Have You Ever Wondered Where Your Money has Gone?

In the previous post, I shared with you on How Much Your Drinks Actually Cost You. In this post entry, I am going to share with you, to make you realized, where did you spend your money to.

You earn RM2000+ as a fresh graduate, and after few years, you earn RM3000-RM5000. Nonetheless, do you realize you didn't really save much of it?

The Reasons WHY you can't save:

1. Your expectation of "quality of life" has changed. You no longer wear Bata, Seed, Padini, or some normal range items. You will opt for something more sophisticated. Hence, your expenses have risen proportionately to your earning (or spending can be more than earning for some people).

2. Fixed commitments and burden. Other than the fancy outfits and highly overpriced food in the beautifully decorated restaurants, the responsibilities on your shoulders should increase as time goes by. You'll need to pay for car loan, house loan, study loan, insurance, utilities bills, and even feeding your younger siblings if your parents cant afford to. Don't be headache just yet. The list has not done here.

3. You do not plan. Most of the people practice the YOLO (You Only Live Once) philosophy nowadays, without taking into consideration most of us won't just die tomorrow. Unless you're terminally ill, or else you really should reformat your mind of what YOLO really means. If you do not save for emergency now, probably you'll seek for dying solutions for real. You need to save at least 10% of your monthly pay from the day you start working. EPF can only last you at most 5 years if you do not use it properly. 

4. Peer pressure. You don't want to feel leftout and a lot of us are trying to fit in, hence you spend by following how others spend, but not how much you have in your bucket. Always remember, if your peers can't understand why you spend prudently, leave them. They are obviously not your true friends. I mix with all level of age groups. And these people would understand my financial limit to be spent on outings. If you feel the pressure, tell your friends you can't splurge like there's no tomorrow, if they don't understand, leave them. These so-called friends won't feed you when you are poor, your bank account would.

5. Use your "future money". It's called credit card in layman term, or plastics. Some people look so Vogue-ly filthy loaded from outside by the way they dress and eat, but you have no idea they are covering from one card to another. That's quite smart actually, for short term usage. IF you don't mind the minimum 16% of interest charges from the banks, keep on using them and just pay the minimum amount. You're on your way to bankruptcy. 

Now, let me ask you. Do you actually record your daily expenditures? Yes, it's troublesome, but you'll thank yourself for doing that later on. 

Let me show you HOW: 

1. Create a budget list (on a monthly basis). You need to have below categories:

1. Take home income - Salary + Part Time 
2. Fixed expenditure - Those loans, internet bill, pocket money you give to your parents, pets' expenses, etc, which has a fixed amount. 
3. Adjustable expenditure - Food, entertainment, clothing, groceries, telephone bills, electricity, water, etc.
4. 10% of unexpected expenditure - Friends getting married, household items repair, emergency travelling, etc. 
5. ANNUAL budget - Travelling trips, car insurance, assessment fee, car maintenance, books, gift, medical check up. These should be factored in as well. Usually if you barely make ends meet, this is where your bonus come in to ease your burden a bit. 

2. Linked to #1, it's how you monitor your spending. You need to record your earning and spending EVERY DAY, of all the purchases you make. By categorizing them, you can see where you spend the most in a month and you can adjust your budget accordingly, in order to save yourself some pennies.

3. Do not give up on saving money. If you give up saving money, money will give up on you. Make it a habit to record your expenses and reduce accordingly.

4. Do send me an email to receive a copy of my excel spreadsheet to record expenses. I have been doing that since 6 years ago. It gives you an ideal on how do I do my financial planning. It's free, but I would need your help to share my blog with your friends. Just some clicks will do. :)

Share this post if you like it! Help yourself and help the people around you! Cheers~

Regards,
Scott

Have You Come to Realize How Much Your Drinks Actually Cost You?

The Malaysia economy situation is going down the drain. Nonetheless, do you realize you don't reduce your expenses while you are complaining you can't earn much faster than the inflation does? In fact, you can save A LOT from NOT ordering drinks outside (now all the F&B sellers would hate me). 

Simple calculations
(based on the average monthly situation):

Example 1: Kopitiam Lifestyle 

RM1.50 - RM2.00 per cup
3 meals per day 
30 days per month 
RM1.50 x 3 meals x 30 days= RM135 

RM130 - RM180 saved for a month from not ordering drinks!
(Now, think what you can do with the money that you could have saved)

Example 2: High Class Tai Tai (rich housewives) Level

RM10 - RM15 per cup 
2 meals per day (with the assumption Tai Tais don't wake up that early) 
30 days per month
RM10 x 2 meals x 30 days = RM600

RM600 - RM900 saved IF you don't order expensive drinks like milkshake, expensive coffee in every meal you take!

Example 3: Common Gen X, Y, Z trend (slightly complex with forecast scenario)

Working day = RM1.50 for breakfast drink, RM1.50 for lunch drinks, RM5-10 for dinner drinks 
Weekends = RM10-15 (lunch drinks), RM15-20 (dinner drinks) 

Working day = RM1.50 + RM1.50 + RM8 = RM11
RM11 x 22 working days = RM242

Weekends = RM10 + RM15 = RM25
Saturday + Sunday = RM25 x 2 = RM50 
RM50 x 8 days = RM400 

RM242 (weekdays) + RM400 (weekends) = RM642 

Approximately RM500 - RM800 can be saved every month, if we don't drink the way we are doing it now. (just FYI, this hasn't factored in the Starbucks, themed cafes, alcohols that you would usually over-consume during Friday, Saturday and Sunday).

Some of you might think the data isn't reflecting the truth. If you don't believe it, try to record it down for a month. Don't try to save, just do it as usual, but just record the cost of drinks you spend for a month, you will be surprised by the amount of money you spend on drinks.

I was from a very average family and our family members didn't usually order drinks. We were trained to order Chinese Tea and warm water, which was free back then. And actually if we have soup or liquid in our food, it's not advisable to gulp down that full glass of drinks as well, which will not help with our digestion.

Yes, I am being very prudent in spending money. The reason is because the value of money isn't as kind as it used to be. People earned RM2000 per month, and still could raise 4 persons (the bread winner, wife, 2 kids) with basic needs. Ask yourself, what can you do with RM2000 nowadays? And as fresh out, we only earn RM2-3k and we are complaining all right? We leave the inflation topics aside now, focus on what you can do, to save you some pennies to be used on other purposes.

I am not asking you to not enjoy the delicious drinks out there, this post is just for illustration purposes. But just to be honest with you, my dear readers, I only spend less than RM50 per month for my drinks I guess. And I will make my own drinks at home, and you can adjust how much milo powder you are going to put and how big mug and concentrated you want it to be. Isn't that wonderful too?

Now, it's just a beginning lesson on how can you save to buy a house. :) I will share more on personal finance management in the future posts. Stay tuned!

Have you come to realize already? 

Share this post if you like it! 

Scott