Tuesday, November 5, 2013

How do you spend your money?

Over spending is one of the worst bad habits that you can land yourself into. Most of them will find themselves swimming in pools of debts which is very hard to get out off. It is important to review our spending habits and lifestyle before we fall into such a trap. This is a trap you will not want to fall into.

It has been reported by the new paper (TNP) that some HDB owners spend nearly $100K on their home renovation. This has generated much discussion on a fellow blogger ASSI AK's blog. He blog about how he spent only $8000 on his home renovation.

Is it worth it to spend so much on your home renovation? Besides this, how about our other spending habits? I will list out the daily expenses that we will encounter and their estimated respective costs below. Read and see which one do you belong to:

For daily commuting(one way cost only), do you choose:
Bus/MRT : $1.80
Taxi: $16
Own Car: ??? (I do not know the actual cost as i do not own a car. With fuel cost and parking/ERP cost, i think it will add up to quite a lot)

For coffee or tea breaks, do you choose:
Staff cafeteria: $2
Starbucks: $8

For daily lunches, do you choose:
Hawker Centre: $4.50
Food Court: $7
Restaurant(Eg: Swensens, Din Tai Feng): $20

For clothes, do you buy:
No brand shirt: $5
G2000: $15-$30
Levi's: $70-$100+

For Travelling, do you fly by:
Business class by SIA: $5657.30
Economy class by SIA: $1200.50
Economy class by Scoot: $706.21
*Travelling date is 2 Dec 2013. Info taken from respective airlines website

These are the most common expenses that we will have. Let's compare between the cheapest option and the most expensive option. How much money would you be able to save if you chose the cheaper alternative?

Savings for daily transport: 
$28.20(two way) per day
$564 per month (20 working days)

Savings for coffee/tea break:
$6 per day
$120 per month (20 working days)

Savings for lunches:
$15.50 per day
$310 per month (20 working days)

Savings for clothes:
About $30-$80 per item

Savings for travelling:
$494.29 (comparing SIA and Scoot economy class)

You'll realise that the savings for your daily expenses such as transport and food will add up to a lot for one month. Let's say if you take taxi everyday instead of bus/mrt, you have starbucks everyday and you eat at restaurants for lunch everyday, you would have spend an additional $994. This money, if saved,  will add up to more than $10000 in a year. Just by choosing the cheaper option everyday will save you this amount. Who says saving money is hard?

Some of you may say: "This is my hard earned money, i want to enjoy my life and don't want to be some stingy person. Furthermore, life is so short, why can't i just enjoy now?" I would say this is your own choice. If you enjoy now, you will definitely suffer latter in life. Many people realised it too late. By the time they want to take action, it is already very difficult to change.

Now, for the last part, i'm not telling you to live a peasant life. It is ok to enjoy dining out at restaurants once in awhile, take taxi once in awhile and travel luxuriously once in awhile. The key is to manage your own money. You can spend but only spend within your means. If you still can save money in spite of spending on all these, then by all means go ahead. There is reward for delayed gratification. This is a word i learnt a few years ago. Truth be told, the habit of saving money was implanted in me since young. I thank my parents for teaching me the importance of it. I do not always get when i want when i was a kid. This is something i did not understand when i was younger but now i know how important it is.

The rich live a frugal life. Many of them spend way below their means.

Below are examples of 3 rich people who lived frugally:

1) Warren Buffet still lives in his humble home which he bought 50 years ago for $31,500 and he drives a second hand car.

2) Ingvar Kamprad, founder of IKEA, has a net worth of $3 Billion. He drives a 15 year old Volvo and always flew economy class

3) Mark Zuckerberg, founder of Facebook, famously wears the same gray t-shirt and hoodie to work every day. His wedding was held in his backyard and the couple was seen digging at MacDonald's on their Italian honeymoon.

Let me end with this quote: "Spending, if uncontrolled, will always rise to your level of income."

Avoid the trap of overspending. Make sure you adopt the right financial habits today!

Like my Facebook page to receive market updates and notifications of new articles. SG Young Investment seeks to educate readers on finance and investment. Join many other readers on this journey towards financial freedom.

Related Posts:


  1. Hi,

    You say it as it is, i enjoy your article. :)

    if i might add in further:
    1. Sometimes i make my lunch, like wholemeal sandwhiches and oatmeal, it costs lesser and not to mention more healthier
    2. I dont buy drinks outside, normally i make coffee in my office pantry or make tea from the tea bags i brought in supermarket. Definitely cheaper even when compare hawker centre.

    Lastly, i am using an Apps called Toshl Finance. It helps me to keep track of my daily expense and i will do a review every week to make sure my expense is under control. You can share with your reader if you find it useful.

    1. Hi Solace,

      Thanks for your sharing. I have never made my own lunches before. You're really good in saving money. Good habit you have built up.

      If you want, I'll welcome you to do a guest post for my blog. Just email me and let me know. :)
      It'll be good to have your sharing to my readers.

    2. Hi Solace,

      I use the Toshl Finance app too! Must say I've tried quite a few personal finance apps and still find this one the best suited for my needs.

  2. Hi SGYI,

    You are right that for most stuff, there's always 3 options available:

    1. Frugal
    2. Comfortable
    3. Luxurious

    By choosing 1 or even appreciating 1 better, we will be able to reduce our expenditure. And some stuff, like coffee/tea breaks, one can even reach level 0 by doing without it.

    Yes, we only live once and life is short. That's why I prefer to spend less and save more so that I can do whatever I like (within reason) as early as possible. =p

    1. Hi 15HWW,

      I'm glad you have the same thinking as me. Its either we sacrifice now and enjoy later or enjoy now and suffer later. We can only choose one.

  3. Hi SG YI

    It's good that we understand the importance of savings early in our lives. This small small thing will go a long way into a successful life you will become :D

    But I have a bad habit of eating restaurants often ><

    1. Hi B,

      Yes, its important to save. Eating at restaurants? I hope its not everyday :p

  4. People do spend their money but we should learn how to distinguish which ones are worth the investment.