2% (Prosper) to a mere 0.9% (Zopa). And with ROI’s ranging from 4.3% (Lending Tree) to 9.3% (Prosper) investors are making out like bandits compared with the interest rates being offered by banks and on short term treasuries.

Housing:
Here’s another strong area in collaborative consumption and it all started with CouchSurfing. Back in 1999 Casey Fenton, the founder of CouchSurfing, sent an email to 1500 students at the University of Iceland looking for a place to crash after an unexpected flight from Boston to Iceland. Over 50 students responded and thus the idea of CouchSurfing was born (although the website didn’t come along until 4 years later).

While CouchSurfing provides free accommodations, a new and rapidly growing service called Airbnb let’s you post your spare room, apartment or house on their site for potential renters from around the world. One of the co-founders of Airbnb, Brian Chesky, says that the average New York users of the site makes $21,000 per year. Maybe not enough to live in the Big Apple, but certainly not chump change either.

One further addition to the travel collaboration field is startup Roomorama (launched in 2009). They are extending the travel collaboration experience by adding special rates, tours, laundry service, even language classes to their offerings. I suppose they are the upscale version of collaborative travel.

Transportation:
If you have a car you may be able to make some profit from it as well. Getaround.com let’s you list your car for rental on an hourly basis. It’s in Beta and the selection isn’t huge, but there are plenty of different models on there. Those looking for a splurge can rent a Tesla Roadster for just $75/hr or if you are more frugal look into the Volvo V70 rental at just $5.75/hr. Most cars rent in the $6-10/hr range. One other downside is that it appears to be limited to California right now.

If you are looking for more flexibility then ZipCar is another option. I believe they were the first on the scene to offer car sharing and as of now Zipcars live in 50+ cities across North America and the UK as well as 100+ university campuses across North America. They have an interesting model and a pretty large selection of cars too. Rates vary from city to city so you’ll have to check out their website to see rates for your area, but they seem pretty reasonable to me. The ZipCars are parked in various locations (usually off street parking) throughout each city and access to the cars is through the ZipCard you receive when you become a member. Rentals can be by the hour or by the day and can be done either online or by phone. ZipCar isn’t a way to make money (they own their own fleet), but it can be a good way to save money by foregoing traditional car ownership.

ParkatmyHouse is a unique collaborative consumption startup that offers users the ability to rent out their driveways or other parking spaces. Rental rates for spaces in major cities run about $12/day to $200/mo with rates in outlying areas about half that. If you have an unused parking space this is a great way to utilize an untapped asset. ParkatmyHouse is currently available in the UK, Ireland, Canada, the USA, Australia, New Zealand and The Netherlands and considering their partnership with BMW, I can assume they will continue to grow.

Food:
If you have cooking skills or extra land you aren’t using you can even make some extra cash there. Housebites is a site where you can order gourmet food delivered to your house, or if you are an enterprising chef (or chef wannabe) you can join up and cook for others. Small downside…it’s only available in the U.K. at the moment.

Another food focused U.K. site is Landshare (they are also in Canada and Australia and are looking to expand) where you can rent out land for others to use as garden space. Or if you aren’t interested in the cash you can barter for a share of the produce. What a great way to utilize unused growing space AND get fresh produce for free.

If anyone knows about sites similar to Housebites or Landshare operating in the U.S. please leave a comment below.

Education and Tourism:
As you might imagine, there are plenty of opportunities to use your existing skills and knowledge to make a side income. Those who are good teachers can sign up for sites such as Tutorspree and make cash in their spare time tutoring students in any subject you can imagine. The site claims that top tutors make $1,000- $2,000 a month on a part time basis. If you are more interested in teaching in groups you can also do that at sites such as Skillshare whose tagline is “Learn anything from anyone”. There are already thousands of teachers doing just that in over 90 cities around the world.

Another interesting concept in learning is SideTour which lets you share unique one of a kind experiences with others. Current SideTours include a day long discovery of the Lower East Side of Manhattan, learning how to make fresh pasta from a Brooklyn chef, a consignment store trek hosted by a fashion reporter and many other walking tours focused on museums, neighborhoods, food and drink and photography. Currently SideTour is only available in New York. Pity.

If you are looking for a tour guide in other parts of the world though you do have an option. The site is called GuideHop and it gives you a way to find experienced locals in places such as Egypt, Belize and Italy to act as your personal tour guide.

Other Collaborative Consumption Sites:
TaskRabbit is a site where you can get paid to do tasks for others. This includes running errands, shopping, event planning, house chores, research and many other tasks. It works on an auction type system, so when you place a task that needs to be completed all the qualified Task Rabbits are free to bid on your task. The lowest bidder gets the job task.

If buying and selling for a profit are your thing there are now alternatives to Craigslist and eBay too. Called “hyperlocal” exchanges because they operate on a local scale, these marketplaces bring people together to buy, sell and barter goods and services. Included in this growing list are NeighborGoods, Zaarly and TradePal.

As you can see, collaborative consumption is a strong trend and has been expanding rapidly over the past few years. You can literally make money from almost everything you own and any knowledge or skills you have. Currently the largest opportunities are in urban areas, but this trend is expanding into smaller suburban areas as well. Perhaps in 10 years time we will all be sharing and bartering in lieu of the rampant consumerism that the final decades of the 20th century saw.

At last the much hyped and long awaited Bangkok budget! Keep in mind that this budget is for 2 adults and a 2 year old living in what is considered one of the better areas of Bangkok. If you are single or willing to cut back on food and conveniences you can probably get by on less than we are currently. You can also get by on less in other areas of Thailand such as Chiang Mai, Hua Hin, Pattaya or virtually any of the islands (Phuket excepted). In fact, we are currently planning on moving out of Bangkok ourselves to cut back a bit on expenses. So, consider this an interim budget and look for an updated version sometime in July. You didn’t really think this would be the end of our Thailand expenses did you?

Please note that the budget does not include costs for health insurance, child support and student loan payments as those are all handled out of my US accounts. Those 3 items add $800/mo to our expenses. I typically do a wire transfer to cover 6 months of our expenses here in Thailand and then top up the US account to provide the next 6 months worth. Savings and investments are held in the US, although we have been putting a bit aside here to test the waters of the Thai stock market. More to come on that in future months. This is a very basic expenses only budget and is quite fixed. By that I mean we stick to an exact amount each month and do not go over. If we come in under that money goes into a slush fund that can be used for whatever we wish (so far it’s been travel).

Last, but not least, please feel free to compare our costs with what it costs to live like a king in Bangkok. As you can see we’re not quite there yet.

As you can see we are a bit high on quite a few expenses and can make cuts (especially if we get out of Bangkok). Our apartment is expensive, although when you consider the neighborhood and size (193 sqm) it is actually cheap. Similar places in our neighborhood rent for 2-3x this amount.

Food is another contentious area. Honestly we’ve been slowly cutting back on this. When we arrived we were spending more like 26,000/mo on food so progress is being made. In all honesty we should be able to cut this to 15,000/mo or less.

Internet, cable and water are pretty standard fare although we are considering dropping the cable. We watch maybe 2-3 movies a month and I watch CNBC maybe 30 minutes a day. Electric is quite high, but that is due to air conditioner usage. Really I’m not sure how to cut this one as we usually only have the air con running in one bedroom to sleep at night. It’s probable that with a smaller place our electric costs will also drop. It will bear watching in the July update.

Childcare is definitely a luxury expense that can be dropped, but it works well for us now. In addition to caring for our daughter the nanny also does ironing and cooks both breakfast and lunch. In the realm of trading money for time its a very good deal. Add to that the fact that if she wasn’t here we would probably buy food from outside for lunch and net/net its a damn good deal. Medical is an emergency fund that is nearly fully funded so that expense can drop, although we also pay for insurance from our account in the States.

Blow money is also very high, but we use that money for all sorts of miscellaneous expenses. Restaurants, taxi’s, BTS/MRT passes, beer and cigarettes, toys for baby, clothing purchases and pretty much anything else that isn’t in the budget comes out of the blow money. Even so, I usually have 1-2000 left at the end of the month that goes into the slush fund. We also put aside any 50 baht notes we get to add to the slush fund. This usually adds up to 500-1000 per month.

So, there you have it. In total, for a family of 3 we are spending 82,029THB per month to live in the capital of Thailand. Even for a family, this number can be cut back quite drastically and if we wanted to live a more spartan existence I would say we could get by on 45,000THB per month.

What do you all think? Are we living the life of Riley here in Bangkok? If it was you where would you cut back on expenses? Or, where would you be spending more? And how does this compare with your expenses in the West?

I know that most of us who blog are stats junkies so it is almost required that you feed the readers with some sort of stats occasionally. Below is my attempt to keep you all happy, plus it gives me an excuse to track these things on a monthly basis and publish them for all posterity.

As you can see, March was quite a growth month with visitors and pageviews up nearly 300%! It would be nice to think I can keep that torrid pace up going forward…we’ll see. Consistent with the growth in traffic there was a drop of over 170,000 in my Alexa rank and with momentum like that I’m sure I can break through 100,000 by the end of April.

On the negative side, time on site and bounce rate both took a small hit. They are still not bad, but I am hoping this isn’t the beginning of a downward trend.

My University Money – The Carnival of Financial Camaraderie #26

Step Away From the Mall – Who let the blogs out!? #5

Money Reasons – Yakezie Carnival – The Early Spring Jump Edition!

Cult of Money – Sunday devotional links

Daily Money Shot – Financial Simplicity Carnival #4: The Rushified edition

See Debt Run – Sunday Link Lovefest

Finance Product Reviews – Carnival of Retirement, Welcome to FPR Edition

Thousandaire – Carnival of Money Pros #4 Scramble With Friends

Motivating Mum – Totally Money Blog Carnival #60

Credit Karma – Festival of Frugality #329

Modest Money – End of March 2012 Blog Update

MoneyPlan SOS – sos056 Jeff Rose starts a Roth IRA Movement

Have you ever seen the expatriate sites that claim you can move overseas and live like a king on $3000 or $5000 a month? I have, even about Bangkok and I thought that before I give you some insight into my own Bangkok budget I would put to rest the rumors of living like a king on $5000 a month in Bangkok. Hopefully it will help you see that anywhere in the world can be as expensive as you like and will also provide some contrast to my own modest lifestyle in The Big Mango.

It’s true that you can find small studio apartments (30sqm) in Bangkok for less than 10,000THB ($300) per month, but that sure isn’t how royalty live. No way! If you are planning on living like a king in Bangkok you will need a penthouse apartment at the very least. So, what is the going rate for royal digs in Bangkok?

Several condominiums in the heart of Bangkok can offer you a top floor penthouse with commanding views of the city, complete western amenities, a balcony pool, 600sqm (6500 sqf) of space and even 2 floors. The typical price for this luxury is around 300,000THB ($10,000) and right there goes any illusions of living like a king on $5000 a month. You’ll spend twice that just on your apartment and we are only getting started. Of course you could always buy. Penthouses in the 600sqm range go for 200-250 million baht ($6.67 to 8.33 million). Bangkok is definitely one city where renting is almost always cheaper then buying.

3 Bedroom Duplex Sukhumvit 39 Just 230,000THB/mo

Food: Eating Like a King

Staples like rice and chicken are pretty darn cheap in Bangkok and you can get many varieties of dinner for 30-40THB ($1 – $1.33). Of course that is for the peasants, a king requires meals and foods meant for a more refined palate. If you want to have dinner cooked at home every night you can probably get by with a budget of 70,000THB per month of so. This will get you prime aged US Angus beef for 2000THB/kilo ($30/lb), the finest grass fed Wagyu beef for 4000THB/kilo ($60/lb) and sushi grade tuna for ????/kilo ($??/lb). While Thais don’t eat cheese you can still find a wide selection of cheeses from both Europe and the US.

Of course it’s relaxing to eat at home, but sometimes you’ll crave the company of others and the decadence of world class restaurant cooking and service. Bangkok is home to thousands of restaurants so if eating out is your thing you can try a different place every night if you like. Many of the restaurants are moderately priced, if they were located in another country. You can get a good to great meal at any number of Bangkok restaurants for 500-1500THB ($17-30) per person (not including drinks…I’ll talk about that later). If you are looking for the height of culinary expertise in Bangkok though you will find that such delights don’t come cheaply.

Only the best for the king

Take a look at this menu from Reflexions at the Plaza Athenee. As you can see, it would be easy to spend 3000-4000THB ($100-135) person. Other great restaurants with similar price tags and up include both Le Normandie and Lord Jim’s at the Mandarin Oriental, Tables at the Grand Hyatt, The Dome at Lebua and quite a few others. Set menus at some top restaurants begin at 5000THB ($167). Assuming you won’t be dining alone and you can double all of those prices

I think it is safe to say that dining like a king in Bangkok could easily cost you upwards of 150,000THB ($5000) per month.

Dining like a king at the top of the world

Drinks and Nightlife

If you are the type of royalty who enjoys going out, being seen and partying the night away be ready to pawn the royal jewels. Having a great time in Bangkok is not much cheaper than in other cities around the world. Sure you can find cheap beer bars and nurse a warm Singha for 60THB ($2), but that isn’t royal treatment. It is far more likely that you will want to hit up the nightspots like Q Bar, Bed Supperclub and RCA Plaza. Admission to these hotspots is typically free (no cover), but that’s where your freebies end. It’s typical to buy a bottle of whiskey or other spirits in the Thai clubs and the club provides the ice and mixers. Johnny Walker Black Label is a very popular choice and you can expect each bottle to set you back somewhere in the neighborhood of 2000THB ($65). Or if vodka is your thing Grey Goose will set you back just 3000THB ($100) per bottle. Many of the clubs also carry more premium selections, but since they are WAY out of my league I can’t quote prices. I wouldn’t be surprised though if it was possible to spend 10,000THB ($335) or more on a bottle of whiskey or vodka.

What I can tell you though is if you are a wine drinker you could easily rack up tens of thousands in one night. Wine is heavily taxed here and because it is a relatively new trend amongst the Thais there is a limited selection, but here’s a quick glimpse:

• Your basic Australian and South American whites and reds are priced between 600-1000THB ($20-35)
• White and red French ‘Villages’ type wines for 750-1500THB ($25-50)
• Kendall Jackson Chardonnay – 1250THB ($42). I’m pretty sure I didn’t pay more than $12-14 for this in the US.
• Cakebread Sauvignon Blanc and Grgich Hills Chardonnay – 3300THB ($110)
• Caymus Vineyards 08 Cabernet – 3300THB ($110). You can also get the Caymus Select 08 for 6300THB ($210)
• My favorite Stag’s Leap 01 for 6000THB ($200)
• Opus One – 12,000THB ($400)
• Chatuea Mouton Rothschilds 01 – 38,700THB ($1290) or if you are cheap you can have the 02 for just 17,600THB ($585)
• If you want to enjoy a bottle of wine with your dinner at a restaurant expect to pay 2-3x the retail price

As you can see, it could run you literally hundreds of thousands of Thai baht per month if you enjoy wine or drinks on a daily basis. Even if you are only a weekend drinker I wouldn’t be surprised to see you blow through over 100,000THB ($3300) in a month (assuming you had unlimited funds).

Servants and More

Having servants is certainly a luxury reserved for royalty and the very wealthy in the West. Here in Thailand that isn’t as true. Labor is quite cheap and even in Bangkok you shouldn’t expect to pay more than 15,000THB ($500) for a housekeeper, driver, nanny, gardener or cook. So, with your penthouse apartment you might have a housekeeper, cook and driver for a grand total of 45,000THB ($1500) per month.

Speaking of the driver, you’ll naturally want a car and since you are living like a king nothing will do but to get a Benz (the most common display of auto status here). Cars, like wine, are extremely expensive in Thailand and a Benz is going to set you back 2.2 million baht for a basic C class ($73,500) or up to 7x more for a CL500. So, expect to pay anywhere from 45,000THB ($1500) and up for your vehicle.

You will also have all the basic expenses such as electric, cable TV and internet. Most of this is reasonable and budgeting an additional 20,000THB ($665) per month should cover it.

Finally, you should also consider travel expenses. Thailand has some of the best beaches and oceans in all the world. In addition, Bangkok is quite central to the rest of Asia so trips to Singapore, Tokyo, Seoul, Hong Kong, Beijing, Bali and Macau will probably appeal to you. I know these aren’t technically Bangkok expenses, but living here puts the rest of Asia in your backyard and its inevitable you will want to do some exploring.

As I’m sure you know, it is easy to spend $500 a night and up in any of those cities and your dining options will also be quite pricey. Add in shopping and gambling in some of those locations and you will quickly find that you can spend as much as you like traveling throughout Asia. $5000 a month…simple. $15,000 a month…easy. $40,000 a month…possible in Tokyo, Singapore, Hong Kong and Macau for sure. Probably doable in Seoul and Beijing as well.

It’s Good to be the King

If you have the kind of bankroll that let’s you live without a care in the world for money you can live like a king in Bangkok. $5000 or even $20,000 a month won’t cut it though. To live a life of true luxury including accommodations, dining, nightlife and travel (I haven’t even touched on shopping) you could easily spend $50,000 a month. Anyone who doesn’t believe me can feel free to transfer $50,000 to my bank account and I’ll spend it for you in a month and do a complete case study!

Disclaimer: I am a 45 year old white male who grew up in the suburbs and have no business writing a rap song. If you choose to read on please keep that in mind and be glad I didn’t choose to actually record my Roth rap. Thanks to Jay-Z for the creation of the original “99 Problems” and mad props to my boy Jeff for creating the Roth IRA Account Movement. Stop by that link and you will find over 100 articles dedicated to teaching you all the ins and outs of retirement investing via a Roth IRA.

If you know anything about rap music you’ve heard the stylings of Jay-Z and his famous 2004 single “99 Problems”. I’m sure it’s been used often as a springboard for other subjects, most famously by Jay-Z himself at the Staff Ball, the last official event of Barack Obama’s inauguration. During the set he tweaked the lyrics and sang “I Got 99 problems but a Bush ain’t one”. To my knowledge no one has ever used the song to promote investing in a Roth IRA (or ANY type of investing) so I thought I would give it a shot. If you’re not familiar with the song look it up on YouTube, but be forewarned that the lyrics are NSFW.

If you’re havin’ cash problems I feel bad for you son
I got 99 problems but a Roth ain’t one

[Chorus]
99 problems but the Roth ain’t one
If you’re havin’ cash problems I feel bad for you son
I got 99 problems but a Roth ain’t one
Hit me

[Verse Two]
The year’s ’04 and my degree is fresh
Looking back at college years my finances got messed
I got two choices y’all keep spending or
Pay off debt and get my retirement set to the core
Now I don’t want to see no cat food retirement for me
And I got some good cash flow I can save that dough
So I set up my budget, my 401(k) and my Roth
And I heard “Why you can’t come out anymore?”
Cause I’m young and I’m wise and I’m saving my dough?
I’m not in college no more, saving’s how I roll
Should I join you and then all my money be blown?
“Well we still party and spend don’t you know”
“And we miss your face when we’re out at the bar”
“Are you sure you can’t spend, you don’t need no Roth, just come as you are ”
I ain’t stoppin’ my savings, retirements legit
“Well do you mind if we call you a cheap sorry git?”
Well my savings are on auto so are the Roth and the k
Call me what you want I’ll be laughing to my grave
“Aren’t you smart as a tack, you a broker or something?”
“Or some financial guru or somethin’?”
Nah I ain’t got no CPA or CFP but I know a little bit
Enough to know my Roth is the shit
“We’ll see how smart you are when the stock markets done”
I got 99 problems but a Roth ain’t one
Hit me

[Chorus]
99 Problems but a Roth ain’t one
If you’re havin’ cash problems I feel bad for you son
I got 99 problems but a Roth ain’t one
Hit me

99 Problems but a Roth ain’t one
If you’re havin’ cash problems I feel bad for you son
I got 99 problems but a Roth ain’t one
Hit me

[Verse Three]
Now once upon a time no too long ago
I had mountains of debt, no retirement roll
Not a roll in the sense of something to eat
But a roll of cash to help keep me off the street
I tried to ignore it, but eventually I know
That saving for retirement was the way to go
Tax free withdrawls when I turn 59
No more worries about payin’ the IRS a dime
My Roth gonna give me a great peace of mind
Knowing that I won’t need to worry about mine
And there I will be without a care in the world
While you all are workin’ ’til the end of your world
Companies with they rules ruling your world
IRS come to give you the shaft again
50% of your wages in taxes again
All because you couldn’t see how a Roth would keep it from them
Tax free growth and withdrawals, a Roth gives you them
And a retirement sweet and rich as chocolate
I got 99 problems but not havin’ a Roth ain’t one
Hit me

99 Problems but a Roth ain’t one
If you’re havin’ cash problems I feel bad for you son
I got 99 problems but a Roth ain’t one
Hit me

You’re crazy for this one Jeff Rose
It’s you boy

Have you found yourself in debt up to your eyeballs (or maybe just to your waist)? Are you constantly wondering why you can’t get off the debt treadmill and live a more satisfying life without constant worries about money? Don’t feel guilty about it, many of us (myself included) have been there and I can tell you there is a way out. There are no magic solutions and you don’t necessarily need professional help either. Are you ready to learn why you can’t get out of debt?

You spend more than you earn

Yeah, you spend more than you earn, it really is that simple. To compound the problem you likely don’t save nearly enough (maybe not anything). So if you are ready to take back control of your financial life the solution is simple. Spend less than you earn and use the balance to start saving or in your case to pay down your debts as quickly as possible.

I know this may sound new and scary, but it really isn’t that hard. You just need to get started and once you do you will find that each month becomes easier for you until saving becomes almost second nature. You see, spending too much is simply a habit that needs to be broken and once you do you can replace it with a new habit…paying off your debts and saving for the future.

The good news it it is relatively quick to get a new habit ingrained, most sources claim 3-6 weeks. That means by next month you will have created a savings habit. The bad news is that once a habit is formed the pathways that support that habit never really go away.

They do however become less likely to be used as you get away from your bad habit. So while you might always be tempted to spend it becomes easier to resist as time goes on.

So how do you get started? Here are 10 ways that you can start to get out of debt beginning today!

1. Start tracking your expenses. I mean every single penny you spend for at least 1 month. Most of us spend without thinking and by tracking your spending you can consciously begin to avoid places and events that cause you to spend. You will also begin to question your spending, which is a very good thing when you are trying to reduce spending.
2. Sit down and create a budget. I know it isn’t fun, but it certainly won’t kill you either. And creating a simple income vs expenses budget needn’t take long either. What you want to do is get a quick picture of how much you make versus how much you spend. There’s no need to break things down to a granular level at this point. Just list your income sources and the amounts and then do the same for high level expenses. By high level I mean mortgage/rent, car payments, gas for the car, insurance, groceries, utilities (electric, cable, internet, cell phones), entertainment, clothing, memberships/subscriptions, credit card payments and cash. You can probably do this pretty easily by going through your checkbook or online bank statements.
3. Stop carrying cash and credit cards. Cash makes it way too easy to make those small impulse buys that can add up to hundreds of dollars a month. Credit cards make it too easy to make larger purchases on impulse.
4. Stop going out to eat. I know it is fun, easy and provides a sense of fulfillment for some, but eating out is way too expensive if you are trying to get out of debt. If you are a couple eating out once a week I’ll bet you spend several hundred dollars a month. And that doesn’t even begin to touch on all those $5-10 lunches. Stop eating out until you get your finances and your debts under control. See, it doesn’t have to be forever.
5. To quote Youngbloodz “I got my mind on my money, my money on my mind”. You probably already do if you are in debt, but in a very negative and unempowering way. My recommendation is that you start to do this in a more empowering “I’m in control” way. Review your budget, if not daily at first at least a couple times a week. Question your expenses, “Is this something you really need”. Look for ways to avoid spending money and ways to improve your finances at every turn. You don’t have to become a monk or a hermit, but you do need to become very mindful about your income and your expenses.
6. Start to brainstorm ways you can make extra money. Maybe it is something as simple as accepting overtime at your job or taking a second part time job. Maybe you’ve had ideas for starting a business in the past but have never taken action or even determined what exactly would be involved. Now is the time to get more involved in your earning power and find ways to increase your incoming cash flow. There are plenty of ways to make more money both online and offline, but it depends on you to find out which ones suit you and to get started.
7. Get that budget out that you created in suggestion #2 (you did create the budget right?) and start to go through each line item asking yourself if you really need that particular item or service. If you think you can do without it then do that. Right now. Call and cancel, fill out the online forms or whatever it takes to cancel anything you really don’t need because those things are sucking the money out of you. Now take a look at the things you do need and ask yourself if you could somehow lower those bills. I’m going to give you a hint…for the majority of you the correct answer is yes. Yes you can lower your grocery bill and electric bill. Yes you lower those cash expenditures. Yes you can lower the amount you spend on eating out. Decide how much you can lower each bill and get to work doing that.
8. Give yourself an allowance. I know it doesn’t sound like a way to get out of debt, but trust me it works. Well it works as long as you have the willpower not to head to the ATM once you run out of money for the month. I actually make a game out of it and try NOT to spend my entire allowance. By giving yourself an allowance you are setting boundaries for your spending, but you are also giving yourself some breathing room for fun or unecessary purchases. Hey, we all need to have fun sometimes.
9. List all your debts. Include the total amount, the monthly payment and the interest rate. Now order the list with the first debts to be paid off at the top. You can choose to pay off the highest interest rate loans first or you can choose to pay off the smallest loans first, both methods work equally well. As you pay off each loan you want to roll the payment you were making on that loan down to the next loan. So if your monthly minimum on the first loan to be paid off is $20 and the monthly minimum on the second loan to be paid off is $25 you are going to add that $20 to the second loan minimum once the first loan is paid in full. Keep doing this all the way down the list as you pay off each loan.
10. Bonus Tip: This one is extreme, but if you can do it you can save a boatload of cash every month. Sell your car, cancel your insurance and either walk, bike or take public transport everywhere. I did this when I was my deepest in debt and it saved me somewhere in the neighborhood of $400 per month. Actually it probably saved me more than that because once I had to walk everywhere I was much less likely to go to the mall, restaurants or bars.

None of the above things are difficult (except maybe getting rid of your car), you just need to take the time to make them a part of your financial routine. After a few months pass all of these things will seem normal and you will be seeing your debts shrinking at a growing pace. The feeling of paying off each loan and watching your balance decrease is truly amazing and will start to give you a sense of increased control and freedom.

There are several good online banking sites that make it easy for you to save towards a goal. Emergency funds, vacation savings, Christmas funds…all of these can be accomplished using an online savings account and the power of automatic transfers. Most of these accounts feature decent (for these times) interest rates as well as the ease of linking with other accounts to make saving a breeze.

Aside from being just plain fun online, ImpulseSave also makes it fun and rewarding just to save. It let’s you set up goals (vacation, debt payoffs, wedding, etc) and assign an amount to the goal. And then it will even tell you how long it will take you to save for that goal given a certain weekly contribution. Think it’s going to take too long to reach your goal? Simply save more each week!

Just 6 months to iPad heaven for the wife!

Like I said, you can schedule weekly amounts to be taken from your checking account and moved to your ImpulseSave account (kinda boring), but you can also save on impulse. And this is where ImpulseSave is different, fun and more engaging than other online savings accounts! It’s also where you can really ramp up your savings toward your goals.

Say you are out at the mall and you successful avoid the temptation to buy a new piece of clothing, a latte or some new decorations. Chances are by the time you get home you will have forgotten all about your wonderful willpower and will have lost a golden opportunity to save. With ImpulseSave you can actually send a text message to their number (an iPhone app is also in the works) and tell them “Save $20 because I didn’t buy X at the mall”. ImpulseSave will transfer $20 to your savings goal based on that simple text message. How cool and simple is that? I think it takes snowflaking to a whole new level.

Just imagine how fast your savings will add up with the combination of automatic weekly savings and Impulse saves. I’m willing to bet that most of you could easily save $100 a month or more, just by avoiding temptations and saving the money you would have spent on those impulse buys.

Your savings are held by a traditional bank so you do get interest on the savings, currently the interest rate is .40% APY. Not great I know, but keep in mind this is kind of like a digital piggy bank. You could always transfer the money to a higher yield account after reaching a certain balance, or even use it to add to your investments.

The only downside I can currently see is that ImpulseSave is only open to US citizens and residents. Sorry, but there are plans to expand internationally so all is not lost.

You really do need to give this a try. Once you do I think you will be hooked just as I and many of the other ImpulseSave users are. I didn’t mention it earlier, but ImpulseSave is currently in BETA and accounts are being given out by invitation only. So c’mon and Save with me! Everyone who requests an invite in the next 24 hours will be automatically approved!