Ah yes, this is another piece of my “money matters” series as I’ve been thinking about money these few weeks.
It has been 4 months since I last got a paycheque (my last job was shucking mussels in Talleys @ Motueka, New Zealand) and I’m glad that I am still somewhat, surviving.
Before I begin, I would like to share some tips for people who are intending to go for a career break, as an afterthought, now that I have returned. Actually, these tips would make sense in all stages of life so maybe it’s worth a read!
1. Do not be in Debt
I have heard of cases and know of some friends who struggle with debt, especially from credit cards and purchases of big-ticket items. Debt is dangerous and it will accumulate like crazy plus if you do not make the repayments on time, you will find that you are paying more interest than the original loan itself. There’s an article + video about the debt problem in South Korea by Channel News Asia and its worth a read/watch if you have time.
One of the most common debt issue youths face today is the repayment of the student loan. For me, I am thankful to be not in debt of my student loan (I did my degree in 3 years without honours as I wanted to save on 1 year of school fees) and I am glad that I have no loans that I need to pay off. Another good (and sad) thing which allowed me to remain debt-free is that I’m asian and it’s very common for us to stay with our parents even after we are capable of earning money. We usually only move out of the house when we are married (or >35 years old) and in my case, I’m still staying at home and not needing to finance any housing loan too. So, I’m kind of debt-free. *phew*
2. Keep a Stash of Money
When I returned home from New Zealand, I accidentally discovered that I left behind a stash of cash (~$1k) which were remnants of my angbao (red packet) money and leftover currency which I did not bring along to NZ. One year ago, I think I left behind this money to use this cash to pay off angbao for the upcoming weddings I had to attend (There were 6 weddings in May & June where I had been invited; all canceled/postponed due to COVID-19). Since they are now delayed, I use this cash as part of a secret stash which will not contribute to my monthly P&L balance when I do my financials every month. However, as I am pretty much a cash-less person, I only get to use cash when I’m buying food (in places that do not accept credit card), so this secret stash is useful and not so useful. Anyway, it is always good to have some contingency cash lying around as a ‘surprise’ as you’ll never know when you will need it!
3. Ensure that you have 6 months worth of living expenses
In the days of uncertainty, having savings is rather important. With the bleak economic outlook, I have no idea how long it will take for me to get a job, and even if you’re employed now, you may be fearful of losing your job via retrenchment or worse, company shutting down. I did a rough calculation and I realised I should be able to survive with $500-600/month, given that I do not have to pay for rent. I do contribute slightly to the household groceries and food, though I am unsure if it is a fair estimate. In the past 11 weeks, my expenses are about $1.1k (this includes a painful $200 traffic fine) but I had 2 weeks of ‘stay at home’ where I almost didn’t spend a single cent. Well, with that being said, I will (and should) always have $3-5k cash on hand; to tide me through anything.
Okay, let me get back to the main point of this article.
How I cut down on my expenses
Control my urge to Online Shop
If you know me personally, you would remember that I will have a parcel from TaoBao, GMarket almost every month. I spend so much time online shopping every night and there’s always something to buy, something I thought I may need and something that I thought I didn’t have. Over the years, I’ve accumulated a lot of trash, from hoarding 1 year supply of BB Cushion, 1 year supply of facial mask, 1 year supply of eyebrow pencil, a lifetime supply of notebooks, colourful markers that I never needed, Deco Tapes that I use once in a blue moon and clothes that I thought I would wear.
During these three months, the number of items I’ve bought online is perhaps 5% of what I usually buy. Most purchases are done via Shopee and so far I’ve bought mainly baking equipment (electronic weighing scale, 1 baking pan, flour sieve), 1 wireless mouse (cause mine was faulty), shampoo and conditioner, tea from taiwan and a clothing rack) etc. I’m pretty proud of my low spending in online shopping but it is not easy. I have about 30+ items in my shopping cart(s) and every time when I am tempted to buy something, I tell myself to wait for one week before deciding again. Most of the time, I will end up dropping the urge to purchase. There’s a pair of earrings I told myself I will purchase if I get a job and there’s a Nintendo Switch which I’m resisting because it seems like an impulsive buy. It’s not easy but if I manage to do this long term, I know I will be saving at least $200/month cause I really do shop excessively in the past.
Cutting down on coffee and desserts
When I was in NZ, I always have a joke with my friend on how we are so anal about $0.50 increase in the cost of avocados/vegetables when we grocery shop every week; but we never bat an eyelid when it comes to paying $4-5 for that cup of latte. I love fresh coffee. I love the smell of coffee beans in a cafe. I love the taste of coffee when I’m drinking it when I’m out – be it at a cafe, at a farmers’ market or anywhere else, as long as it uses freshly ground beans which come wth hot froth milk.
But now, the coffee life is over. The ice cream life is over. The dessert indulgence is over. Since I’m back, I think I only drank expensive coffee twice, at a friend’s cafe as an attempt to support her business. I’ve only bought ice cream once, being tempted after assisting my cousin with a delivery. Well, I didn’t give it all up completely as I now replace my coffee cravings with 2-in-1 powder coffee, Essenso Coffee by Super.
I love the coffee so much that I brought 50 sachets over to New Zealand and ration it across the months. It is not as good as the real deal but it does give off a strong coffee aroma. My dessert cravings were managed by my own bakes, though they fail half the time. To date, I have baked cookies, brownie, banana cake and many more. Sometimes, I feel like I don’t exactly love baking but I’m just doing it as a means to past time and to pop that sweet treat in my mouth.
Before COVID-19, I do frequent cafes often to meet up with my friends and I am often guilty of buying after lunch $4-5 coffee or bubble tea. It is a habit of many years and I might not be quitting on it (if my financial situation allows for) because the happiness I can derive from a good cup of coffee is still kind of priceless. If $4 can make me feel better, even for that short 20 mins, it is still a worthwhile purchase 😉 but till then, I’m gonna sip on my aromatic powder coffee.
Delaying big-ticket purchases
There are many things that I kind of need (in time to come) but.. I’ll drag it on. This June, my iPhone will reach 2 years of lifespan (its lagness has been annoying the shit out of me in recent three months) and usually, I replace my iPhone every 2 years. This is because in my country, you can purchase a discounted mobile phone with a 2-year contract. In return for committing a monthly payment of about $30-40/month to my Telco provider over the span of 24 months, you will be entitled to purchase the iPhone at a price of about $300-400 cheaper than retail. However, this time round I am saying ‘no’ to a new phone and I am porting over to a cheaper mobile plan. It’s funny how there’s inflation but some things just get cheaper due to fierce competition. Airline prices pre-COVID19 and mobile subscription services are some of them.
Apart from my mobile phone, my 23-inch touch screen HP All-in-One Desktop might be reaching its final stage of life soon. It is currently 7 years old and I can see that the system is slowly breaking down (probably due to old age and the increasing stress from my multi-tasking). With the increase in the amount of time I spend at home, my computer is working twice as hard and now it struggles when I have Chrome + Photoshop + Spotify on at the same time. I’m really praying that it can last many for many more years.. I bought this computer when I received my first ‘bonus’ payout so it does have a bit of sentimental value for me. Same case for my MacBook. Bought it in 2014 and it is still pretty functional, except that the 128gb storage size does not make sense anymore. Anyway, I just hope that it lasts as I still need it for my overseas travel. I just hope that apple lives up to its reputation of being unbreakable (my iPhone 3GS is still working as an mp3 player).
No Travel Plans for 2020
Now that I’m reflecting upon my spending, I noticed that the biggest expense for me is ‘Traveling’. This is the list of vacations I had and you can see that it increased significantly since I started working. When I was still in university, I could only go on 1-2 trips a year (like duh!) but the moment I started working, the access to money made traveling become a breeze. I love to travel but I got to admit that I do get irrational with spending (especially on food) when I travel. With no light to the end of the tunnel for the COVID-19 vaccine, it seems like I can save a few thousand of dollars by not traveling this year. Germany, Okinawa and Seoul were on the cards this year but I guess I’ll have to wait till does-god-even-know-when?
I hope you find my tips useful (though I think most of them can only be relevant to people in certain life stages) and if you have any other tips for me, feel free to share 🙂