Most of us dream of crawling out of the month-to-month ngam-ngam spending. Why is it that no matter the amount of bonus or increase in pay…we still struggle to create wealth for ourselves?
“Alamak! Overspent my limit, can’t spend money until payday end of this week!” 🎁🛍🎄
A lot of people think living like this is normal. And you know what? They’re right. Too many of us cash out the amount that’s been cashed in. Infact, sometimes we cash out MORE than what we cash in.
Although we agree with the idea of saving, it’s hard to do so when you live paycheck to paycheck. And the only ‘saving’ we actually do is for that end of year vacay or END OF YEAR SALE. Then poof, it’s all gone again.
In spite of having a very limited amount of money available to spend each month, it is possible to put aside some money for the future. Really?
So…how do we do that?
It says that our expenses will always rise to match our income. We will always have extra needs and wants and ends up bringing our expenses on par with our income. ⚖️
‘Besar periuk besarlah keraknya’ – a Malay Proverb which literally translates to ‘The bigger the pot, the bigger the crust’. 🤔
For example ; You know how your belongings suddenly ‘expand’ to fill all the storage space you have available. You’ve know this — you move into a bigger apartment and, at first, you have lots of space available. Next thing you know, every corner is occupied by a piece of furniture, books, sports equipment, knick-knacks, tiny humans etc. 👕🥾🧩🔮📦
This happens in our finances too.
Ever wondered no matter how much you make, your expenses keep increasing? Your needs expands so you spend all of the money you have available.
Every month you tell yourself that you’re gonna save 10% of your paycheck; but, all sorts of things “come up”– a sale, a gift you have to get for a friend, a treat-yourself massage– as a result, by the end of the month all of the money is gone.
In order to create wealth, we need to break ourselves out of this cycle by setting financial limits. ⛔️
Reduce Expenses – Create a wedge between your income and expenses – your savings. Lock your expenses down to a definite percentage of your income then save or invest the rest!
Set Money Limits – When you earn more, your needs become more. This is how you end up spending more. Set a limit to how much you should spend every month, this lets you save/invest more instead.
Live Beyond Means – If you are ballin’, taking up loans and swiping your credit cards you won’t be able to save money. Infact, you end up losing more. This is age old advice, but SPEND LESS THAN YOU EARN.
Start having a back up plan (emergency fund) of 6 months of your salary saved in liquid funds. Draw out a budget, live a lifestyle that suits in to that budget. Not the other way round.
Anticipate additional income – Got bonus? Windfall? Increment? Don’t blow it off. Plan how you will spend it, use a bit for that fancy dinner or new shoes, but shove the rest into your savings or invest it — let it grow!
Create a savings routine and automate savings – Cultivate/start a savings habit. It’s 2020 and you still don’t have a tabung? Whaaaat. Start now. If managing it is too much of a hassle or you tend to forget, automate it. Put a percentage of your income into an account that you don’t touch.
So how have you been doing, financially?
It’s never too late to review your financial habits. Whether you’re a believer of resolutions and a fresh start, 2021 is the year you start being kickass with your finances! Here’s to creating wealth 💪
HeyAlfred helps you start off by tracking, budgeting AND saving your money, so you make the most out of it. You can even chat with your own finance butler to gain insights into your money habits. Download today! 😉