Paris for US$120 a month; Neuroeconomics and the love drug; Good debt bad debt; Burst savings; Managing market volatility

By Amanda Morrall

1) Gay Paris on the cheap

Paris on US$120 a month. I must be joking right? Nah. Take expensive hotels out of the equation, organise a house swap instead and you'll be saving heaps. Here's how a retired journo (a profession that in his own words"pays just enough to starve with dignity") financed a second honey moon with his wife of 45 years. Any ex-pats living abroad and reading this, you know where to find me. House comes with Jim Henson styled floppy moppy hound, plus cat.

2) Trust me - with this little pill

U.S. neuroeconomist Paul Zak believes he has a panacea for what ails us; internationally, domestically and even at the household level. One word: trust. Zak in this piece from the Guardian argues that the root of all contemporary problems boils down to social cohesion, or lack therefore. To remedy the problem, Zak is proposing the wider distribution of magic pills used to induce labour in women. Actually it also comes in a nasal spray. The active trust building ingredient? Oxytocin, a trust building hormone sometimes known as the love drug.

Seems a bit simplistic but Zak swears by it and at his lectures apparently transform uptight crowds into huggy kissy happy hipsters.

3) Good debt?

Earlier this week I met with a recent graduate who disclosed in our conversation that she was leaving university with a NZ$38,000 debt. My eyes must have been bulging because she quickly added that hers was the smallest amongst her friends. Some, doctors and other specialists were NZ$100,000 poorer for their education. I don't doubt that for some professions and high achievers out there, the education will more than make up for the debt down the road. Unfortunately, this won't be true of all graduates, particularly those who don't get an early handle on their finances.

Here's another article via thedebtmyth.com which shares my view that all debt is bad debt.

4) Burst savings

After a few indulgences, a holiday, a new T.V. (my old one was analog, came with rabbit ears and weighed 60 kgs), another LBD (Little Black Dress) (50% off), I've decided to crack the savings whip. Don't worry I'm already out of debt. Seeing as I'm always self flagellating in the savings department it won't be too punishing. I'm thinking about giving up wine (for at least a month) and will forego DVDs (I have 17 free channels now who-hoo), take-aways and I maybe even rent out my garage, after I sell the stuff gathering dust inside it.

According to this article from Yahoo finance, the most effective way to save $1 million, is through something called "burst savings.'' Essentially, this method just entails channelling all extra and discretionary income into savings, that's assuming you've paid off the debt.

5) Riding the storm

John Collett from the Age says investors may be forgiven for wanting to cash out and leave the share market behind until sovereign debt issues are ironed out. It looks like the worse is yet to come. But is it really smart to take an all or nothing approach when times get tough? Not usually. Collett says a more prudent move for investors is to hold the course, rebalance the portfolio if necessary and look at dollar cost averaging as a way to buffer the highs and low of all this volatility.

To read other Take Fives by Amanda Morrall click here. You can also follow Amanda on Twitter @amandamorrall