Reverse Budgeting: Money that Must be Spent

I realize that being reluctant to spend money isn’t the normal problem people have. This is especially true where I grew up: the USA. But I do have trouble spending money, my default desire it to save money.

The main reason I have the ability to have a digital nomad, long travel lifestyle now is not some incredible business bringing in lots of cash. It isn’t have made a huge fortune that I can now live on. It is mainly because I don’t need to spend a huge amount now. And I have saved up money by not spending a huge amount before. Investing that money well also helped.

But I do also have trouble due to my desire to not spend money even when I might like the result (when the cost just seems too high for what is offered). I have taken to a “reverse budget” where I have set money that I expect to spend. And I add to that balance each month and if it grows I have an increasing pile of money I am suppose to spend.

So when I think about getting a guide for a trip in China and I am put off by how much it costs, I can look at my balance and say if I have to spend that money there really isn’t anything I want to spend it on more than hiring a guide. So then I can spend money in the way that benefits me and I can escape the trap of saving more than really makes the most sense when you look at the overall picture.

sunset from boat

Sunset from boat tour in Kuching, Borneo, Malaysia. I may well not have taken this evening boat tour if I didn’t have money I “had” to spend.

Some people will put some amount into a checking account each month to limit their spending to say $2,000. I do something similar but for the opposite purpose to segregate money to spend. I move the decision from whether I am better off saving or spending that money to this is the money that has already been allocated for spending, so now go spend it on whatever is the best use for it.

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Helping Others

Nearly everyone reading this blog is very lucky financially. Even if they see many near them that are even luckier they are still financially fortunate.

I believe those of us who are lucky have an obligation to share with those that are not as fortunate. Many people are happy to help out more than they are already, but they need encouragement.

Two of the big challenges are to appeal to them in a captivating way (person connection are good – photos and videos help a great deal) and trustworthy opportunities. Sadly a significant issue is people seeing how willing people are to part with their money to help others and they figure they can get that money by just saying it will help others and then doing nothing, or very little for others (and keeping the cash for themselves).

So trustworthy appeals that engage happy to help both benefit those receiving funds and those giving funds.

I have long used TrickleUp, Kiva and Global Giving to help (and they each do a good job of engaging donors (tugging on their heartstrings and making them happy to give).

I try to give back to the places I visit. So I integrate this into my digital nomad life. As with many digital nomads I have an affinity for entrepreneurs and my charity often focuses on helping them (Global Giving does other things too – such as providing clean water, electricity, education and training…).

Trickle Up provides grants to entrepreneurs and provides significant training, support and a network of like minded people. Kiva is more well known and provides loans to entrepreneurs.

Related: Giving More Than Money to CharityFunding Entrepreneurs in Nicaragua, Ghana, Viet Nam, Togo and TanzaniaFinancial Thanksgiving

Finding an International Business Bank as a Digital Nomad

Dealing with banking issues is one of the most difficult aspects of a small digital nomad business. Finding a bank for a small business isn’t easy. Add to that dealing with international banking and things get very challenging.

Finding a bank that will accept deposits via wire, provide a credit card for your business, has good online tools and you trust isn’t easy. I ran across a very useful post recently:

The Best Offshore Banks of 2014 which includes a good deal of information on the 30 best banks according to them, for example:

Butterfield Bank

Established: 1858.
Jurisdictions: Bermuda, Bahamas, Cayman Islands, Guernsey, UK.
Minimum deposit/balance: 5,000 BMD/USD/GBP for business banking, 250 – 500,000 BMD/USD/GBP for private banking.
Personal banking: Residents preferred.
Commercial banking: Yes, international.
Private banking: Quite strong.
Remote account opening: In most cases.
Mobile app: iOS, Android.
Cards: Full coverage, available in USD and GBP.
Website: http://www.butterfieldgroup.com/

All things considered, the finest bank in the Caribbean and Bermuda. 2009 to 2010 were rough years for the bank, but they bounced back to profits by the following year. Although the share price took a massive dip, but the Butterfield signature quality was never compromised.

Card services are some of the best in the region, with two airline partnerships being available (AAirways and British Airways).

Internet banking is strong but the mobile banking app, although light-years ahead of other banks in Bermuda and the Caribbean, leaves a lot to be desired.

It provides enough information for you to screen through and find some good options for you. And then you can do more research and pick one to try out. I would definitely do more research, you shouldn’t trust 1 internet post to find a bank.

Singapore Merlion with the financial district in the backgound

Singapore Merlion with the financial district in the backgound

Finding a bank that accepts EFT deposits from the USA makes a big difference but this can be a challenge. Many internet companies still are stuck a decade or two ago as far as banking is concerned. Many only pay via EFT or check. Some will also pay via paypal. The options are limited for people in many countries (with poor mail system and paypal is also not available to people in many countries).

Of all my efforts in creating a digital nomad existence banking has been by far the biggest negative surprise. It has just been a huge hassle. I may well look to using one of these banks if I can find a better option for me.

Some that look interesting to me for digital nomad businesses are: Butterfield Bank (Bermuda, Bahamas, Cayman Islands, Guernsey, UK), Crèdit Andorrà (Andorra, Panama), DBS Bank (Singapore, Hong Kong, Malaysia/Labuan, Taiwan), FirstCaribbean International Bank (Anguilla, Antigua and Barbuda, Bahamas, Barbados, British Virgin Islands, Cayman Islands, Turks and Caicos Islands), Standard Bank (Isle of Man, Jersey, Mauritius, South Africa, Ghana, Angola, Singapore, South Africa, UAE)

It has been awhile since I created this blog and haven’t posted to it, but my plan is to be more active posting here in the future.

Related: International Migrants: Economics and BankingPrivate Foreign Banking Deposits by CountryThe Importance of Long Term Disability InsuranceGoing Nomad in SE Asia