Sometimes, its not how much you earn, but how much you spend (or save) that has an impact on your financial life. I have known people who earned the above average salaries but still live paycheck to paycheck due to a flamboyant lifestyle. I also know someone who does not earn alot, yet is able to build up quite a substantial amount of savings over the years. I decided to look back on my spendings for Aug 2013 vs August 2012, to see how much I have cut down. I had a hard time sorting through my previous year’s bank statements and credit card bills as I didn’t used to have a budget system in place.
|Recurring Expenses (SGD)||Aug-12||Aug-13||Differences|
|Credit Card Installments||450||486||36|
|Mobile Phone/iPad Subscription||155||105||(50)|
|Food & Entertainment||1,078||700||(378)|
|Shopping & Misc||439||199||(240)|
1) Credit Card Instalment – Zero saving:
From the first glance, it looks as if I am repaying the same amount of debt as I had from a year ago. However, I had previously carried a balance on all of my credit cards (3 card in total), and $450 is just the minimum balance I pay each month. I was in such a mess that I actually did not bother opening the mails for my credit card statements, as the balances were just too painful to look at. I just automatically pay $150 a month, hoping that by paying the minimal amount, my credit card debt would magically disappear on its own. Now, $486 is the true value of how much I am actually paying each month, which is solely made up of 24 months installments I foolishly signed up for bags/facial etc a year ago. I no longer fear opening my credit card statements as they usually show a ZERO balance now.
2) Mobile Phone/iPad Subscription – $50 saved:
I managed to get a better plan on my monthly subscription hence the savings of $50 a month.
3) Transport – $130 saved:
I managed to saved $130 on transport from not taking taxis/cabs whenever I am too lazy to take the bus or MRT. Singapore is a very small and relatively efficient place especially when it comes to transport infrastructure. So taking a cab is more of a luxury than necessity most of the time.
4) Food & Entertainment – $378 saved:
It’s scary how much I used to spend on food and drinks and other leisure activities. Although the current $700 a month on Food is still on the high side compared to some of my more frugal friends, I am pretty happy with the savings of $300 or more, and think it is quite substantial. Eating out is one of those things that I truly enjoy, so I’m not too big on cutting down and being frugal on this area. Drinking and clubbing on the other hand is something that I am able to cut down on, hence the saving of over $300.
5) Shopping & Misc – $240 saved:
I only set a budget of $100 for shopping and misc items each month, so I had actually exceeded my budget for Aug 2013. Comparatively, I did stop shopping online which contributed to the bulk of my overspending in this category. I now cringed when I open my drawer full of new clothes that I had bought on impulse. They are now part of the clutters in my messy room.
6) Unaccounted for – total elimination!
This is the most interesting category in my list of expenses. These are ATM withdrawal which I had never bother tracking and I do not exactly know what I spent on. It is possibly made up of food, misc items, mindless shopping, and taxi fares. This year, I make sure all my money is being accounted for using a excel spreadsheet that I created and now all expenses are accounted for. It feels great to be in control!
I used to think that there is no way to I can minimise spending and to start saving money. What I have here shows that through conscious efforts and the motivation to improve financially, IT IS POSSIBLE. It’s just a matter of how badly you want to save, to forgo instant gratification and save for something bigger like a fulfilling retirement, financial freedom, or even owning your dream home.
I am very happy with the amount I’m saving each month. A year ago, I had no idea saving money is so easy, After putting my mind to it and building a budget system for myself, it has become an habit. I now hope to maintain the same level of spending, and at the same time, to drastically work on increasing my income so that I can save more.