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!

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