Posts tagged ‘personal finance’

January 7, 2011

It’s the Hols! Day 13 (New Year Edition)

4 resolutions for the year 2011:

  1. Save $400 a month till early Oct 2011 – up from previous goal of $300 a month.
  2. Donate 10% of active income to a charity.
  3. Train Active Listening skill – achieve Patience and Recall goals.
  4. Reduce BMI to 22 – 65.8kg

Goal 1 – Save $400 monthly

With the year’s budget collated in this week, I see that my $300 dollar savings goal is mostly achievable (except for that period in Nov 2010). This year I am going to up the ante – $400 out of my $1000 stipend is to go into savings. I aim to achieve the $100 difference by introducing the following changes in my life:

  • Eliminate all consumption of flavored drinks except when paid for with Daily$ (my credit card’s reward programme).
  • Bring lunch to school at least once a week.
  • Reduce utility consumption by switching off the computer by 10.30pm, i.e. I should sleep earlier now.
  • Reduce cable consumption by claiming channels with points.

Yes, life is going to be awfully boring for the next few months. The increase of $100 though is meant for…

Goal 2 – Donate 10% ($100) to A charity

I “earn” $1000 a month through my student bond with WDA. 10% of that = $100. If Rockefeller can donate 10% of his salary to charity, so can I. The only question left is which charity to donate to, and how to donate it. I favor children charities, although charities dealing with the environment or rehabilitation of convicts are favorable in my books as well; If anyone has a charity to suggest, you know who to call….

Goal 3 – Train Active Listening – Patience & Recall

I spent part of the past week soliciting feedback from a few people. The result is largely anecdotal rather than statistically conclusive, but the result is that I tend to come off as largely overbearing and confrontational in my dealings.

For those wondering, yes, it hurts to be critiqued. But I can do a lot worse than honest feedback.

To prove that this leopard can indeed change his shorts, I worked out some personal guidelines to follow in the year.

  • When listening, tilt head at approx 3-5 degrees. (Trigger point)
  • When a query comes into my head, note down on pad rather than blurting. (Recall)
  • Mentally count 2 seconds after a speaker finishes. (Patience)
  • Rephrase conversation in mind as list of bullet-ed points, refresh and confirm with speaker at appropriate times. (Recall)
  • At end of conversation, confirm actionable items with speaker. (Recall)

For those wondering, yes I dislike vague/generalized resolutions. The steps above are a series of “ritualized” actions, a reminder to myself if you will, to perform certain actions, much like how I trained my eyes to open/close individually.

(That reflex, by the way, is still imperfect, so no live demonstrations.)

Goal 4 – Reduce BMI to 22

My present body weight is 68.5kg, height 1.73m, rounded off to nearest “nice” value. That gives me a BMI of 22.9 kg/m2. After verifying via the Heath Promotion Board’s circular (vaguely recalled the changes in BMI ranges from a newspaper article a few years back), I am barely within the safe limit.

The new goal is another “nice” value: 22 kg/m2. That gives me a target weight of 65.8kg. Well either that or I better start growing taller.

Things to change:

  • No using of escalators/lifts for heights less than 4 floors.
  • Walk home from Kovan rather than take the shuttle from Serangoon.
  • Review efforts in April 2011.

References

StudyGS article on active listening: Click here.

Buzzle.com Effective Listening: Click here.

Health Promotion Board on BMI ranges: Click here.

December 26, 2010

It’s the Hols! Day 6, 7 (Xmas and Boxing Day Edition)

So what did I do for Xmas? I counted money.

To be exact, I finished tabulating my expenditure for the year 2010 (up to Nov) with the recent arrival of my utility bill for Nov. A summary below with nice colorful graphs:

For those who want to use my template for their own expenditure monitoring, below is the link to a preview/download page.

Expenditure sheet for 2011: Preview (Google Docs)

Note: I have to apologize for the messy layout. This spreadsheet kind of grew organically; I tend to tag on new stuff as I discover I needed them from month to month.

The quick Summary

I want to acknowledge the fact that the money I spent monthly is unrealistically low for most people. Why?

First, I do not have to spend money on rental or mortgage for the roof over my head. That will easily double to triple my monthly expenditure.

Second, a third to half my meals are eaten at home, and I often bring leftover food to work/school for lunch as well. Again, this can easily double to triple my monthly expenditure, especially if you work in the city area where food is alot more expensive.

With that said, I do firmly believe that it is possible to spend less than $1,500 if you plan ahead and commit to being frugal.

“Analysis” of my Year’s expenditure (TL;DR section)

I started monitoring my expenditures in Mar 2010. The number in Feb’s Savings column represents my total “emergency” fund, or monies that I keep on hand to deal with those hiccups that crop up in life.

My work as a contract teacher earned about $2900 a month, which dropped to $2400 once I deduct my CPF contribution. As you can see from the picture above, slightly more than half my paycheck went straight into savings, mainly because I wanted to fatten my fund till it hit $20,000 (my original target).

In June I left the job and went on a trip to visit some family in San Diego, which explains the $940 deficit in the month of Jul.

Starting Aug, I embarked upon the SPUR programme with Digipen, which paid a monthly stipend of $1000. Expenditure from Aug onwards contracted sharply as well.

By the end of Nov I have saved a total of $14,000 in my “emergency” fund.

In conclusion, I have failed to meet my $20,000 savings mark. Mostly this is due to the loss of income from Jun onwards. However, I am happy with my monthly saving rate.

On a side note, average figures at the end of the summary are on the “optimistic” side because there were no figures for Jan/Feb expenditure.

The year ahead – 2011

For this coming year I doubt I can make the $20,000 savings mark again – $400 saved a month for 12 months = $4800 saved + $14,000 original = $18,800.

What I can do is to push my monthly savings to $400 on average. The extra $100 in savings will go towards some long term goal that I will decide by New Year’s Eve.

June 8, 2008

开源节流: My Reply

This is a reply to realsingaporedollar’s blog post on personal finance in 开源节流.

Let’s look deeper into realsingaporedollar’s post. In it he takes a potshot at financial education books, describing them as being overly focused on developing returns on capital, i.e. investing your savings and loose cash to make it work for you. Those same books, he argues, ignores the returns on labor, i.e. your salary or how much money you make as you do work for others. To sum up his post,

“Earn more, so you can save more”

At this point you should be expecting me to blast realsingaporedollar for his one-sided criticisms on those financial “bibles”. Here’s some shocking news: He’s not wrong. Well, not totally.

Statistics Singapore conducts a study every 5 years called the Household Expenditure Survey (HES) and produces a report of their findings at the end of the study. The report does a complete breakdown of per-capita income organized along several categories, e.g. earning power, occupation, and residence type etc. Using data from HES 1998-2003 (the next report is not due till 2010), the most striking thing to note is that regardless which strata of society they fall in, all residents in Singapore derive most of their capital from their labor, i.e. they actually work to earn their money. You can download the full report here.

However, my biggest beef with his argument is not with the overarching argument, but that the article subtly implies that people do not earn sufficient money to set aside for their future. Let me quote the section on household income.

The average income as of 2003 is almost $5,000, which I feel is a very large sum. Even if I were to take the third quintile as the mean, that amounts to almost $3,500, which is still a comfortable sum in 2003.

Using the same study, we also have a breakdown on spending habits. These are the goods that the lowest quintile of society enjoy:-

  • 61% own an audio or video cd player

  • 17% have cable tv subscriptions

  • 42% have air conditioners

This does not sound like people that are living on the brink of poverty. Almost half of them own air conditioners, which is by any measure, a luxury good and not a living essential.

I had the good fortune to attend a financial seminar organized by Channelnewsasia in Mar 2008 with speakers from the many different fields of insurance, credit and life planning, including both industry experts as well as community non-profit leaders. The talk that had the most impact on me was that by Mr Kuo How Nam from Credit Counselling Singapore, a non-profit group that seeks to help Singaporeans recover from serious debt problems.

His message is simple: the 3 most common mistakes that people make with their money:

  1. They overspend and live beyond their means.

  2. They do not save, or worse, borrow trouble by liberally using credit cards..

  3. They fail to see beyond today.

All 3 problems lie with the “capital” side of the equation. Even if an average person stays with his present job and salary, so long as he diligently builds up his nest egg he should be able to save enough to be financially free. The question is whether he sets aside enough, and uses it sufficiently to prepare for that future.

Relevant links:

You can request this article from me by dropping a comment here. This printer-friendly article comes with graphs taken from HES 2003, all presented in an easy to read format for people who prefer to read on the go.