Financial Lessons Learned from My Recent Trip Abroad - December 2024 Prudent Money Coach Tax & Money Tips

Photo by Walter Chávez on Unsplash

Greetings! Can you believe that we are now in the last month of 2024? Did you accomplish any goals you set for yourself?
​
Recently I had an opportunity to visit my parents back home. It was a privilege to still have both my parents with me and to have an opportunity to sleep in my childhood home, in a bedroom I used to share with my siblings. Now that I’m a professional dealing with money and taxes, I look at things through different lenses. Here is some interesting money-related information that I learned/ encountered from my two-week trip.

• While it is possible to claim “donation tax credit” back home, many people are not doing it due to the complexity involving tax reporting. If you live in Canada, be thankful that claiming donation tax credit is quite straightforward and easy.

• When you rent, generally you pay first month’s rent and a deposit equivalent to a month’s rent, which may be applied towards your last month’s rent. Did you know that if you rent a whole house in Indonesia you would need to prepay your 12-month rent? Wow! I wish I could interview renters and ask how they come up with that much cash. And did you know that some landlords even use multi-year leases? You get to lock in your rental cost, let’s say for 4 years, but how will you come up with all the cash that is equivalent to 48 month’s rent? I believe this requires creative financing, perhaps involving financial help from extended families.

• In developing countries where money is tight, it is very common for extended family members to help each other out. However, whenever money is involved, it is usually a bad idea when agreements are not in writing. One person’s memory may be different from others. It may become a he said/she said situation. A record that shows detailed information such as date of transaction, agreement between parties, amount involved, etc. may help avoid conflicts. Bonus if it is a legal paper so it can be enforced. 

• When you lend someone money, it may be best to treat it like a gift with no expectation of payback. If you do get it back, that’s great; if not, you won’t be disappointed.

• When you give someone money, it is not yours anymore. The recipient is free to give the money to anyone, including someone you would’ve disapproved of. So, give wisely. I have seen so many examples of this. Here is one example: an adult gives money to her adult brother, to help with day-to-day expenses. But the brother spent it on gambling. In this example, it may be best to give the money directly to her niece’s school to pay for tuition, or to purchase groceries directly and deliver it to the brother.

• Do not mix business and personal, especially when it is a family business. There should be an agreement on how much each person is entitled to have periodically; for example, $5,000/month/person. It is best to have more than 1 person to approve business expenses, for example, 2 signatory authorities; this way, no individual can freely spend business money. 

There are so many more money lessons I learned, which apparently are quite universal. If I may summarize: When money is involved, it is usually best when there is a record-keeping and accountability partner(s).

Wishing you and your family a very Merry Christmas and a Happy New Year! May you encounter peace and joy from Christ.