Friday, August 21, 2009

[personal finance]

I missed the NDP Rally for the first time in many years yesterday as I was at ww’s house for steamboat. I’ve always watched the NDP rally with my parents, for many reasons

1) I like to see the PM praising Singapore or commending people for their efforts. It will make me surge with pride at our little nation, with its amazing progress, both economically and socially.
2) Usually during lessons the next day, the teachers/lecturers will confirm talk about it, and you will look like an idiot if you don’t know anything at all! And of course you will lose out to the other students who actually know something

3) It’s a great source of material for compositions and GP essays, because teachers love to see that you have some brains, and is up-to-date with the latest happenings in Singapore

4) See what new benefits that the government is giving out and which do I qualify for :D (which is not much la *sad*)

Well, but even though I missed it, my mummy actually recorded it in school, so I can still view it if I want. And of course, there’s the ever reliable Straits Times. However, reading from the Straits Times is different, doesn’t have the multimedia effects that the television will have!

So I flipped through Straits Times today and saw a short article about the government urging the Malays, especially during this Hari Raya period, to spend within their limits, and not be over extravagant (okay, I added this point myself).

I think this should be an advice to all Singaporeans, people who are getting richer by the minute, and saving less by the second.

With the onslaught of more high end luxury goods shops in Singapore *think ION orchard*, Singaporeans are all lapping it up. Not just those who have disposable incomes of 5 or 6 digit figures, but even layman on the street and also students.

Step into NUS and you will see the ‘richness’ of the students, not only in the forms of intellect, but in material goods as well. Students decked out in LV, Burberry, and Gucci bags are pretty much the norm. Students with cars, or even sports cars, are increasing by the number.

Of course, other students (me included) will be jealous and filled with admiration for people who can afford such things. However, it should be clear that they are not the one who pays for all this. It is (to a large percentage, I believe) their parents who footed the bill, buying bag after bag, car after car.

If the students do rise up and be successful in the future, good for them. But if they do not, are they going to rely on their parents forever? Even if their parents are filthy rich, their inheritance will not last forever with such frivolous lifestyles.

Which is why we should all learn to save.

I don’t get why youngsters are not ashamed at the exorbitant amounts that they spend on luxury goods. If they are from very well-to-do families, and their parents buy such luxury goods for them, I guess that is okay. But if they are from middle or middle-to-low income families, and they demand to buy branded goods, they should jolly well receive a slap from their parents!

But of course, some overly doting parents will just buy, and then suffer during the course of trying to earn back the money.

I feel proud whenever I use my own money to pay for things, because it shows that I’ve been relatively successful in saving. Like for example:

- I was able to set aside 5k when I was in sec 3 to put in some fixed deposit 5 year investment account. Of course under my mummy’s name, because I was not of age at that time
- I bought my own camera for sec 4 prom night
- I bought my own laptop and mp3 player in JC1
- I changed my own RMB currency before going to China with my family, so that I will use my own money to shop
- I bought asus eeepc 901 for my mummy before heading off for Student Exchange Program (SEP)
- I paid for all of my SEP expenses, except for my return airfare from Singapore and also winter clothing that were purchased in Singapore

It is not that my mummy did not want to pay for me. But I just felt accomplished that I could use my own money to get what I want.

And all of which is really my money.

In addition to saving, I also gave my mummy money when I was temporarily working before entering university. About $100 to $200 a month out of my miserly pay, haha.

I’ve saved practically all of the money that relatives have given me throughout my 21 years. Usually they will give an ang pao, and ask me to buy something for myself, but I never did. When I was young, it was because my mummy did not let me spend it. Now that I’m older, I still do not spend it, save for some small treats to pamper myself.

I also do not get much allowance. When I was in Secondary school, I used to get $20 a week. However, I had a bad habit at that time. I’ll not eat at all in school, not even recess! Just so as to save $80 a month! Of course this is definitely not an advisable way to save money.

As an undergraduate student, I am receiving $350 in pocket money which is supposed to cover my monthly expenses including transport. Considering I’m in school most of the time, it may seem like a pretty bleak sum, but I still get by. Because I track down my expenses daily using an excel spreadsheet. It may be tedious, but it is the only way to ensure that I do not overspend.

Other people like to estimate how much they spend, due to their laziness of not recording. However, estimates are not accurate. You may think you spend very little, but when you actually tally up your expenses, you may have spent more than you actually thought you had!

To save, I generally buy pretty cheap stuff. For fashion, it changes every season, and it is costly to keep up with it. Generally, my clothing expenses stand at:

- Clothes: less than $30, typically less than $25
- Bags: less than $40
- Shoes: less than $40, aside from track shoes which are less than $70

Aside from saving, I do try to make my money grow a little. It only grows very little because I like to take low risk. Of course, high risk means high gains, low risk means low gains. When going to banks, I’ll look for principal guaranteed plans were I can invest my money in for a short period of time.

*aiyah, I scared money fly away from me la, so I like principal guaranteed stuff. I am very cautious about my money, and do not think that I will ever invest in stocks or the like, unless I set aside a sum of money in which I’ve to be prepared to lose*

I’ve spread out my money amongst various bank accounts, due to differing interest rates, or different offers which debit cards may offer. I have also 2 insurance plans to my name, as of date. Plus the usual CPF dependents scheme plan.

I pay for the premium of one of my insurance plans each year. It is an insurance-investment plan, where part of the premium goes into investment into funds. Also, I just need to contribute for 15 years, and thereafter, I will be covered for life. The other insurance plan was started by my mummy when I was young, and it has been transferred to me since I turned 21.

I like the feeling that I am well protected by myself. So that my mummy will not need to worry about money should anything *CHOY!* happens to me.

And I am glad that I know at least one friend who also has his own insurance savings plan. At least I’m around sensible people who do think of lessening their parents’ burden.

Of course, I will not say that I’m doing the most to lessen my parents’ burden, as I am still receiving allowance from them, and also did not receive a scholarship so as to get free education in university.

For now, I’m planning to put aside some money in some savings plan account with my mummy. And my current short-term plan is:

To save $100,000 for my wedding and house

Just looking at the sum makes me feel that it is impossible! I’m light years away from it, and I guess the only way to save up so much will be to get a high paying job. Which leads to “I NEED TO STUDY HARD!”

But I think it is a reasonable amount to set aside for wedding, house deposit, and renovations. I estimate it to be around that cost.

And my long-term plan is:

To be financially independent by 35

Meaning to be free of house debt, car debt, whatever debt, by 35. This also seems pretty bleak. I guess a more realistic estimate will be by the age of 40. However, I’ll just state it as less so as to motivate myself to work harder.

I mean, if Adam Khoo can be a millionaire by 25, I am sure my little aim of being financially independent by 35 should not be that unrealistic.

And this ends off my financial planning for now.
When I start working, I’ll then determine the percentage of amounts to save, to give parents, etc.

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