Saturday, January 21, 2012

A dollar saved is a dollar earned

The moral of today's post is that your path to financial freedom must depend on the lifestyle you want to lead.

My colleague shared on Thursday that he has a very big piggy bank that he kept his change. He stashed away enough to eventually buy an iPad. Last night, I paid off one of my largest credit card bills ever since taking on my own card. The bulk came from lessons I had signed up and books I had bought on Amazon.

Financial freedom depends on the lifestyle you want to lead for the obvious reason that whatever you can save to spend at a later date, depends on how much you can earn and how little you can save, adding in the interest. Some people have no qualms taking SQ  while others camp on the websites of budget airlines for that super-fantastic offer. Some people prefer taking a cab to work even if they are not in a hurry to get to work.

However, there is a distinction between sloppy spending habits and lifestyle preferences, unless of course sloppy spending is part of your lifestyle. A simple example of a sloppy spending habit would be that you drink Coke everyday at home. But instead of buying a big bottle from the supermarket, you buy a can from the 24-hour convenience store. This is sloppy because it is much cheaper to buy your fix from the supermarket and furthermore, you do not have to consume it immediately.

Hence the piggy bank photo for today's post. I will set aside an amount for my daily expenses, and if there is any left, I will put that in. Alternatively, if you have higher spending power, you can try having a bank account that is for such surplus. I have a ex-classmate who told me that using a certain card to pay for her renovation gave her a considerable amount of cash back, although there is a cap. One way round the cap is to use different cards but that might prove to be an administrative inconvenience.

For myself, shopping for books on Amazon is much cheaper than buying from the local bookstore because the books I am looking at cost at least  SGD 100 and buying from Amazon gives me great savings. If the book is a small item, I will still buy from the bookshop as I do not have to wait about 1 month for it to ship over.

I do recognize then when you do save money on something, you spend it elsewhere. Piggy banks and savings account are not immune to those with a weak will. However, it is always a first step towards financial freedom by rediscovering simple saving and better spending habits. Sedikit-sedikit lama-lama menjadi bukit.

It is the Chinese New Year weekend, perhaps you too could start saving bit-by-bit on Wednesday!

1 comment:

  1. Wonderful post. I totally agree with you.