Thursday, October 9, 2014

Practising Frugality to Achieve Happiness in a High Cost of Living Environment

To be rich, one has to spend less than he earns. He should probably save more than 50% of his income too. It is common sense that whoever spends more than he earns will never ever ever become rich. I live in a small city called Singapore. Over the years, Singapore has evolved from a third world nation into what we call a first world nation today. It has one of the best airports in the world along with towering skyscrapers, luxurious condominiums with private yachts and luxurious cars can be seen frequently on the roads of Singapore as well. In fact, i've seen BMWs and Mercedes as a common sighting everyday. Even luxurious cars like Ferrari and Porsche can be seen almost everyday.

The skyline of Singapore at night

Rising prices in Singapore

Of course with all these, prices have risen exorbitantly over the years as well. Property prices which were once $50,000 has risen to almost $400,000 today. A meal which cost less than $2 in the past can cost as much as $20 today. Not to mention even more luxurious Michelin starred restaurants which sprung up lifting food prices to more than a hundred dollars. Furthermore, shopping malls can be seen everywhere with branded goods at your neighbourhood malls. Then there's the killer of online shopping which makes buying of stuffs even easier at the click of a mouse since almost every household has access to an internet connection at home and with smart phones, all of us have internet access wherever we go.


The plain porridge and chicken story

With all the convenience and luxuries all around us, it is not surprising that most young people would think that this is the lifestyle that they should have. Eating at restaurants becomes a common hang out place for young working adults. Chilling with their friends at Starbucks becomes common for students. Owning a car and living in a condominium seems to be the average middle class lifestyle. It is vastly different from what our ancestors experienced in Singapore back then. They had to survive on eating bread and plain porridge for most of their meals. They had to scrimp and save just to live another day. They had to work long hours and in harsh environments just to earn that meagre salary. They were forced to be frugal but they were still poor in many ways. They could only save less than 10% of their salary.

Fast forward to now, there are still many people who are poor. Poor in a sense that they can only save 10% of their salary or even lesser. They still feel that they are just scraping by even with higher incomes. It seems like the hardship of saving money was passed on from generations to generations even though we earn a much higher salary now. The interesting thing is even though we own much more stuffs and earn a much higher salary, most Singaporeans are still not happy as compared to the generations of the past. Why is this so?

To know the answer, we have to return to the past and have a glimpse of what happiness is all about 40 years ago. In those days, both kids and adults had to eat plain porridge everyday. On special occasions, they would have an additional dish such as a chicken to spice up their meal. Of course if you eat plain porridge every day and suddenly you see a chicken, you would become happy. For those people in the past, seeing a chicken on their dining table would bring happiness to them. Fast forward to the year 2014, a chicken doesn't have the same happiness effect for us today as we see the same chicken everyday. The more you have of something, the less happiness effect it will have on you.


Practising frugality in Vietnam

Let me explain further by illustrating the effect of happiness on my own personal experience. 7 years ago, I was sent to Vietnam without even knowing what country it was back then. I was just a young 19 year old student on a mission to teach English at an International school there. There was supposed to be some form of remuneration or allowance to be paid but it didn't happen so me and my few other friends were left with nothing except for the little money we brought from home. It turned out that Vietnam was a great difference from the life I had in Singapore. The traffic condition was bad, the air pollution was bad. It's as if I went back to the 1960s in Singapore. How could someone who has lived in a city for the past 19 years survive in such an environment for the next few months?

Sunset at the Mekong river in Vietnam when I was there in 2007

As I settled down, life turned out to be good. We had basic meals of 2 dishes that cost less than $1 per meal. We even saved on soft drinks that cost 50cents there all because 2 soft drinks could easily buy us another meal. Occasionally, we would eat out at restaurants that cost $5 per meal. This brought us a lot of happiness even though life was simple. Interestingly, chicken was expensive there. A simple plate of chicken rice would cost more than $2 which is double of the simple meals we had. There was once we bought a packet of chicken rice for a small girl who appeared to be hungry and looking for food on the streets. She displayed the biggest smile I've ever seen and was beaming with happiness throughout her innocent face. I thought to myself: "This must have been true happiness." It is when we are grateful for whatever we have now that we experience true happiness.


Practising frugality in Singapore

Living a frugal lifestyle in a high cost of living environment would bring happiness to you and me. The equivalent of a plain porridge in today's term may be a meal at the hawker centre or a simple home cooked meal while the equivalent of a chicken would be a meal at the restaurant. If you eat at hawker centres everyday and go to restaurants once in awhile, the restaurant will still bring some amount of happiness to you. However, if you eat at restaurants everyday, the happiness effect wears out overtime. People who eat at restaurants everyday would need to find happiness from higher luxury meals which may cost up to a hundred dollars. It is a constant insatiable desire to always want more. It seems like the more expensive life we lead, the more ungrateful we become for the little things. This cause us unhappiness.

Practising frugality in a high cost of living environment such as Singapore is possible. There are alternatives to the high cost lifestyle which we can choose from. Instead of taking the taxi everyday, we can take the bus or MRT. Instead of eating out at restaurants everyday, we can eat out at simple cafes or hawker centres. If you need to drive, you can get a cheaper fuel efficient car instead of a luxury car that burns a hold in your pocket. When you make frugality as part of your lifestyle, you can then indulge in luxury once in awhile to fully enjoy the effects of happiness that it provides. You will be more grateful for it then. Pursuing luxury as part of your daily lifestyle is not as good as what most of us think.

So, if you're looking at that rich person who drives a fanciful car and set yourself a target to achieve that one day, STOP doing that. People who feel that they can only achieve happiness by living a luxury lifestyle in the future will find themselves disappointed when they do reach that stage. When you eat at restaurants and find that it does not bring you happiness any more, take a step back and live a simpler lifestyle. Think about the poor and less fortunate people who are struggling to put food on the table.

The truly rich live a frugal lifestyle and they find much more happiness in it. They also help and give in whatever ways they can. Step back from consumerism and your life will be more meaningful. It helps you to reach financial freedom earlier so you can truly give back to society for the rest of your life. Are you up for the challenge to live a more frugal and simple lifestyle for the better good of the world?

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Related Posts:
1. A generation of instant gratification - The cause of unhappiness
2. The chase after money lifestyle and materialism
3. What if money was no object?

19 comments:

  1. Good article not because of how you write but you know the secret of how to be contented and happy with little or a lot. And at such a young age. Wow!

    And may i share my 2 cents too:-

    Wealth can be a blessing as well as a curse.

    Curse.
    It's a curse if you are so rich that you don't know what to do with your life. You just bum around. You are sick of all the material things, foods & drinks, red light districts, entertainments etc, because you have over indulgence in all these every day; So much that you can't take it anymore; that drive you to a drudgery to experiment with drugs to see whether the drugs from the drudgery will get you out of this drudgery life of yours.

    Blessings
    it’s a blessing when you continue practicing what you do with your life before you become a Millionaire by your sweats or by your father's good fortune. This I think is the ideal practice of "wealthy living" as described by
    Mark Twain and Charles Dudley Warner:-

    "Having only riches enough to be able to gratify reasonable desires, and yet make their gratifications always a novelty and a pleasure, the family occupied that just mean in life which is so rarely attained, and still more rarely enjoyed without discontent.”

    Therefore even you are a millionaire now you shall live like before you are one in order you can enjoy the maximum benefits of wealth over again and again. Never, never over-indulged with your wealth.

    Friends,
    how are you going to live your lives if you are more than a Millionaire now or you are financially free now? Have you thought of it? Are you prepared?

    On the other hand,

    “Nobody has the excuse of ‘lack of money’ for not being at peace and living in integrity,”
    “If they choose to live otherwise, that’s their business.”
    Anonymous.

    ReplyDelete
    Replies
    1. Hi temperament,

      I've always been taught to Be happy with what I have. It was a struggle to practice it coz I'll always compare what others have and think why I don't have it? The urge got even stronger to want to get rich and live a luxurious life as I start to earn money. It's only through some soul searching that I come to understand the true meaning of happiness.

      Thanks for sharing your 2 cents. I have a lot more to learn and journey through life. It's always an adventure.

      Delete
  2. I like it when he said "Singapore has evolved from a third world nation into "what we call" a first world nation today". Haha..

    ReplyDelete
    Replies
    1. Hi,

      Yes that's what we call it. Haha. Whether its real or an illusion is up to us to decide.

      Delete
  3. Hi SGYI

    Good post to remind us once again of what simple happiness means.

    Ive written an article that now I looked back seem to be a sequel to this article. I would probably publish them by tonight or tomorrow.

    ReplyDelete
    Replies
    1. Hi B,

      Wow a sequel. We're on the same page now :)

      Delete
  4. Thanks! Good post. What you are describing is actually the Hedonic Treadmill.

    http://en.wikipedia.org/wiki/Hedonic_treadmill

    And yes, I am content with the "simpler" things in life; don't have to hanker for the more expensive luxury stuff in life.

    ReplyDelete
    Replies
    1. Hi MW,

      Wow, there's actually a term for this. I didn't know it until you shared.

      You've reached a stage of self sufficiency with happiness. I have to admit its not easy to go for the simpler life.

      Delete
  5. Hi,

    I enjoy this blog post.

    I have seen many people spending money trying to impress people around them. The truth is, people around them doesn't really care.

    indeed, contentment and appreciating what we have is severely lacking in many.

    ReplyDelete
    Replies
    1. Hi Solace,

      Its always the ego. We want to be better than others. But this kind of thing never ends and it creates a narrow world view. Yes, if we learn the art of contentment, we'll become happier.

      Delete
  6. Hi SGYI,

    You have been blogging more recently and i enjoy your posts. I believe finishing your part time degree frees up more time in the evening.

    All the best to the next journey after getting the degree :)

    ReplyDelete
    Replies
    1. Hi Solace,

      So you've been silently reading my blog all these while. Haha. Yup, I just graduated but actually I've not been blogging as much as when I first started. It gets tiring sometimes. Maybe you can guest blog for me since you do it for AK too? Haha

      Delete
  7. Haha, i am low profile so never comment much lol

    sure sure, if opportunity arises, i can do a guest post for you haha.:)

    ReplyDelete
    Replies
    1. Oh great! Let me know when you have any ideas. Just drop me an email :)

      Delete
  8. Great post. I share the same beliefs of living life frugally. Sadly, not many of my colleagues share the same view. They believe in living life to the fullest.

    The way I motivate myself is to remind myself that whatever I save from spurging, after setting aside rainy day savings and essential expenses, goes into my investment capital. This goal carries me on till this day.

    ReplyDelete
    Replies
    1. Hi SRSI,

      Yup, not many people take the path of frugality. My motivation is the hope that I can achieve financial freedom early to live the life that I want.

      Delete
  9. Hi SGYI,

    Think your trip to Vietnam has provided you many times the salary you should have earned there. So it's still worthwhile even if you were not paid there. In fact, seeing the influence it has on you, I think the trip has paid for itself many times over. =p

    I grew up in a lower middle income family and frugality should be quite natural to people like me. Just that there are some who believe that frugality is only practised by households that are struggling financially. So once they earn their first paycheck, they go out and spend to prove to the world that they are not poor.

    Many need to understand that most of the high networth are frugal people.

    ReplyDelete
    Replies
    1. Hi 15HWW,

      If anyone wants to go Vietnam together, I can organise one again. Haha. It'll be quite fun.

      Indeed the high networth people are frugal. Many of them come from financially struggling background which might have created the habit in them since young. Even when they are rich, they still lead a frugal life. That's the difference compared to young people who are born in rich families today. Most people in the past just didn't have the privilege.

      Delete
  10. Very Interesting read. Thanks for sharing=)

    ReplyDelete