Master your Money

Money is emotional, not mathematical

Before we continue this journey on how you can achieve financial freedom through the mastery of money, we need to answer the following questions:

  1. How often do you argue with your spouse over money?
  2. Do you know exactly how much money you spent in the last week? What did you spend on?
  3. How much money do you save each month?
  4. What percent of your income do you save?
  5. What will you do with the money you save?

My friends often tell me the following:

“I cannot tell you what I bought last week. It is a too tedious task.”

“We have more than S$30,000 in credit card debt.”

“Everyone buys on credit.”

“I do not have any savings. I do not even have enough to pay my bills.”

Does all these sound familiar to you too? If yes, you know your debt level is high and you are overspending and not saving enough for the future. Now is the time to think and ask WHY?


Thanks to the online ads, re-targeting ads and media, you are bombarded by media messages suggesting to be successful means you need to have a certain lifestyle. We embrace lifestyle which we cannot afford. We must wear the right brand, drive the most expensive cars, crying for attention from your friends. Trying to impress those who does not care about you. This is effect of consumerism.  Today people spend money because they want to keep up with others, fear of missing out. They spend impulsively to feel better about themselves.

A lack of respect for money coupled with poor financial management will not allow them to retire at the age of 65 years old.


This can control people making them slaves to credit card companies, lending institutions and banks through compound interest. Compounding is a very powerful tool. Here compounding works against credit card slaves.

By adding an interest payment to outstanding amount, if you cannot keep up with this debt, you will be taking one step forward and two steps backwards, paying the interest and rolling more debts to the next month. Without a system to get out of this enslavement, keeps the modern slaves forever chained to credit card institutions. Debt is not normal, you do not need to have debt, it is time to be free!

We aim to inspire and motivate you to see that it is easy to solve your financial problems. First step is to identify negative habits and behaviours. Second step is to destroy negative habits. The secret to successful money management is understanding that money is emotional and you need a system in place to control it.

Emotions of Money

Principle 1 – Spending is emotional

How does spending money make me feel?

Impulsive – Many people are trapped in an impulsive mentality which prevents them from keeping money for any length of time.

Economic Hardship – Experiencing a financial disaster that will affect emotions

Daily expenses – Those who are frugal but have heavy debts will find it emotionally draining to make ends meet.

Understanding that spending is emotional is the first step towards financial control and key to true contentment and happiness. You can be in control and it is extremely satisfying when you master this.

Track your Expenses

Principle 2 – When you track money, you control it.

Some of us will blame our employers or others , and think you are in this financial situation because you are not making enough money. Wealth is defined as the amount you manage to save at the end of the month and not how much you earn as a pay check.

Tracking your money creates a sense of awareness which helps to lead you to the emotional reason you spend money in first place.  The awareness also helps to have control over your emotions. You can use traditional spreadsheet to track or you can use mobile apps.

On a traditional spreadsheet for expense, Step 1 write in your gross monthly income, less CPF and tax contribution is your net spendable monthly income.  Step 2, create categories for spending such as groceries, car, payments, entertainment and so on. Step 3, once you have determined how you spend your money over last 12 months, total the expenses for each categories and divide by 12 to determine the average monthly expenses. You may decide whether you are spending too much in particular categories.  Tracking helps you to see how and where you spend money and help you to see if you are spending more money than you actually bring home.

Now you can try to track all your income and expenses for one week, including your cash level. Don’t wait to start this exercise, you will be amazed by what you learn from this. You can contact me to help you understand your spending habits. I can help you to identify where you are wasting money and what is going on in your financial life.

Principle 3 – Saving is delayed spending

This is the concept of delay instant gratifications, there was a study done on children who are able to delay instant gratification will grow up to be more successful than their peers. I can relate to the fact that by delaying your spending, saving the money will naturally lead you to having more money. Then you need to focus on what you can do with the money in the future and not consume more money with the larger amount of savings. Do not give in to the consumerism society and succumb to buying more stuff which you do not need.

You need to sacrifice on something and prioritize your money on what you can have in the future. For example, if a man wants to bring his wife and children to eat out once a week is an important family activity, then he needs to reduce his entertainment and food expenses elsewhere to spend on eating out. There is opportunity cost in every resources. You cannot believe that you can eat out every week and spend money on new clothes as well, there will be no way to pay for both. This will just be a habit to overspend and will not put extra money to work harder for you.

You can segregate your spendable income into three categories: Emergency, Emotional and Long Term Investments. Everyone should save 10 percent of his gross income throughout his life. If you have not started this, I will suggest to start with a lower percent such as 1 percent. Anyone can save 1 percent. When they track their expenses and learn how to control it, they can learn to save money.

If a typical graduate makes a gross annual income of $30,000. Saving 1 percent will be $25 per month which is absolutely do able. After you have commit to the 1 percent, break down into 60/20/20 rule: 20 percent for emergencies, 20 percent for emotional needs, and 60 percent for long term investments.

For example, Eugene and Esther have a combined gross monthly income of $6,000. After tracking their expenditure, they find an extra $60 a month (just 1 percent of gross monthly income) that they can use for delayed spending. They can do the following:

Emergency Spending – Deposit $12 per month into a low-risk fund

Emotional Spending – Deposit $12 per month into any type of savings or investment account

Long-term Investment – Deposit $36 per month into any long term retirement account.

As their money grow in each of these savings categories, their confidence will grow and their ability to manage and save will increase as well. Then they can increase from 1 percent to 2 percent and then 10 percent.

Have you ever had the following conversations with yourself?

” I work hard for my money and I owe myself this new bag!”

” I never spend money on myself, I am always spending money on the children. I want to buy this new watch for myself and I am getting it now!”

By setting aside money for emotional spending eliminates reckless spending of the money that has been set aside for daily expense or long term investment. This will control debt. For those who do not overspend but constantly deprives yourself and family members of things that build lasting family memories, emotional spending is a must. Personally I set aside $4,000 per year to bring the family back to Hong Kong  to visit my in-laws. I will set aside dinner budget for family dinner with my parents in Singapore. Our parents are getting old and time spent together are the most precious memories. Learn how to spend emotionally.

Emergency spending will come. Due to illness, accidents, job layoffs and technology advancement, you may experience economic hardships in your life. You must learn to balance your spending and provide money to build up for emergency spending so that you will not be blindsided when situation happens. It can be very stressful to you and the family! It is advised to have at least six months of spendable income to cater for emergency situations.

Learn to live on 90 percent of your income and save for long term spending. Our bodies will start to grow old and ability to make money slowly decrease. We will need money in the future when one day we can no longer work to earn an income or there is no available job for us. This calls for putting aside money into the long-term investment. A part of all you earn is yours to keep.

Do the following exercise:

  1. Track your income and expenses, scrutinize your spending categories.
  2. Start with 1 percent of your monthly income and do the 60/20/20 into long term investment, emotional spending and emergency fund.
  3. Set up automatic system to transfer money into these account before you can spend them.

The following is a statement by A.F Bannerman:

“Your savings, believe it or not, affect the way you stand, the way you walk, the tone of your voice – in short, your physical well-being and self confidence. A man without savings is always running. He must take the first job offered. He sits nervously on life’s chairs because any small emergency throws him into the hands of others.

Without savings, a man is often fearful of the present and the future. Being in a constant fear is a horrible place in which to live.  A man with savings can walk tall. He may appraise opportunities in a relaxed way, having time for judicious estimates and intelligent decisions. He need not be rushed by life’s problems or economic necessity.

A man with savings can afford to resign from his work, if his principles so dictate. A man who can afford to change his work is much more valuable. He can afford to give his company the benefits of his most candid judgments.

A man always concerned about the immediate necessities, such as food, rent, school and medical needs, cannot afford to think in long-range career goals.

A man with savings can afford the wonderful privilege of being generous in family or other emergencies. Emergencies become opportunities for service; they help shape personality and develop character.

Schools do not teach thrift. Schools do not teach work habits. However, a man with savings can teach his children by example how to have a more successful and worry-free life

The ability to save has nothing to do with the size of a man’s income. Many high income people spend it all and are forever on a treadmill, always working – never able to rest. Many years ago, the dean of American banks, J. P. Morgan, advised a young broker, ” Take waste out of your spending, and you will drive the haste out of your life.”

If you don’t need money for college, a home, or retirement, then save for your self confidence and you can take a level stare from eyes of any man, whether he be friend or stranger. Start paying yourself regularly, because the state of your savings does have a lot to do with how tall you and how relaxed you walk.”


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