Tuesday, 31 January 2012

Personal finance 2 - spending habits

I must admit I am not overly qualified to write this, but I would like to share my own personal experience on spending habits and hope that people will also come to realise the importance of good spending habits.

I grew up during the era where there was a silly trend for youngsters to wear branded clothing. I have to put part of blame on my friend back then as he was really a bad influence. Peer pressure got over me. I remembered bringing my father to pay for my Armani clothes and Trussardi jeans. Back then my father was doing pretty well in his businesses and he bought them for me although with much grumbling. He did not really set a good example to me on proper spending habits as well since he was always changing luxury cars and spent lavishly.

When I started out to work, I still had the tendency to go for branded goods, I told myself that the better quality justifies it and it can last longer (I still think they do even now). Over the years I had purchased branded items for belt, watch, shoes, wallet, sunglasses , bags and pen. I grew my earning power gradually over the years and did not contol my spending.

I used to spend 450$ on a pair of shoes, I own a Cartier pen and Prada sunglasses. I even bought myself a Rolex watch in 2006 as my good friend got one too. My spending did not stopped on material items, I even invested in grooming myself by signing up for facial packages which probably could had cost 2 lots of Keppel Corp shares easily.  Although there were no big regrets in spending to pamper myself with the facial packages. ( now wherever I go , auntie or uncles still call me xiao di due to my youthful looks ), I realised that I was spending my money in a very wasteful manner. Luckily I did not end up with any credit card debts like my other friend, he had asked me to be his guarantor for credit loan but I instinctively said no as he could not control his spending.

Things started to change once I got to know my wife, after observing my wife's spending habit and the way she values her money, I felt terribly guilty. I tell myself that I need to be frugal like her. Myself being a Man yet I spent more than her. My journey to achieving positive finance also allowed me to open up my eyes. The needs and wants are clearly defined now once I have a target to reach. There are more important task like saving money for our future house, baby and retirement. Now is not the time to spend, it is time to save and be frugal so that I can enjoy a better life 10 - 20 years on.

Nowadays, I would rather spend money to buy stocks that will generate income/ capital gains than spend money on material things. I still spend to sayang my wife now and then, but I make sure that it is within my budget.

There is a need to cultivate good spending habits from young, we need to set a good example to our children on the way we spend our money, having financial literacy education is also essential, separate the needs and wants while young and understand and appreciate the need to be frugal.

Controlling your spending habits is part of positive personal finance and also related to the journey to financial freedom.

Tips on how to control spending:
1. Set up a budget for monthly expenses
2. Ask yourself if it is a need or want on every purchase
3. Delay spending and spent more time to consider if one should really buy that big purchase items
4. Learn to say NO to sales people
5. Envy and stop there, learn not be influence by peer pressure
6. Cut down on number of credit cards and minimise credit limit
7. Always remind yourself that you do not want to end up old and poor. So start to spend wisely and save!


  1. Hello Guru,

    I think female readers will knock my head, but your case is an interesting case of "role-reversal"?

    Normally it's the wife that spends more than the hubby... LOL!

    Having said that, it's OK to reward ourselves from time to time. It's important to look into the mirror and feel good too!

  2. Hey SMOL,

    Haha but interestingly, the younger male nowadays spent money increasingly on hair treatment, facial and etc., I think it is a matter of time they catch up with female on expenses to maintain their looks.

  3. Hi Guru,

    Ahem, I think I'm not too far off from you in terms of age. :P

    My teenage days were also during the era of JPG, Armani, Versace etc but then I don't have much money and could only buy cheaper alternatives like Ben Hur or imitation from Thailand but I know many of my friends who worked their socks off to buy them.

    Fast forward 10years and I started to pamper myself more, partly because I now earn my keep and also to look good - as one get older, clothes become more important. Although I like nice clothes and stuff, it doesn't mean I am an impulsive shopper. I always compare the price, do my own research, visualize how often I can wear them, how easy it can match my other clothes, life span etc. I can tell you that I'm a fussier shopper than my GF.

    I recently bought a pair of leather boots for $500. It may seem like an exorbitant amount but a good quality pair of leather shoes can last really long, and I intend to wear it for at least ten years. This means $50/year which isn't a bad buy. Of course, this also means proper maintenance which means a little bit more on leather care products and time. It's just like owning a car isn't it? Regular servicing and maintenance will go a long way.

    1. Hi Derek,

      Haha! Your shopping method is very practical and is a good way to follow! Thanks for sharing that! Wow 10 years for a pair of boots, you are even more thrifty than me! I change mine every 3-4 years!

  4. ahhzz :( I spent my money on facial packages too in the past..which could have cost me around 2 lots of capitaland (at current price that is)...hehe :)

    2 lots of keppel corp is a lot!!!!


    1. Hi B,

      Haha, what I dislike about facial is that some of the consultants kept pestering to sign more packages, that was how I ended up spending so much..lucky for you :)

    2. Hi Guru,

      You have an interesting blog that talks about matters that matters to Singaporeans.

      From what I read, I am pretty sure you will be successful in your personal finances when the time comes for retirement. Unfortunately, for most readers, the single most important factor to your success cannot be copied by other readers. You found a good, frugal wife!

    3. Hi Hyom,

      Thanks for the compliment!
      I really hope I will be successful in this journey to financial freedom and see good results in 10-20 Years time :)
      I think there are still frugal women out there in singapore, my wife like the others still have the occassional crave for prada bags. I feel it is important both husband and wife must see eye to eye on personal finance matters and spending habits..

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  7. Distinguishing between needs and wants is very important in breaking bad spending habits.

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