Post is an idea from Icha Felicielo
I was kinda snorting when I saw Icha asked for a financial tips from me. Seriously, from me. A girl who never had money saving until she turned 25. I used to be that girl who lives only for today.
But if I must write something about financial plan then let me tell you the most important secret of the universe:
NEVER SPEND MORE THAN YOU MAKE
So it’s not that secretive afterall and also not the genius one. Just don’t spend more than you make. It’s as simple as that. Never think that more money will make you happy and more money will make your wish come true. That’s bullshit. More money will just make you want more and thus you’d become unhappy.
Honestly, I’m being underpaid in Singapore market. But well, I can’t complain. I have freedom on my workplace. I could do whatever I want as long as I got my work done. I want to have a better job someday but right now I’m settling with this for a while.
Anyhow, just like I told you, no matter how much money you make, it will never be enough. My first salary as a teacher was Rp. 1.200.000 which equals to FREAKING S$140!!! Geez, come to think of it, how did I even survive? But you know what? I did survive! And I still could go out and hang out with friends, sent money to my mom and went traveling to Yogyakarta! Oh those good ol times…
So I guess Icha is right, I’m one hell of financial planner! Hahaha
Now I’m in a better place. I won’t complain. I could afford a trip to Europe for a month and eat sushi whenever I want and having a 4G internet connection! (hail!) And the most important thing, I do support my parents. :)
And you won’t believe if I told you I was just a mediocre student with no sparkly GPA or even science degree. I just happened to be fearless, almost stupid, really.
I’m not bragging. I can’t afford Gucci bag or a car in Singapore but my standard of living a happy life is pretty low. LOLOL. So yeah, I’m pretty happy with what I have now. So if you think I could give you financial tips to buy Gucci bag every month, this is not your place.
Soooooooo, that’s enough for the talkative prologue, here is my secret formula of my financial plan…
For every 100% of my monthly salary, here’s how I spent it:
I have two bank accounts. One is for number 1 to number 6 (from rent to entertainment), investment and family. The other one is for the “forgotten salary” which is the 10% from my salary that is being transferred every month. I call it the “forgotten salary” because I HAVE TO FORGET ABOUT THEM. I don’t think they exist until….
I have to go traveling. YES. Basically it’s my Travel funds. :) LOLOL.
No, no, seriously. I do have saving in one account that I never touch (unless for traveling). 55% of my salary will be spent for living. For rent, electricity, mobile phone, transport, food, watching movies, buying books or going to craft shop. Groceries budget is for my food supplies and my toiletries supply, basically everything I bought from supermarket. 12% is sent home to my parents, sometimes if they needed something extra, I would pull out some from the saving account, but never from the “forgotten salary”. Only 23% is spent for the future, the investment.
What is my investment?
Bandi and I had invested in gold (in a small amount of course) and then when he proposed, we started to shift this investment money to our wedding funds. So no investment for the last one year. But we always reminded each other that our wedding fund is indeed an investment too because we invest memory, we invest HAPPY MEMORY. :)
Now that the wedding day is near, we shifted the investment money to… a house installment. Yes. we bought our first house. It’s a very very very very very very small apartment unit on the edge of Jakarta. It’s small but we think it’s the right thing to do. And yes, we will pay the mortgage until the next 10 years? LOL.
How to make sure you’re on the budget?
For me, it’s very easy. I have an iphone app for it. The app’s name is MONEY. There are a lot of apps for budgeting but I settled myself with this app three years ago. Yes. I have OCD. I actually use budgeting app daily. And it’s been three years since I started using this app and my financial life has been improving. Haha!
If you’re not an OCD or if you think I’m a freak, then you don’t need to have one, as long as you live the rule I told you before, DON’T SPEND MORE THAN YOU MAKE.
How much is enough?
If you think “I don’t have enough money to have saving, then YOU’RE WRONG. Everybody always have enough money for saving. Even it’s just $10 per month, it is still a saving. It’s not about how much, it’s about bringing the habit to you. Start small, it won’t make you suffer or anything.
In the end, it’s not HOW MUCH you make, but HOW MUCH YOU THINK IS ENOUGH. If you keep telling yourself your money is not enough, then it is not. But if you tell yourself it is enough, then it is. I’m not ambitious with money. Those ambitious people who read this (including Bandi) would probably think this is bullshit. They always want more money. But I have my own belief. More money doesn’t always mean you’re happier. (Trust me, I see a looottt of rich people depressed and unhappy here.)
JUST DON’T SPEND MORE THAN YOU CAN AFFORD. That’s the MUST REMEMBER sentence. If you only have $100 cap for spending it with your friends, then DON’T hang out everyday. Hang out only on weekend or hang out at your home. Buying $3 beers from supermarket and hang out at your home playing playstation. You don’t have to be ALWAYS OUT and eat in the overpriced cafe.
and remember this: DO NOT SPEND THE MONEY YOU DON’T HAVE! A.k.a Credit Card. This is so wrong!!! I do have credit card, but it’s only for certain purposes such as paying for Agoda, Playstation Network, Paypal and the other online stuffs that have better bargain with credit card. But I ALWAYS pay straightaway. Seriously, NEVER GET SUCKED INTO THE DEBT HOLE. NEVER!!!
DO NOT SAVE YOUR SILLY PRIDE just because you have to hang out with friend in the overpriced cafe, in the restaurant you can’t afford or buying overpriced bags, but end up not buying your dream house or not going travel. Always always always put your priority straight and everything will be easier. One’s financial plan wouldn’t be fit for other’s financial plan. “Needs” and “Wants” are relative in terms of money.
Let me give you some example. I seldom shop. I don’t remember when the last time I shopped (oh wait, I do, I shopped for autumn clothes for the Eurotrip). So I never put shopping on my budget (see the pie chart above), but I put “eating out” (hanging with friends) and “entertainment” into 2 different need. These things are equally important to me as paying rent. My hobby is included paying for crafty/artsy stuffs from Art Friend store, buying nail polishes or buying books online.
For some people who loves buying clothes or bags, this budget is so stupid, thus you may combine this 4% + 5% and VOILA! 9% of your salary will be spent to buy new bag! But of course if you spent the whole 9% for a bag, YOU CANNOT GO HANG OUT in the cafe, ok!
AGAIN, IT’S ABOUT PRIORITY. Remember I posted this?
So to answer Icha’s question of how on earth I could afford a trip to Europe and live in Singapore… is because I saved money more than I shopped. My dream to go to Europe is stronger than anything so I HAD TO save money. And if you knew me in person, you’d know that it wasn’t easy for me. But I guess people grow up eventually. I picked up the “saving habit” from that European dream. Until now I still carry on that habit. :)
Okay, I have to stop preaching because I feel so silly now. I’m in no position to talk about financial planning when everything I do now was taught by Bandi. Before there was him, I didn’t know there was a thing called “saving” or “budget” LOLOLOL.
But always remember this… Never put money as your goal in life. It is just a tool we use in our life, but remember you can’t eat money, you can’t also marry money or cuddle money at night when you feel lonely. Yes, it can buy you a comfy bed but money won’t be the one who comforts you when you’re sad. :) I hope you see the point.