The Stay Home to Work for past 3 months has taught me that it is possible that we do not need to spend money. This sounds simple but it is difficult to execute. You must be thinking that when you work from home, you are using electricity, water, gas and definitely need to eat. Yes, those are necessary expenses to keep things going, what I mean is to minimize your expenditure.
Firstly, all socializing activities and work activities will involve spending money. I like to buy a cup of coffee after lunch and another dose at 4 pm. Currently, with numerous E-commerce platforms, I do not need to travel to Hong Kong to buy books from my favorite authors 龔成 and Starman. E-commerce has made spending money even easier than before! You do not even need to leave your house. (I just bought this book on Google << 5年買樓4部曲 – 龔成 >> while writing this…$27 gone! hahaha)
When I was doing the June review on my household expenses then I realize that when we deliberately take action not to spend money then we can realize how often and where do we spend money on. “Tell me where you spend your money and I’II tell you what your priorities are.” It is important to look closely at where you are spending your money on. When you do not need to spend money, you will be amazed by how much you can save.
Another key reason why you should practice not spending money is to battle consumerism. Rather than live your life by consumerism, why not gain control of your own consumption and understand that satisfaction in life can be achieved through a minimum consumption.
Reflection on your expenses
Before you sleep, try this exercise to recap the day, breaking the day into different time segments when you will spend money. You can deliberately choose to think through how you can stop the unnecessary expenditure during that time segment. You can decide and be responsible not to spend that money.
Why you need this “Spending Lock Down”?
I coin this as Spending Lock Down, install a Spending LockDown day every month and define that day as zero expense day. We can stop the habit of spending money, define them into two categories – spending on the necessity and non-essential stuff. This helps us to understand how our wants will affect our financial situation and appreciate meaning in life is not defined solely by money.
Some of us will realize that we are thinking about money all day long (like myself), they will hesitate before spending money. Some of us will discover that they will buy things on impulse. You can record down on your diary or an app whenever you think of spending money and why you want to buy that particular thing. This will give you insight into your spending habit.
With regards to all the wants and desires, if you can delay spending gratification, you can give each wants and desires a rating to classify them. Explain what benefits will you derive if you buy them. From this system, you can decide which one to go for as all resources are scarce and limited. We have an opportunity cost.
By cutting our expenses will not spiral us to become an overnight millionaire. However, when we deliberately practice this on a long term basis, we will build our confidence level, we gain control over money, we overcome consumerism.
Methods to Eliminate Expenditure
1- Saving can be painless
We can become better at our expenditure. We can find better deals, better savings, or undervalue stuff. We buy things in bulk, especially when there is a discount. This type of saving on expenses is painless but requires effort to find good deals. See below image, we can save $5.60 per can and if you buy 15 cans, you can enjoy a free toy.
2 – Spend after You Save
Change your lifestyle. Shave off some of your lavish lifestyles. Stop impulsive buys. How to stop all these impulsive buys? You can practice sleep on it, wait for one more day before revisiting this item or service and think through whether you really need this.
If you still want to buy this item or service, kindly consider how many hours of your working time is required. For example, if you are a tuition teacher and make S$100/hour. The Coach bag cost S$800, this is equivalent to 8 hours of your life. Are you willing to sacrifice 8 hours of your working/business life for this bag?
There is a practice of cutting all your credit cards and spend using cash only. To a certain extent, this is true but there are benefits of using credit cards if you have discipline. If you bring only cash, you cannot spend beyond what you have in your wallet. Every week, we only have S$50 in our wallet. We often have surplus savings out of S$50 budget to buy books. Assume you spend only S$5 a day at lunch and you can save S$25 which can be used to buy a book (maybe an ebook).
Lastly, avoid all forms of temptations. When you deliberately do not go to a shopping mall or do not look at an advertisement, you will not be tempted to spend. The images and copywriting used on online or offline advertisements are created to make us spend money. The way things are displayed at the shopping mall is to lure us into the shops and open our wallets. See no evil, hear no evil, and spend no money!