After graduating from university, I started out in an enjoyable, but relatively low-paying, job. Believing that I had only just enough to get by on every month, I spent freely — on drinks, taxis, clothes, etc. — and never got into the habit of saving. My mindset was that what little money I had left over at the end of the month, if any at all, wasn’t worth the sacrifice, so why bother?
A year and a half later, I realised I was committing myself to a paycheck to paycheck lifestyle. Imagining that I’d be in my 30’s living the same way without a home or a business or any form of assets to my name scared me to death. Things had to change.
Why am I starting now?
Pros
On the positive side, I am in a perfectly good place to start on the path to financial freedom, because:
- I am debt-free with no crippling student loans or credit card debt to hold me back. I was fortunate that my dad believed in providing a good education for his children and he was willing to finance my entire education and at a UK university no less. (The exchange rate then was approximately GBP1 = SGD3. He constantly reminds me that I owe him a BMW. Do the math.)
- I am relatively low-maintenance, in the sense that I have few extravagances. On average, I get a haircut only 2 – 3 times a year, I wear basic makeup and my idea of shopping is thrifting on eBay or at garage sales. I still have to learn to give up a few other luxuries though such as cigarettes and drinks. Hmm, I realised this makes me sound like I go out looking like a troll. Let’s just say that I don’t scare little children on the street.
- I don’t own a car. More honestly, I can’t afford a car. But the great thing about living in Singapore is that I don’t need one, the public transport system is efficient enough to get me to any destination on time with just a smidgen of good time management. Gas? Road tax? Parking? Depreciation? I don’t have to deal with any of it, or pay.
- I have goals. Gimme a break, I hear you say, everyone has stinking goals. I know, but I’m starting small in manageable, conceivable amounts that don’t make me break out in hives at the thought of them.
Cons
At the same time, it’s going to be tough, because:
- I recently quit my job to earn a living as a freelancer. The current gig pays me a decent sum, but my contract ends in Dec ‘07 and I don’t know when the next gig will turn up, i.e. an unsteady paycheck. It’s an extremely liberating, yet extremely scary path to tread.
- I have no discipline. It’s one of my flaws and I know it’s going to be an uphill battle to change my mindset. I enjoy my indulgent lunches and shopping on eBay and it’s too easy to think, “just this once.” It NEVER is.
- I am a smoker. Cigarettes in Singapore are ridiculously taxed to discourage idiots like me from picking up the habit. My habit amounts to a pack a day (it’s brutal, I know). At $10 a pack, it means I’m throwing away $300 a month to this filthy habit. That’s $3,600 a year! I’m trying to cut down and ultimately quit, but it’s difficult one to kick.
Goals
As I said, I’m taking this in small, manageable steps that will hopefully grow into bigger goals. My goals for 2007 are:
- To put $1,000 into a savings account every month. By year end I should have $6,000 in the account not including interest.
- To invest my Central Provident Fund savings. CPF is the Singapore government’s form of retirement savings that’s locked in until I turn 65. A percentage of my paycheck is deposited into a CPF account every month along with an employer’s contribution. The CPF investment scheme allows me to invest all of that money in a wide array of investment products. Subtracting 26 from 65, I have a good 39 years to allow my investments to grow over time. However, now that I’m freelancing I won’t have a regular monthly contribution, so that’s something to be figured out.
- To learn more about investing in general, so I can make a informed decision when I am in a position to make some serious investments.
- To quit smoking, which would translate to savings of $3,600 a year!
There, I’ve laid bare my sad state of affairs. Wish me luck!
1 Comment
July 12, 2007 at 3:58 am
[...] Perhaps. But I believe proper financial tracking nurtures some form of discipline which admittedly, I don’t have. And if I didn’t track my spending, I’d be throwing my money at all sorts of frivolous [...]