Friday, December 26, 2014

Chit Chat With Susurrate: Saving $19,000 In One Year


The following is a guest post by Susurrate. He's just like any ordinary guy out there but manage to save close to $19,000 in just one year. Here's his story and how he did it:

Hi fellow readers of SG Young Investment. Recently the Author has been writing about frugality and I guess I could write something as well.

Just a background information for you. I am currently 26 and single and I do go out and have fun with my friends. I come from a low income family, in fact, my parents are WorkFare Income Supplement recipients.

Through sheer hard work and frugality, my parents have supported my education up to a diploma. I am currently working full time earning a middle income and pursuing a part-time degree.

Being brought up in a low income family have allowed me to pick up frugal habits from my parents. Since young, I have been saving money to buy what I wanted instead of asking from my parents, so I guess that’s how I learnt early the value of money.

While I earned more than my parents combined, I do not splurge on luxury or status. Because of this habit, I find myself spending little and have a lot more disposable income than what the media portrays.

Rather than telling people that they should do this and that, or they should not do this and that, I prefer to show than to tell. I have been tracking my expenses for the past 2 ½ years and these are the numbers as well as my take home pay for the year of 2014.

I’d say I’m fortunate to be in a company where my lunch is provided. I have a bento set everyday IF I opt in, instead of rushing and competing with the lunch crowd. I also prepare my breakfast at home and have dinner at home when I have nothing on after work. Clubbing and smoking are not my cup of tea as well.


Total Take-Home Pay:$38,656.31
Home related expenses:
Phone and Broadband$710.88
Repairs$74.84
Transportation:
Public Transport$1,323.07
Food:
Groceries$155.95
Dining Out$675.37
Entertainment:
Vacations$283.00
Movies$53.50
Books$85.01
Gifts / Weddings$478.54
Others$96.66
Insurance:
H&S$781.70
Life / CI / TPD$3,718.08
Personal Wellness:
Clothes & Shoes$32.85
Haircut$80.00
Wallet (one-off)$56.58
Education:
School fees$3,814.55
Stationery$7.46
Parents:
Medical$526.05
Allowance$6,000.00
Income Tax:$19.00
Total Expenses:$18,973.09
Unaccounted Expenses (5%)$948.65
Total Savings:$18,734.57

So there you have it! A savings of $19,000 a year or almost $100,000 in 5 years for a middle income fellow, if I can keep this up (I could probably save more as I would no longer have expenses for my degree). Add another $15,000 in CPF contributions from my employment and I am $34,000 wealthier for the year.

If you notice, I spent more on things that matter, like parents’ allowance and their medical check-ups and outpatient bills, my insurance policies, and building meaningful relationships with friends. I believe that being frugal is all about spending your money wisely, not wasteful spending.. I am grateful for everything I already have.

Lastly, I’d like to leave a quote,

“The rich man isn’t the one who has the most, but rather the one who needs the least.”


My Thoughts:

The guy is a friend whom I've known for the past few months. He's the same age as me and we're on the same journey to financial freedom.

Like him, I do not come from a rich family. I too studied part time for my degree and paid it up completely with the money I earned from my full time job. Even after paying for my school fees which is a five figure sum, my financial position is still healthy and I'm on the way to meet the target of 100k savings in 2 years time. I'll update my income and expenditure on a separate post as we approach the end of 2014.

What has your savings been like for the whole of 2014? Hope you enjoyed the chit chat post. There'll be more to come. Stay tuned!

Enjoyed my articles? 
You can Subscribe to SG Young Investment by Email 
or follow me on my Facebook page and get notified about new posts.

Related Posts:
1. Chit Chat With a 17 Year Old Young Couple on Financial Planning For The Future

15 comments:

  1. Really commendable and i would like to express my utmost gratitude to you. You have indeed inspired me to be frugal too,

    Just a short introduction to myself.
    Am age 29 this year. Engaged to my wonderful fiancee. Studied part time degree and financed with income from my full time employment. Have been saving furiously for the past 5 yrs since i started my 1st full time job (am still at my 1st job)

    Have fortunately amassed $22k in cash holdings and $63k in my portfolio of stocks. Still another $15k more to reach the magical $100k mark by 30.

    ReplyDelete
    Replies
    1. Hi,

      Wow you're very close to the 100k. Congrats!

      Studying part time is never easy. I been through that and it was tough. But all was worth it in the end.

      All the best to your wedding soon! I'm sure you've already planned it out and with this savings, it'll be much easier for you to start a family. I'm still on the way there. Haha

      Delete
  2. quite an above average income earner from what i see. one of the normal spending records compare to the extreme people that i see around.

    ReplyDelete
    Replies
    1. Hi Kyith,

      Yup, I do think its quite a balance between spending and saving.

      Delete
    2. Hi Kyith,

      Based on the numbers he is earning $4k/mth (bonus averaged out). slightly above median of $3,770 (Jun 14 numbers)

      i guess there are still room for more savings

      Delete
  3. Wow.. “The rich man isn’t the one who has the most, but rather the one who needs the least.” seeing this quote makes me wet.

    ReplyDelete
    Replies
    1. Hi jfree,

      I hope the wet is a good wet? Lol

      Delete
  4. Hi SGYI,

    This is a nice breakdown of expenses! i can see many things and some suggestions for Susurrate from this.

    1. Perhaps he can cut down on transport. $110/mth seems to be on the high side. reduce cabbing perhaps?

    2. Wedding bombs! Come to think about it, we ARE in the age where friends are getting married. It would be good to budget some expenses for wedding gifts. *How I hope my friends don't hold wedding banquets... LOL*

    3. 5-6 movies a year seems normal, of course if these are weekday movies then he could have seen 6-8 movies.

    4. Is he an avid reader? Library is free, unless he is buying the better books for future reading.

    Regards,
    Matthew

    ReplyDelete
    Replies
    1. Hi Matthew,

      I spend less than $100 on transport. Strictly bus and MRT

      Wedding bombs better budget for it. But somehow won't know how many will happen in one year. If he has 100 friends then i think he would die soon. LOL. Just 10 friends get married and it'll be at least $1000 for that year.

      I already watch more than 5-6 movies this year. Lokks like i'm on the high side.

      I don't usually buy books. Yes, library is my best friend.

      Delete
  5. 32.85 on clothes and shoes for 2.5 years? Seems really low, Unless company allows dress down?

    ReplyDelete
    Replies
    1. Hi momo,

      That's for one year :)
      And he doesn't need formal clothes for work.

      Delete
  6. My advice to all aspiring people who wish to save more: avoid excess life insurance policies. Not trying to poke holes here. But using the data, $4,500 per year is a lot. If one is to buy term policy (200k coverage+ $200kTPD) and a H&S policy which covers private hospitals charges as well. The annual fee will amount to at most $800/ year. That is a savings of $3,700 (more than 1 month of his take home pay). Assuming he invests this $3,700 amount in equities using a buy/hold method in STI index stocks, he will get an annual return of about 7%. This is higher than his insurance policies returns. If he wishes to apply a 50/50 allocation of bonds/equity, he can try a method of topping up into his CPF SA( function as Bonds) and 50% into equities, this methodology will yield him a 5.5% return. p.a. and tax savings of about $130. This is still higher than insurance returns.

    Hope we can create awareness of this point in Singapore to let individuals know this is one major avenue they can save on and use it to invest wisely to reach their retirement goals. My insurance expense is $248/year for your info.

    ReplyDelete
    Replies
    1. Hi Chan Yuan,

      Thanks for bringing out the point on insurance. Another person also pointed the insurance part out on FB and there was quite a lot of discussion going on. I have clarified with my friend. The H&S insurance he's paying for his parents also. This is the cash portion.

      As for life/CI/TPD insurance, he's got himself a 1Million coverage for that cost.

      Delete
    2. Hi,

      Thanks for the checks. One million coverage is quite a lot for his age, however how much to cover is subject to each individual. Nevertheless it is quite ok at the cost, 1 million coverage term + CI should cost around $2k plus per year, perhaps the rest is due to his parent's life insurance premiums.

      To cap off, all the best to your friend and you on your financial journeys.

      Delete
    3. Hi Chan Yuen,

      He had a disability insurance and an endownment as well. Thank you for your well wishes. I wish you all the best too :)

      Delete