I want to learn how to play the piano, I want to learn more about different modes of wealth accumulation, I want to learn how to skateboard.

We often want to learn a lot of things, but they are often never accomplished because we either forget about our desires or they fall under the weight of our daily to-do lists.

Investing and saving for retirement is one of these “I want to learn how to do that” topics.

The big difference between learning about investing and learning piano is that 10 lost years of investing can cost you over $100,000 in your lifetime, while 10 lost years of piano playing will probably cost you a little less. You could become a world famous pianist – yes – but even pianists have to keep track of their wealth and plan for the future.

One of my goals last year was to set up a taxable investing account for short-term savings. It took me almost 4 months of procrastination to come to a conclusion – I have too much uncertainity over the next 5 years of my life to be investing in a taxable account.

At least once a day for those 4 months I thought about learning more about taxable investing. I thought about researching funds, brokerages, and figuring out how much I could invest.

A lot of the time I would think about these things, they would make my head hurt, and I would do the easier thing – go to Facebook, check my Google Reader, or check out ESPN for a new Bill Simmons article. All of these things required a lot less thought.

In reality, I was hurting myself and my bottom line by wasting this time. I was potentially losing money every time I closed my Google Finance tab and went over to Twitter.

Since losing days, weeks, months, and years of investing time can cost you a lot of money in missed opportunity, it’s important to force yourself through your procrastination about investing decisions.

So how do we get past the, “ugh, I don’t want to do this today” stage of investing, and actually learn about it?

Here’s 5 tips that’ll help you break through your procrastination:

1) Set your homepage to a money site

Whichever site you’ve used to do research for your investing, set this site as your homepage. You’ll see it every time you open your browser and it’ll keep your mind thinking about doing the research. You’ll probably see this page at least 4-5 times a day and it’ll subtly shift your thoughts to thinking about investing.

2) Go to the library and keep 3 money books spread out across your house

Need a suggestion? I talked about the 5 money books that changed my life last week.

Pick up a couple of these books at your local library and keep them in your bathroom, living room, and room. The books will become a part of your daily life and you won’t be able to ignore them. You’re bound to pick one up eventually and start looking through it. Hey, if you can only learn about money management on the toilet, then so be it.

3) Set a Google Calendar alert

GCal is awesome because when you create an event you can have them send you a reminder email that morning.

Create an invent called “Stop Procrastanting and Learn to Invest”. Set it for every other day or every 3rd day. On that morning, you’ll receive an email from Gcal saying “Stop Procrastanting and Learn to Invest”.

It may not immediately change your behavior, but it’ll change your mind set in the mornings from thinking about Perez Hilton or the video of the wizard getting tasered to thinking about learning to invest.

4) Ask a friend to keep you honest.

If you have a close friend who you’re honest with about your money procrastination problems, tell him or her to ask you about your progress once a week. It’s a lot more difficult to say no to a friend compared to just deleting a reminder email. You’ll feel a little more guilty and this may be the best way for you to overcome your procrastination. Sometimes shame can be helpful.

5) Change your ringtone

If you’re serious about wanting to learn about investing, but procrastination and fear is running your life, have your ringtone help you out.

My phone allows me to use audio as ring tones. Currently I’m rocking the Mad Men theme song (can you name a cooler TV intro?) but you can record yourself saying something along the lines of: “go read your money” or “pick a fund already”. This reminder’s harder to avoid and it’ll hit you at random times throughout the day.

It may be a little weird when you’re on a date and your phone rings with the sound of your voice, but if you’re serious about beating this procrastination, then this trick will work.

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The first step to learning to invest is wanting to learn. If you’re considering any of these mind hacks, then you successfully completed step 1.

Step 2 is doing the grunt work. Reading about the subject and teaching yourself to a point where you feel comfortable putting your money somewhere for a long time. This step is not easy and unfortunately a lot of people can be stuck in this step for decades (ask some parents about their money regrets).

Maybe one of these mind hacks will be the one that makes you take the plunge into teaching yourself about money. Try one today and don’t let the procrastination rule your life for yet another day.

How did you start learning about investing? Have any tricks or suggestions to share with the readers? Leave a comment below!

Photo: PSD

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Corinne and I spent a refreshing weekend in Nagoya visiting our good friend Hiro who went to school with us in America for about a year.

Over 2.5 days we saw the city, stopped by the ocean (above), ate Subway, made burritos, played Rock Band, toured the infamous Japanese clothing stores, and saw one of our favorite bands – Motion City Soundtrack – in an intimate club with maybe 200 other people. Awesome.

I’m still decompressing from the weekend so I thought it was a fitting time to take a look at some of my favorite posts from the past 2 weeks.

I recently joined a new group of personal finance bloggers in a journey called the Yakezie Challenge. The network of upstart pf blogs helps one another in hopes of raising Alexa scores (blog rank), creating new blog relationships, and introducing one another to new topics/discussions/ways of thinking about money. The group is made up of over 50 blogs and it’s been a pleasure interacting and meeting a solid group of guys and gals so far.

Hopefully, you’ll take some time to check out some of the Yakezie blogs I’ll periodically mention on FF and find something you like.

Here’s 5 of my favorite recent posts from some Yakezie members:

Frugal Zeitgeist – Get Over the Fear of Cooking at Home…

I lose my patience with cooking, but Corinne loves it and considers it a hobby. Thanks to Google she can find almost any substitute recipe for the food we usually pay $20-50 for at a restaurant. We still like to go out, but learning to cook food you love will save you a lot of money over even a week. This post tells new cooks how to ease into the process. It can be a great thing for your body, mind, and wallet.

Well-Heeled Blog – 7 Steps for Overcoming Rejections in Job Search

I consider myself incredibly lucky that I haven’t experienced a job search rough patch. I remember trying to find a minimum wage job for 2 weeks my sophomore year of college and it was stressful. This post will help you clear your mind if you’re struggling to keep up the morale as you search for a new job. The best advice for today’s job market? Don’t take it personal.

Ultimate Money Blog – We Are Credit Card Debt Free!

Mrs. Money shares the great news that her and her husband have dug themselves out from under their credit card debt. I don’t dive into credit card debt too often on my site so check out her site for more info on her debt story and tips for overcoming your own debt.

PT Money – How to Fine the Best Roth IRA Rates

You have a little over a month (April 15th) to open up or fund a Roth IRA for 2009. How fitting: a post that tells you how to keep your Roth fees low. PT’s the man and he’ll help guide you through the process.

Little House in the Valley – When to Close an Account

The amount of active credit cards you use affects your credit score. LHinV takes a look at her diemma of closing an unused credit card and how it’ll possibly affect her score. Interesting stuff that the normal consumer takes for granted.

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Finally, a huge congrats to Baker over at Man vs. Debt for releasing his first premium product, Unautomate Your Finances. I haven’t had a chance to check it out yet, but based off Baker’s work ethic, I’m sure you’ll be more than pleased with the final product. Congrats, my friend!

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This is a guest post from Joel who is a Certified Financial Planner™, the owner of 4 different companies, a self professed Internet nerd, and currently working on many different web projects that range from a site for comparing health insurance to a site that helps people backup websites online.

Do you think that you have what it takes to be an entrepreneur? Do you sometimes get the urge to launch out on your own and be your own boss? In fact, do you not just “get the urge” every once in a while to become an entrepreneur but do you find yourself constantly wishing that you were out on your own as your current job just is not fulfilling?

As the owner of 4 different companies and a serial entrepreneur myself it seems that I am only satisfied when I am acting as my own boss and constantly creating any number of new projects that recently include a website for comparing car insurance companies to a website for reading credit card reviews to any other number of web related projects that strike up my interest (and even a BMI calculator website that I am somewhat ashamed to say told me that I am overweight – yes, my own website told me that I need to lose weight!).

Here are 10 statements that you can ask yourself as a true/false question as part of my 100% unscientific officially unofficial “Entrepreneur’s Test”. Let’s see how you do:

10 Statements: Are They True for You?

#1 I believe that I am firmly in control of my own future success or failure (TRUE/FALSE).

#2 I enjoy tackling projects where there is a high level of ambiguity as to the exact methods for successful accomplishment and I do well even if I do not receive clear direction from someone else (TRUE/FALSE).

#3 I have no qualms about breaking from the established pattern or traditional way of doing things (TRUE/FALSE).

#4 When I am interested in something I am 100% focused on whatever that “thing” is (TRUE/FALSE).

#5 I consider myself someone who can “get things done” even if it requires a high level of creative problem solving ability (TRUE/FALSE).

#6 I love to learn new things. I am constantly reading new books, asking questions, and trying to further my knowledge in certain areas that I am interested in (TRUE/FALSE).

#7 I tend to be aggressive about certain things (not physically). I am very competitive about certain things that hold my interest (TRUE/FALSE).

#8 I like to push myself and do new things even if it means that I have to step out of my comfort zone and even go through a somewhat scary/uncertain/pressure filled situation (TRUE/FALSE).

#9 I could be considered a risk taker and maybe even impulsive to a certain degree. I am willing to jump right in to an opportunity that I see without letting the fear of the unknown hold me back (TRUE/FALSE).

#10 I love to be considered and expert, a problem solver, the “go to” person, someone who can do what others can’t, someone who can meet a certain need, etc. (TRUE/FALSE).

How Most Entrepreneurs Would Answer

If you answered “TRUE” to the 10 statements above then you are almost certainly cut out to be a natural entrepreneur. Yes, everyone is different and people of all types of personalities can be successful entrepreneurs but for the most part those people who answer “TRUE” to most or all of the statements above fit well into the mold of entrepreneur.

What Do YOU Think?

How did you do on the quick, down and dirty “Entrepreneur Test” above?

Do you think that the above test is an accurate barometer of the characteristics of most entrepreneurs?

Do you think that entrepreneurs in different life stages or in different industries require different personality traits or differing degrees of personality traits to become successful?

Note from Austin: I’ve mentioned my interest in entrepreneurship a couple times on this blog, and in detail with my post about my textbook side hustle in college. I still find myself answering FALSE to a couple of the T/F questions, so don’t be discouraged if you didn’t get the answers you wanted. It may just be that you need to find your right niche that propels you to do something entrepreneurial in your life. Explore the world around you, and see what peaks your interest.

Photo: Photos8.com

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I’ve been talking a lot lately about the importance of educating yourself about money before you start investing and saving for retirement.

Money education shouldn’t follow investing so if you have any interest start today. The benefits of even a little money education will pay-off huge in the long run.

I started learning about money after stumbling upon some personal finance blogs via Lifehacker. I decided to try out some books those sites suggested and I became enamored with the topic.

It sounds ridiculous, but those books opened my eyes to a whole new side of money that I never knew existed.

Here are 5 short reviews of those personal finance books that I read when I first started. I would recommend these books to any one and will always hold them close to my heart for everything they did for my wallet.

I would love to do full reviews, but with a lack of libraries in Japan I’m out of luck.

In the meantime enjoy the 5 micro-reviews!

The Automatic Millionaire: A Powerful One-Step Plan to Live and Finish Rich

The one that started it all. I was a naive 21 year-old and attracted to the “Millionaire” in the title, but the book was surprisingly simple and flipped on a hundred light switches in my head.

Author David Bach introduced me to the paying yourself first – taking a certain percentage of your paycheck – maybe 20-35% – and automatically saving that every time. No excuses, if you do this consistently your money will grow over time and you’ll be thankful you never skipped a paycheck.

This book prompted me to start tracking my money and introduced the idea that people knew how much was going in and out of their accounts – I literally had no idea and never once tracked a penny before this book.

Verdict: A great starter to make you excited about money and the future.

The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns (Little Books. Big Profits)

The first book about investing I ever read. Written by Vanguard legend, John Bogle, this book is an ode to the index fund – Bogle’s invention.

This book stresses the simplicity of the index fund for the novice investor. It does a terrific job of backing up its claim by emphasizing how many fund managers don’t beat index funds averages – yet, they spend months of time studying graphs and numbers.

If you’re not sold on index funds after reading this book, you have a strong will. It also presents some staggering graphs about the low-cost of index funds related to actively-managed funds. The savings are enough to buy a nice car by the time you retire.

Verdict: Interested in investing, but don’t want to make it your life? This is your book.

I Will Teach You To Be Rich

If you’re a regular to my site you know I’m a huge fan of Ramit Sethi (check out part 1 and part 2 of my interview with Ramit).

This is single-handedly the best personal finance starter for anyone 16-35. The book is 266 pages, but it reads so fast that you’ll finish it in a weekend. His writing is infectious and it’s like reading a friend tell you to stop being an idiot with your money.

Credit cards, banking, investing, savings, retirement. It’s all covered in great depth with eye-popping example and diagrams.

Ramit’s also a marketing guru and has entire CHAPTERS posted on his site for free. Check them out for a taste – it’ll immediately make you want to read more.

Verdict: My favorite personal finance book ever. Hands down.

The Millionaire Next Door

This book took millionaires off an untouchable pedastal for me.It turns out that The Millionaire Next Door acts just like the average Joe who’s making $50,000 and supporting his family of 4.

The millionaire next door doesn’t drive a Bentley, wear a $15,000 suit, or have 7 houses. He or she spends on things they love (vacations or dinners) and saves on the things they don’t (cars or watches).

There’s a good amount of research done in this book about millionaires. The author attempted to pinpoint the specifics of millionaires spending and the results are really helpful for the average consumer who is just trying to get by.

Overall, the book provided me a lot of confidence and made me create the goal of becoming a millionaire in my life – a real goal, not just a pipe dream.

Verdict: May not immediately help your bottom line, but a great read for perspective and relating your money situation to others.

The Bogleheads’ Guide to Investing

This book supplements the Little Book of Common Investing. It highlights Bogle’s career and the invention of the index fund in more depth than the book above (336 pages vs. 216).

The book then gets into investing specifics based on the ideas of the Bogleheads (John Bogle’s followers). It reads like an entertaining textbook for novice investors.

The book is more in depth than other generic investing overviews, so I wouldn’t suggest starting with this book. After you’ve created a thin base of money knowledge, pick up this book, and it’ll take you to the next level.

Verdict: Not for money beginners, but an appropriate follow-up to a Money 101 book.

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There you have it. The 5 books that formed my money base and propelled me to change how I view and handle money for life. This site wouldn’t be around without these books and I would suggest them to anyone who is even moderately interested in money.

The links above are affiliate links, but I stand by these books as quality projects that will change your life.

Get to your library, order it on Amazon, or buy the Kindle electronic version but pick up one of these books today!

I promise you’ll never regret it.

Hey, readers! What were your first money books and which do you suggest to money beginners? Leave a comment below with your suggestions, thanks!

Photo: Stewart

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On Thursday we took a look at why Americans working abroad can’t invest in a Roth IRA and how to avoid double taxation on foreign income.

We learned you don’t have to pay taxes on your income while working abroad. Great! But how do you save for retirement without access to tax-deferred accounts like 401ks and IRAs?

Unfortunately, you’re hands are tied as a foreigner working abroad – at least compared to our friends in America with access to 401ks and IRAs.

You still have the option of investing your money in taxed accounts in America through a broker like Vanguard, Schwab, E*trade, or Zecco but you don’t receive any tax benefits and have to pay taxes on your gains and dividends.

These accounts don’t require you to be in America so you’re more than willing to set one up to start your retirement savings.

Retirement seems far away, but the sooner you start, the easier it is to properly save. Don’t let the absence of tax-efficient accounts scare you away from starting your retirement savings.

A taxable account can be a great start for your money and then when you eventually return home, you can take your progress and continue on with a IRA or 401k.

Here’s what you should know before you invest, and some options if you choose to take the plunge into investing for retirement.

Look Into Your Crystal Ball

It’s important you have a plan with your money before tying it up in stocks or index funds. A tanked market can really do a number on your short-term savings plans, so it’s better to be safe than sorry when it comes to money you’ll need in the next decade or so.

Here’s some questions to ask yourself before you start investing while abroad.

Do you need the money in 5 or less years? Look at your short and long-term plans. What are you planning on doing if or when you return home? Are you going to go back to school soon? Want to move out on your own, or are you ok with moving back in with your parents while you get your American feet back.? If you don’t have a clear answer for these question, then keep your money out of the stock market until you find some clarity in your immediate future

What’s your debt situation like? If you’re young and carrying credit card debt, that should be your first financial priority. If you try to invest and carry credit card debt you won’t get anywhere fast. Pay off your consumer debt with your foreign income and then you can move on to preparing for the future with retirement savings.

Student loans? Money in the stock market is fairly liquid – meaning you could have access to it by selling off stock, but it’s vital to have enough money to cover your bi-weekly or monthly student loan payments. Defaulting on your student loans is an ugly situation and one that should be avoided at all cost if there’s any concern of it happening.

Emergency Fund? Jobs abroad are just as volatile as jobs in America. A healthy emergency fund of at least 3 months living expenses will allow you to sleep peacefully in case your job happens to be terminated for whatever reason. Depending on your living situation in America, the size of the emergency fund can vary, but it’s wise to start one.

At first, try saving $100 a month and grow it from there. Like student loans, don’t ignore an emergency fund and move on to taxable investing. That’s like skipping middle school and hoping you’ll be okay in high school. You may survive, but every day could be a potential disaster waiting to happen.

How long will you be abroad? The length of your stay abroad will affect how you view retirement savings. If you’re only going to stay abroad for a year or less, don’t worry about taxable investing for retirement savings. You’ll be back soon and you can start savings using a 401k or Roth once you (hopefully) find a job.

If you’re looking to stay more than 2+ years then you need to consider your retirement savings options. It’s easy to do nothing and say you’ll worry about it later, but waiting too long to invest will kill your chance to excessively grow your money with compound interest.

If you’ve confidently answered all of these questions about your money and life and you have some excess cash and would like to get started, then taxable investing is your best choice for retirement savings while abroad.

Investing Options

If you’re new to investing, I along with anyone in the personal finance community, would suggest reading some books first. I have a couple of books listed on the Foreigner’s Finances Amazon store (affiliate) that I read when I first started thinking about investing. It’s vital you know what you’re getting yourself into before you go and make ignorant investing mistakes like I did.

Here are some options you have when you’re looking to invest.

Index Funds

Index funds are best for the passive or novice investor. My retirement savings are in an index fund and I feel comfortable knowing the fund is spread out across thousands of different stocks – negating risk.

These funds require a higher minimum investment (sometimes $3,000) but there are some options like the Vanguard STAR Fund which starts out at $1,000.

Individual Stocks

Buying individual stocks holds more risk than an index fund since a company could fail any day and your investment would be lost. On the flip, buying individual stocks can also provide a higher reward.

If you decide to go this route, choose what you know. Don’t pick a stock because you heard your dad talking about it or you saw it on a CNBC stock ticker once. You need to know the company inside and out before you invest not only your money, but your future in the company.

Lending Club

I’m new to Lending Club this year, but I’ve loved my time with the company.

At LC you can make loans to other people who are in need, and they pay you back over a certain amount of time . LC takes 1% of your return, but their average return is 9.65%!

So far Lending Club has helped fund over $91,000,000 in loans so they’re a trustworthy company that is doing a good thing for people.

Check out Debt Free Adventure’s extensive review for more info on investing with Lending Club.

If you’re interested in signing up for an account, use this link (Lending Club) and you and I will both receive $25.

Savings Accounts Are Always the Safest Bet

If you’re unsure about taxable investing, it’s wise to steer away.

If you’d like to start properly saving for your future while abroad, then periodically sending money to your home country to put in savings accounts or CDs is your best bet.

A lot of people will say, “the dollar’s weak, keep your money abroad!” In reality, they have no idea where the dollar will be tomorrow, next month, or 3 years from now.

Every 3-6 months send money home to hedge against the fluctuating exchange rates. You won’t gain 24% in a year like the yen got on the dollar over last year, but you won’t be on the losing end of it either (losing 24%).

ING Direct has my vote for best savings account.

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It can seem like a lot to handle, but there are a ton of resources available to help guide you through the process. Ask questions, read everything you can, and make a decision. Waiting 5-10 years could cost you hundreds of thousands of dollars in your life.

How do you manage retirement savings while working abroad? What suggestions do you have for those looking to get started?

Photo: Horia Varlan

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The following is a guest post by Kevin Fleming. Kevin runs CreditShout, a personal finance blog dedicated to educating people on how to manage their finances and reviewing the best credit cards.

College students who travel abroad often bring credit cards along with them in order to easily facilitate their overseas transactions. If you fit into this category, there are a few things you should consider when traveling internationally with a credit card.

Not only does the type of card you choose to use matter immensely, so does your record-keeping and your pre-planning.

Here’s a quick guide on going abroad with credit.

Some people think that traveling with a credit card is dangerous, and they opt instead to take cash or an ATM/debit card. In reality, a credit card is one of the safest ways to spend money as you pass your time abroad.

Credit cards have superior protection against theft and monetary losses when compared with other options. As long as you let your card issuer know that you will be spending time abroad (and get their international access number in case of an emergency), you will be able to rest easy using your credit card for any purchases you make.

Stateside, you probably use the card with which you are most comfortable. However, if that card is not an internationally recognized brand, you might have trouble using it in certain countries and cities.

Stick with a card that you know will be accepted wherever you travel. Check ahead of time because it’s impossible to know whether they’ll accept your card at every establishment you visit; stick with the big guns—Visa is among the best for international travel.

When you decide which card you will carry with you, call ahead and get a complete list of the additional fees you’ll have to pay on overseas purchases. Most credit card companies have a “currency conversion charge,” but many are also adding additional charges, such as transaction fees. The issuing bank will also have a fee, and the combination of these fees may end up adding to over 5 percent per purchase. This is another situation that will require you to do a bit of research and get as much information as possible before you get onto that plane to see the world.

Certain cards may be better for international travel since they don’t charge these fees. For example, Capital One promises a 0 percent transaction fee on some cards meant to use abroad. For American Express Cards, the fee is usually around 2.7 percent, which is just under the 3 percent fee usually charged by Bank of America, Chase, HSBC, Wells Fargo and Citibank.

Your credit card has a limit, and spending over that limit will result in you paying exorbitant fees. By the time you realize how much you’ve spent, it will likely be too late. Save all of your receipts as you travel to protect yourself against charges you didn’t make, and keep track of all of your credit spending in a ledger. Sign up for online billpay and statements—that way, every time you access a computer you will be able to compare what the card company says with what’s written in your ledger.

Do you want to take a card that will allow you rewards for your purchases? How much are you willing to spend while you’re overseas? Have you developed a contingency plan in case your card is lost or stolen, or in case of an emergency that costs you a lot of money?

Consider all of the odds, from beginning to end. Talk to others who travel frequently to other countries and ask them about how they planned to spend money during their trip. Create a budget before you go—daily, weekly, monthly, and incidental—and stick to it completely. Allow yourself enough leeway to splurge from time to time if you must, but don’t overdo it.

Planning ahead is the one single thing you can’t afford not to do.

Note from Austin: Do you have any experiences and suggestions for using certain credit cards when you traveled internationally? If so, please share your findings in the comments below to help out other readers/travelers!

Photo: LindyIreland

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The other day I received a question from a reader, Jack, on my 5 Minute Intro to Roth IRAs video post.

Jack asked:

A question for those of us abroad, or rather a request for clarification: I was of the belief that foreign-earned income which qualifies for the foreign-earned income exclusion cannot be used for a Roth IRA. You make no direct reference to this. Can you clarify at all?

Jack is correct. If you are working abroad and have no income in America, you cannot invest in a Roth IRA for the year(s) you are gone.

So why is this?

No U.S. Income? No Roth.

The Roth IRA is the governments way of helping you out with retirement savings by saying you don’t have to pay tax on your investment gains when you withdraw your money in retirement.

It’s kind of like a parent leaving a book about safe sex on their teenager’s bed. They won’t force you to do anything, but they’re subtly trying to nudge you in the right direction.

If you aren’t making income in America (a.k.a. not helping out the government by paying taxes on income) then they have no reason to allow you to take advantage of this tax haven for the period of time you are working abroad.

Therefore, you can’t save for retirement in a Roth or Traditional IRA when you’re working abroad.

How to Avoid Being Taxed Twice

Jack also mentions the “foreign earned income exclusion” in his comment. What is this?

Well, as a permanent citizen of America, you are required to pay tax on all income – even if you’re working abroad.

However, the foreign earned income exclusion states that as a worker abroad, you may be able to exclude up to $91,400 of your income from your taxes in America.

The specifics depend on the country you’re working in, but it’s very possible that you’re paycheck abroad should not be taxed in America.

In order to take part in the exclusion you must pass the physical-presence test. This sounds like a P.E. test from 7th grade, but in reality it states that you have to be in another country, or countries, for 330 days over a period of 12 months before you are eligible for the foreign earned income exclusion.

The time does not have to be consecutive, but until you do, you don’t qualify and your income can be taxed twice – once by America, and once by the country you work in now.

A Japan Example

According to my organization, the JET Program, all Assistant Language Teachers must “request the standard overseas filing package from the IRS”. This includes the the 1040 Individual Income Tax Return that most people are familiar with, along with the 2555-EZ, or the Foreigner Earned Income Exclusion form.

Also, according to my organization overseas filers have an automatic two month extension (until June 15th).

My situation is a little different since I have been in Japan for less than 330 days. I  must file an extension on my taxes for 2009 since I have only been out of the country for 7 months. Come July 2010, I will pass the physical presence test (330 days), and then be allowed to exclude my Japanese income from my American taxes.

So, you don’t have to pay taxes on your income while working abroad. Great!

But how do you save for retirement without access to tax-deferred accounts like 401ks and IRAs?

We’ll dive into this topic on Sunday.

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For more information on this topic check out the IRS’ information on the Foreign Earned Income Exclusion.

I’m new to these rules, so did I miss any vital information? Do you have experience with taxes while working abroad, please share your wisdom in the comments!

Photo: Micky

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Corinne and I have lived together since July and we share a majority of the bills including internet, water, gas, and car insurance. A problem a lot of couples run into when they’re trying to figure out their bills is who should pay for what?

It’s easiest to split the costs 50/50, but if each person has a different income amount this can cause some dreaded relationship tension. One person will have to pay a larger percentage of their paycheck, while the other person will then be able to pocket more cash every month.

After a little research, we realized that paying a percentage of the bills based on our income amounts worked best for our situation.

Here’s an example of the formula we use to split our bills so that no one’s feelings get hurt and every one’s paychecks are treated fairly.

Meet Ron & Alicia

For the example, we have Ron who makes $3,000 per month and Alicia who makes $2,500 per month.

Their monthly bills that they split cost $1,000.

To figure out who should pay for what, take each person’s income and divide it by the combined monthly income.

Here’s how Alicia and Ron’s percentages would look:

[Alicia's Monthly Income] / [Combined monthly income] = % of bills Alicia pays

$2,500   /    $5,500    =      45%

[Ron's Monthly Income]  / [Combined monthly income] = % of bills Ron pays

$3,000    /    $5,500    =      55%

Now, every month Alicia will pay $450 of the bills, and Ron will pay the remaining $550.

Do What Works For You & Your Partner

This formula works well for us because we both have a similar job – English teacher – that requires a similar amount of work and hours. The difference in our paychecks doesn’t reflect any increase in workload or skill, so we both feel comfortable using the percentage formula.

On the flip side, if I was only working 5 hours a week, I would feel like I wasn’t holding my own. I’d expect Corinne to speak up about having to pay a larger percentage of the bills, while also doing a lot more work.

This formula also works well for us because we’re dating, maintain separate bank accounts, and don’t share our money. If you’re married, engaged, or extremely committed then splitting bills 50/50 may work well for your relationship.

This formula may not work for your family situation, but if you consistently find yourself frustrated at a confusing bill situation, then the percentage formula may just work for you.

Have you tried this method in your relationship? How do you and your partner handle bills?

Photo: karpov the wrecked train

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Congratulations to the winners, Matt and Daniel from Sweating the Big Stuff!

Thanks to every one for taking part in the contest and I hope to have more giveaways for FF readers soon.

Here are some of my favorite personal finance posts from the last couple weeks:

Studenomics - Student Loans: Treat Them Right

This guest post from PT Money is a great comprehensive guide to student loans. If you’re in college and taking out loans, or out of school and paying them off, you’re bound to find some money-saving tips in this post.

The Digerati Life - Free Online Tax Filing, Tax Preparation Services & More

Tax season is near and I’m going to try to tackle them for the first time tonight. This post highlights a few services and sites that’ll help you file your taxes. Can you do it yourself and save $10? Yeah, but this is one of the times when paying for quality and time is in your best interest.

Sweating the Big Stuff – Personal Finance 101

Money advice for those graduating high school in college this year. The key is to master a few important money concepts, and live comfortably knowing you’ve set yourself up nicely.

Fiscal Fizzle – Should You Pay Off Your Mortgage or Credit Card?

Some people are forced to make this decision between two evils. Wojo takes a look at why more people are choosing to pay off their credit card debt and leave their mortgages for another time.

Personal Finance Ninja – Everything You Ever Wanted to Know About Your Credit Score

This is the most accurately titled post I’ve ever read. The ninjas teach you about what makes up your credit score, and how a bad score can cost you tons of money in your life. The diagrams even include ninjas and pigs so you know you’re in for a treat.

Austin & FF Around the Web

Here are some guest posts I did in the last couple weeks:

Free Money Finance- Make Yourself More Marketable in College

PT Money – The Benefits of a Joint Checking Account for Your Relationship

Ask Mr. Credit Card – What the Japanese Taught Me About Defeating Credit Card Debt

PT Money – Use Google Docs to Save Big and Make Life Easy

Blog Carnivals

Carnival of Personal Finance #242 – Fun Tax Facts at Cash Money Life

Festival of Frugality #217 – Snowpocalypse at Simply Forties

Carnival of Personal Finance #243 – Valentine’s Day Edition at Get Rich Slowly

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Full Disclosure: Foreigner’s Finances is an affiliate for Pocketsmith. We’ll receive a small payout if you click on a link and purchase a membership.

I recently had the chance to test drive Pocketsmith – the new budgeting and forecasting web application that allows you to insert bills and predict future cash flow.

The Pocketsmith team have done budgeting right. They’ve created a well-organized, attractive product that helps people not only organize their money, but peer into their future in order to appropriately plan for savings goals.

With Pocketsmith you can insert your salary and bills into a calendar for an organized view of your cash.

Once your money information is inserted, Pocketsmith creates a forecast of what your money will look like in 6 or 12 months. This is the function of Pocketsmith that sets them apart from other online budgeting applications.

Inserting your money information is pretty easy since you can also upload your electronic bank statements. To make things even easier on you, the Pocketsmith calendars sync up with Google Calendar, Outlook, or your iPhone.

Pocketsmith just released their application in Japanese so if you’re on this side of the globe right now, Pocketsmith is thinking of you, too.

On top of all this, they invest  5% of their revenue with entreprenaurs around the world through Kiva.

At its core, Pocketsmith is free to all users. They also offer a Premium and Super plan that offers increase usability.

Here’s a look at the pricing plans:

Contest

Because the Pocketsmith crew are so awesome and close with the personal finance community, they’ve given me a chance to give away 2 premium memberships to their site for 12 months - a $60 value.

In order to win this giveaway, leave a comment below with an answer to the following scenario:

What is the first thing you would do/buy if you woke up and found out you won the lottery and $5,000,000 was in your bank account?

Leave your answer below and 2 winners will be chosen on Sunday at 7am EST using random.org.

Once again, this is a $60 value and it’s open to any English or Japanese speakers.

Thanks again to the folks at Pocketsmith and make sure to leave your comment below for a chance to win 1 of the 2 premium memberships!

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