Getting rid of materialism

I wouldn’t say that I’m completely rid of materialism. In fact, close friends of mine know that I’ve been having this watch craze lately, and am currently eyeing an IWC Portofino watch which cost a whooping $7,200.

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Gorgeous isn’t it? However, unlike before, I have a better sense of self control and I find myself having no reasons to get it. I will get this watch as a form of reward when a) I completed my ACCA, or b) I have a saving in excess of 100k, whichever comes earlier. Either way, there is still a year or more to go before I accomplish my goals. And who knows? Maybe by the time I accomplished them in a year or two, I may not want to spend so much money on a discretionary want after all.

Over the past year, I’ve come to a conclusion that there’s no end to materialism, it’s like trying to fill a bottomless pit. Many think that buying and owning things equates to happiness. In fact, it’s the total opposite. Think about it, when it’s the time one would usually shop and spend the most? It’s usually when one is unhappy and turn to retail therapy to make themselves feel better. Situations like stress from work, break ups, family problems and unfulfilling personal lives tend to make us shop more. Shopping gives a false sense of happiness, and a false sense of importance. It acts as a distraction from things we are truly unhappy about. When we buy things, we get attention and assurance from shop assistants and we feel a sense of importance. After the purchase is made, friends or colleagues usually notice it especially if it’s a big ticket item and we get attention from it for awhile. This again add on to us feeling important from our purchase. However, the root of our problem was never removed nor even paid the slightest attention to.

I had a bit of time by myself today, so I started asking myself why the sudden interest in watches. Why this strong urge to “reward” myself despite not having real reasons to do so? Is it because I’ve hit an income level of 100k per annum? Or because I’ve climb out of debt and am saving over 40% of my salary? Truth to be told, I wanted to get a watch to mask my discontentment at work, and out of boredom. I’m bored with my boring albeit well paid job. I don’t feel challenged and I’m not growing much career wise. Why not change job? Firstly, I’m not a quitter, secondly, this job offers me two important things. Time and money. Time to complete my studies, and money to build up my savings at a faster rate.

Therefore, I tell myself to focus on experiences, relationships, my goals, and on fixing my problems. Don’t focus on things such as that beautiful IWC watch. When we focus on being a better person, on improving relationships with people in our lives, we will then be fulfilled and material things naturally wouldn’t matter as much anymore. Having said that, I may still get that watch as a reward only when I truly deserve it, when I reached my personal milestones. We’ll see!

Total Expenses for 2013

Total Expenses for 2013

Total Expenses for 2013

I’ve been diligently making a conscious effort to cut down on expenses, pay down debt and save money, and seems like my hard work has paid off!

My expenses still seems to be on the high side mainly due to the fact that my parents have retired, and I’m giving them close to 1k a month. I’ve also contributed slightly over 8k for debt repayment. It’s still a painful reminder of the amount of debt I’ve dug myself into, but am glad I finally have control of my financial life!

Without debt repayment, my total expenses amount to $33,944 which is a comfortable $2,829 per month. I don’t think I can cut my expenses down much further as it is already on the conservative side.

So the golden question. How much do I need upon retirement?
Looking at this table, I probably need about $14,600 per annum for living expenses, which is about $1,217 per month. Do note that these figures have yet to be adjusted for inflation, it’s just a rough guide.

Here’s the breakdown on an annual basis:

Insurance – $3,000
My insurance premium is a 15yr term insurance which I’ll stop paying when I turn 39. However, I believe I need to step up on health care insurance due to old age, and premium usually cost more the older we are.

Phone – $600

Transport – $1,000

F&B – $5,000
I’m a foodie and I don’t plan to scrimp on food.

Travel – $5,000
I’ll probably not shop much or have much entertainment, so I’ll reserve $5,000 a year for traveling and vacations.

So what’s the minimum amount I need to have for retirement? A quick calculation shows $300,000 is enough to fund my retirement. A $300k portfolio with an average return of 5% per annum is enough to generate me $15,000. Just enough for the expenses listed above!

Why we need to have Emergency Funds

Lately I’ve been thinking about my emergency fund.

To most people, emergency fund means having a pool of cash to fall back on in case anything bad happens, such as to tide over a job loss, or to pay for unexpected medical bills. Besides saving for “bad” emergencies of cos, an emergency fund is useful even when our life is a bed of roses. (I don’t like to just focus on negative things).

Here’s why:

– you decided that you have enough of your boss and fire him/her. You can use your emergency fund to travel for awhile before looking for a new job.

– you decided to have a career switch. For people around me, most are already holding senior executive or mid management positions. We used 6 – 8 years of our lives to build up our existing careers, but we may realised it’s not what we actually wanted and decide to make a complete career switch, where we may have to start from the bottom all over again. We may then need to use our emergency fund for the short fall in salary.

– being a woman, it’s common to leave our jobs to care for our kids especially when they are still young, or at least for the first few years. Imagine you and your husband do not have an emergency fund and both your salaries are needed to fund your family expenses. You’ll be caught in a situation whereby you want to take full time off to take care of your kid but can’t.

– having an emergency fund also means that you can grab hold of any opportunity that comes along, like setting up your own business, or buying more equities during crisis time (50% sale!). While some may argue that we have our opportunity fund for that, sometimes, such funds are already being fully utilized and an emergency funds serve to step up on our exposure to such opportunities.

Now, where do you save your emergency funds? For me, majority of my funds are in a UOB Fixed Deposit account, and the rest in a UOB saving account. It is advisable to keep your emergency fund liquid so it’s best to save it in a Fixed Deposit account, or a saving/current account where you can have easy access to.

So how does one determine how much emergency fund to have? One friend suggested 6 months’ worth of salary, and another recommended 12 month of living expenses. After giving this piece of information some thoughts, I’ve decided to use the higher of 6 months salary, or 12 months living expenses, just to be on the safe side.

Unknowingly, I’ve been saving aggressively (I saved about 45% of my salary last year), and now have up to more than 12 months of living expenses up my sleeve. It’s time to step up on investing and I’ll move the excess funds into my opportunity funds for investments whenever the opportunity arises. I’ll also stop contributing my monthly savings into this account and to channel it to my upcoming Europe trip in Sep. Yay honeymoon!

How to maximize your savings

I don’t know about you, but I do find it harder to save money now than ever before. For the first 8 years of my working life, I had never saved a single cent. We live in a consumerist society whereby we are constantly being tempted with products and services, promising us a more fulfilling life, with many buying into the story of how materialism can brings us happiness. From driving luxurious cars like BMW to Audi being the epitome of success, to owning designer brands like Chanel and Hermes to showcase a woman’s high earning power. Like the saying goes, “fake it until you make it”, people are flaunting what they own materially to make themselves look good and feel good. More and more people are going into debt as a result. I was one of them and recovery was painful. The path to wealth accumulation is actually a stimulation of simple steps, attainable by most.

So how does one accumulate wealth the sure but steady way?

1) Track and cut down on expenses

I used to wonder where all my money went at the end of the month, leaving me pretty penniless and having to live on credit. Tracking of expenses helps to add up my individual expenses to see where my money went exactly, and I was surprised at how much money I spent and how much the small stuff can really adds up. For example, I used to buy dresses from online shops thinking it’s just $30 for one dress and before I knew it, I spent over $600 on shopping just for one month. If you’re like me and are constantly wondering if there’s a silent thief quietly stealing all your money away, you better start tracking your expenses. You’ll be surprised at how much you spent on eating out, on a months’ worth of Starbucks coffee, or on taking cabs each month.

2) Develop a budget and stick to it

After tracking your expenses for a month or two, spending patterns should emerge and you now have a clearer picture on where your money goes to each month. Categorize spendings into different types of expenses incurred. Start recording your monthly income.
Salary – Expenses = Savings
I know you’re probably laughing at this simple equation. But how many of us are fully aware that having wealth starts from the leftovers from our earnings? Start looking on where you can cut back on and trim accordingly. The greater the balance is, the more money you are able to save. Many people yawn at the thought of following a budget but every business and corporation has a finance department and a budget in place for very good reasons. After tracking my expenses and sticking to a budget for a few months, my savings actually start to grow and I realized it’s actually possible to accumulate wealth. It just requires discipline and sacrifices.

3) Automate your savings by paying yourself first

The very first thing I do when I get my salary is to transfer a portion of it into a separate (untouchable) saving account. After a few months of sticking to a budget, you should be comfortable enough to know how much you need to set aside for living expenditures. However, do remember to budget for adhoc/ surprise expenses like birthday gifts for friends and family members, for festive seasons, renewal of yearly health insurance, provision for yearly vacations etc. This is to avoid digging into your savings/ emergency funds when these situation arises.

4) Earn more

There’s only so much you can cut back on, but there’s literally no limit on how much you can earn. (Stop complaining, you can always get a part time job if you are too poor to save money after covering basic necessities.) Over a one year period, I have optimized on cutting down on unnecessary expenses and am saving exactly 20% of my monthly salary. However 20% is just the bare minimum on how much we should be saving, and I’m working on maximizing my earnings. I aim to complete my ACCA by the end of this year, and the qualification has the potential to earn me a higher salary and a brighter job prospect, If your company is giving you a 3% increment every year and you’ve been with the company for over 5 years, then it’s probably time to ask for a promotion or seek greener pastures. Always upgrade yourself and learn whenever the opportunity arises.

5) Widen the gap

Aim to widen the gap between your income and expenses. The bigger the gap is, the greater and faster your savings accumulate. Avoid lifestyle inflation by not treating your salary increment and bonuses as an increase in spending power. While it is important to reward yourself (by spoiling yourself to something you’ve always wanted using the first month’s increment, or a small part of your bonus), do treat the increase in salary as a chance to save more. Or rather, ignore the increment and spend as budgeted, as though you did not get a raise at all.

6) Stop comparing with others

There will always be people driving fancier cars, owning more designer bags or living a more glamorous lifestyle. They may be earning more, have lesser commitments, or simply just come from rich families. Life is unfair that way. Comparing in term of owning material goods get you nowhere close to having a million dollar anytime soon. Prioritized and understand what is important to you. Is having a comfortable retirement and not having to worry about your child’s education more important than owning countless Hermes bags?

7) Avoid debt

I never get to save money when I was in debt. Simple reason being interest and late charges always eat into the little savings that I had. Being in a 18k debt means a couple of hundreds of dollars flushed down the drain (and into the banks’ pockets) every month. Now I avoid new debt at all cost and pay my credit card bills on time every single month. If I find myself thinking of breaking up my next purchases into installments, it means I just can’t afford it.

8) Invest regularly and prudently

Saving money is great. But remember banks pay you peanut interest of between 0.05% to 1% (for the case of fixed deposit) for parking your money with them. Once you have built up your emergency fund (I’ll talk about emergency funds in another blog post), invest the excess cash to earn more than the pathetic interest from banks and slowly accumulate/ reinvest to generate passive income for retirement. Don’t know what to invest in? While I’m no investment expert, I do recommend buying ETFs (exchange trades funds) to gain access to a pool of underlying assets for diversification which earns a dividend return of 2-3% annually. Instead of buying blue chips, the STI ETF pools together investors’ resources to dabble in a mixture of blue chips like the major banks in Singapore (DBS, UOB, OCBC), Singtel, Starhub, Keppel Corp, Jardin, Sembcorp, Capitaland, Olam, Noble etc. This ETF is also a close reflection of how the Singapore economy is performing.

So there you go. These steps worked for me, and I hope they work for you too 🙂

Wedding Budget

Wedding is one of those life events that depletes or eats into a major part of our savings. Albeit money well spent, it is important not to go into debt for just a one day event. Having been debt ridden, I was extra careful and one of the very first thing on my planning list was to work out a budget even before we started on our wedding preparation.

Our Wedding Budget

Our Wedding Budget

(Do note that I did not include the cost of my engagement ring, dowry price, betrothal gifts and red packets collected as these are subjective and confidential.)

Areas we saved on:

1) We decided on a lunch banquet for our wedding because we refused to pay 30% more for dinner at the same hotel, for the same ballroom, and with everything else being the same just because one was held during the day, and the other at night.

Amount saved: $8,845.20 (Lunch costs $968++ per tables, Dinner at $1,238++ per table)

2) Instead of going to a dental clinic to have our teeth whiten at $1,000 per person, we decided to purchase one of those Groupon vouchers at $99 each. I would say it works as our teeth were a few shades lighter, but more sessions are recommended for better results.

Amount saved: $1,802.00

3) We also saved on paying for a Solemnization Venue by having our solemnization done in the hotel. However, do note that some hotels do charge a rate ranging from $2,000 to $5,000 for using their venue outside of the ballroom. Goodwood Park hotel actually quoted me $3,000 to use their poolside for solemnization.

4) I didn’t get a wedding ring, and instead, my engagement ring also served as my wedding ring as I find it unnecessary to carry both rings. I also couldn’t find something that I really fancy after countless trips to the jewelry stores, and did not want to buy a ring just for the sake of buying.

Amount saved: $2,000

Areas we splurged on:
1) We engaged a 3 piece live band to play live music on our wedding day for a short span of 1.5hrs at $1,498.00. However, we felt that it was worth it for the nice ambience the live music had created and many guests actually enquired about the band after.

2) Dessert Booth and Peking Duck Booth. These are pre-lunch reception treats that we ordered for guests who arrived early, as by the time the lunch banquet officially starts, it’ll be close to 2pm already.

3) Rental of additional wedding gown at special rate of $500 from our bridal studio. Our wedding studio provides us with 2 actual day gowns but I wanted another gown for my solemnization. Although I admit it was quite a splurge for renting a gown that I only wore for less than 2 hours, I REALLY liked it and had budgeted for it and $500 was actually a steal with additional gowns costing from $800 to $1,000 each usually.

Costs we could have avoided:
While the above costs are splurges which we willingly paid, the below items could have been avoided as they have no added value to our wedding.

1) We topped up an additional $1,500 for extra 12 photos and for all hard copies for our pre-wedding photo shoot. Post wedding, we did not even bother to look at the photos again and felt that this amount could have been for better use.

2) We also topped up an additional cost of $500 for a more senior photographer (an Art Director featured in the Tatler magazine) to shoot our pre-wedding photo shoot. This was a total waste of money as the photographers are actually all equally good, and we weren’t exactly pleased with how the photos turned out as well.

3) I bought a Chanel earring for $490 for and only wore it once since my wedding. It was totally unnecessary, and now I feel like selling it on ebay already.

All in all, there was a potential $2,490 which we could have saved on.

I hope my unmarried friends could use this to plan their wedding better, and do remember not to get overly caught up in a one day event, as after all, it is the marriage that matters the most.

Happy planning!

Our Wedding – Lunch Banquet

I can’t believe 3 weeks flew past just like that! We were busy for months before our big day on the 19th of Jan’14, and before we knew it, it was over. Thank goodness we have some nice photos to look back on 🙂

I have previously posted my morning highlights photos here, and shall proceed on to include more photos for the lunch banquet held at the Intercontinental Hotel.

Cocktail Reception

Cocktail Reception

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Beautiful ladies tending to the reception counter

Beautiful ladies tending to the reception counter

Johan, one of my closest friend EVER

Johan, one of my closest friend EVER

Oops, that's my boss lol

Oops, that’s my boss and he sure looks awkward lol

The Dessert Booth

The Dessert Booth

Touching up before the first march in

Touching up before the first march in

Touching up before the first march in

Touching up before the first march in

Feeling jittery

Feeling jittery

With our close friend Kenny before the march in

With our close friend Kenny before the march in

With Joanne & Doink who go married a year before us

With Joanne & Doink who go married a year before us

With Miko and Weixiang, who are getting married 4 months after us

With Miko and Weixiang, who are getting married 4 months after us

Anxiously waiting for our cue to march in

Anxiously waiting for our cue to march in

FINALLY~

FINALLY~

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As the song “From This Moment’ is playing in the background…

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I wish this moment can pause forever

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🙂

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Giving the camera a cheeky smile :p

Cake cutting ceremony

Cake cutting ceremony

Fun fact: Prior to this, I totally wasn’t aware that there’s a slot for the knife and the whole cake is FAKE! LOL!

My lovely friends making a speech. Love you girls!

My lovely friends making a speech. Love you girls!

Obviously touched by their speech

Obviously touched by their speech

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Love the soft lighting of this shot

Love the soft lighting of this shot

Another close friend of ours making a speech

Another close friend of ours making a speech

And this time I really cried

And this time I really cried

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Wish I could share her speech here. Or maybe I should…

The lovely band is playing while we were upstairs changing

The lovely band is playing while we were upstairs changing

Our 2nd march in

Our 2nd march in

Time to pop the champagne!

Time to pop the champagne!

Popped!

Popped!

Champagne pouring ceremony

Champagne pouring ceremony

Love the view of the ballroom

Love the view of the ballroom

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Finally it's our turn to make a speech...

Finally it’s our turn to make a speech…

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My new family

My new family

My lovely family

My lovely family

With some of our closest friends

With some of our closest friends

Buddies forever!

Buddies forever!

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More great friends

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More great friends

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Check out my murderous look when we were “forced” to drink

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Cheers!

My da jie (big sister)

My da jie (big sister)

Love these folks!!

Love these folks!!

Another murderous given for the day

Another murderous given for the day

And this is me saying to  Cherie, "it'll be your turn in 6 months time".

And this is me saying to
Cherie, “it’ll be your turn in 6 months time”.

Cheers to friendship!

Cheers to friendship!

And this is how I cheat by pouring champagne back to their glasses

And this is how I cheated by pouring champagne back to their glasses

And this is how I cheat by pouring champagne back to their glasses

And this is how I cheated by pouring champagne back to their glasses

Yeah!

Yeah!

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My lovely ex-colleagues and finance girls

More ex-colleagues from SocGen

More ex-colleagues from SocGen

And these are my favourit-est people of all!

And these are my favourit-est people of all!

 
My current colleagues
My current colleagues

My current colleagues

Friends from my school days!

Friends from my school days!

My cute colleagues!

My cute colleagues!

Gosh, I love this picture!

Gosh, I love this picture!

These are the folks I know I can count on for ANYTHING

These are the folks I know I can count on for ANYTHING

My favourite girls!

My favourite girls!

My favourite babe :)

My favourite babe 🙂

My secondary school bestfriend

My secondary school bestfriend

Hugs!!

Hugs!!

Family

Family

Commandos!

Commandos!

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SocGen rocks!

With pretty mama Adelyn

With pretty mama Adelyn

Thinking back, I really really had a lot of fun during my wedding. It felt so good to see so many relatives and friends, and Andy and I are so fortunate to have everyone’s blessing. We are lucky to have a group of close friends who made sure everything runs smoothly.

One last note here, a wedding is definitely a joyous and magical event. However, as someone who writes about personal finance matters, I’ll like to emphasize that a blissful marriage is what really matters. After all, a wedding only lasts a day while a marriage is for a lifetime. Therefore, it is critical to spend within one’s means for one’s wedding. Money arguments between couples are the top reasons why a marriage fell apart. Don’t let that happen to you, handle your marriage and your money well.

Cheers!

Our Wedding – Morning Highlights

It has been 3 weeks since my wedding day and it’s been awhile since I’ve blogged! Immediately after the big day, I fell sick, probably due to all the excitement and from lack of sleep. Upon recovery came the Chinese New Year, and we were all busy preparing for it.

I’m looking back on my wedding with fondness and I sure had lots of fun! Now, lets enjoy the photos!

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My gorgeous gown

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Getting ready at 5am

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Now I’m all set and ready!

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My handsome Dad

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The band of brothers

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They are so smart looking aren’t they?

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The impatient sisters are waiting for the gatecrash to begin.

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Time to give some red packets

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What? Only $2?

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And Wen Dees managed to snatch more red packets

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Time for some sour shots!

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Sweet sweet sugar sticks up next

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Followed by bitter and spice

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Cheers!

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And someone’s caught cheating, thanks to the camera man

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It sure looks spicy!

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And now time to clean their pores…

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And some lippy for the groom?

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Muack!

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And here’s another sweaty kiss. Muack!

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And he comes my dashing groom, after the gate crash he went through.

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With my pretty sisters

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Time to head out…

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For photo-taking at Gardens by the bay

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An extremely happy day for us 🙂

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Love this candid shot!

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The brothers and sisters

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Time for me to throw the bouquet!

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1, 2, 3!

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And Miko got it!

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With gorgeous May!

I’ll be posting more photos soon!