Aim to be Debt Free

Debt is the slavery of the free ~ Publilius Syrus

Hooray! It's the weekend again. So I won't bore you with long-winded posts (I'll save that for another time heh). I'll just make this quick.

In a previous post, I mentioned reducing your expense as a means to increase your savings. However, if you have an outstanding debt to pay, please try your best to clear that off as soon as possible. Now I don't mean housing debts that take eons to pay off. What I'm referring to are debts arising from things like credit cards & installment plans for luxury items, like a new iPhone for example, that you bought from furniture and/or gadget shops like Courts or Harvey Norman. The simple reason for this recommendation is that the interest kills! Instead of saving up precious cash to earn your financial freedom, you'd be wasting potential savings putting the money into someone else's pocket. So be smart. Pay it off as fast as possible.

Another alternative strategy is to portion out a sum to save while using the remainder to pay for your debt. To reiterate, I did say that paying yourself 20% of your gross income per month is a good way to earn your financial freedom. But if you've debts to be paid off, perhaps keeping 10% in your savings while using the other 10% as debt payments would be ideal if you'd like some emergency cash in hand. Or you could portion out 5% savings & 15% debt repayments if you're more comfortable or have a larger payment to clear. Either way, discipline is key and with time, your debts will be cleared and you'll be another step closer to financial freedom.

K, have a good weekend & a great Hari Raya Puasa!

Cheers,

~K

The Saving Attitude

"Planting rice is never fun. Bend from morning till set of sun. Cannot stand and cannot sit. Cannot rest for a little bit."

How many of you have heard that nursery jingle before? Well, my parents taught this catchy rhyme to me when I was just a child. And what did I learn from it? That it must be a heck of a lot of work & dreadful business planting rice, that's what! During mealtimes, every mouthful was a reminder by my mother of the hard work put in by farmers to give me this plate of rice. Did I grow up wanting to be a padi farmer? Definitely not! I just wanted to enjoy the fruits of their labour. =)

So, although seemingly out of topic, the point is this. Attitude matters.

You'll notice that when you're having fun, time seems to fly by without any realization but when you're dreading something, work for example, time somehow slows to a crawl. Similarly, when engrossed in a hobby, you'll find that nothing seems like work to you. Heck, you'll even complete more than necessary. But when compared to actual office work for example, how many times have you heard/seen/been in the situation where the bare minimum is all that gets done? Rhetorical question.

Therefore the question of the day is, what is your attitude towards saving money?

If you want to save and hold onto your savings, I'd recommend you start enjoying that you have money in the bank. Not only that. Every time you see this amount increase, even if it's by a couple of cents from the bank interest rates, you should congratulate yourself and look forward to the next increase. Clap your hands, pat your bank, shout out your joy if you feel like it. Such an attitude, though seemingly loony & obsessive at first, will help you grow your savings faster. By reprogramming your mind to enjoy having saved cash, this will lower your impulse to spend by making you think twice as you'll start feeling "heartache" when you do have to spend, thereby ensuring that you only spend on the necessary and not on the luxurious.

Personally, I use a tip I picked up from Blair Singer's Sales Dog Training program to help reinforce my want to save. Every time I reach my goal of an intended saved amount in the bank, I clench my hand into a fist, curl my elbow to 90 degrees, tuck it into my body rather quickly and go "Yes!". I find that helps as my positive reinforcement. On a flipside, don't complain about saving your cash. Don't bitch that you aren't able to buy such & such. That's a surefire way of spending everything you accomplished. Negative reinforcement you see. So think about it, and do whatever works for you too.

Yes!
~K

Save for a Reason

Big goals get big results. No goals gets no results or somebody else's results. ~ Mark Victor Hansen

I can't help but find the above quote extremely true. How many times have I started saving my hard-earned money in the bank only to have it "disappear" due to some "fantastic buy". Other times, they vanish because of a sales pitch that seemed like a once-in-a-lifetime opportunity. That said, after the many years of working and trying to save, the realization that wanting to save is not as important as having a reason to save.

In fact, I had never ever accumulated anything more than $5,000 in my bank ever since I started working. Truth to tell, my savings constantly dwindled to a couple of hundreds and at times, I even had barely enough to get through the month, hoping for my next paycheck so I could pay off my outstanding debts.

Fortunately, as I have a contracted job, I am assured of a paycheck every single month. Many of you however, don't. I, myself, will lose this security in a couple of months when my contract expires. When I realized the impact of this, having an aim in mind truly changed my saving attitude & my attitude towards money. I began planning for my long-term portfolio first as these need much longer time to grow & mature. With this aim, wonders started happening. Only in the last couple of months did I see my bank account grow to more than double that amount. The accumulated amount was recently invested and from what I was told from my consultant, has begun to show slight profits. I am already aiming for my next investment in Jan '10.

So the experience & knowledge that I hope to pass on to you is simply to have an aim if you're intending to save. In every case of saving up some cash, it doesn't matter if the reason is financial freedom (which I hope it is), a new car, your children's education or your anniversary. You have to have a reason so as not to get distracted and to find your way back to the path when you get sidetracked. In our context of achieving financial freedom, setting your aim of perhaps accumulating $10,000, will provide the motivation for you to reduce expenditure & increase your income, two vital components in helping you accumulate your big sum of money faster.

In summary, if you want to save, aim to save and save with an aim.

Cheers,

~K

Increase Your Savings - Pay Yourself First

If you would be wealthy, think of saving as well as getting ~ Benjamin Franklin

On a final note on increasing your savings, the single most important tip would be to pay yourself first. Although this was mentioned previously. I can't stress this enough. Many people usually pay everyone else first (like what was shown in the Profit & Loss statement post) and then save the balance.

What would be smarter to achieve your goals faster & more efficiently is to pay yourself first. Whenever you get your pay or total income, just immediately set aside 10 - 20%, or more if you can afford it, into your savings account. Then pay everyone else with the balance you have left. If you find that you're left with insufficient funds to pay them, then instead of touching your savings account, cut your expenses or increase your income as I explained previously. Do not touch your savings unless it really is an emergency case. Be discipline. Do not be discouraged or impatient at the speed of growth of your savings. This is only setting the foundations in place for more opportunities to emerge. The turtle eventually won the race compared to the hare, remember?

However at the end of the day, it comes down to what you really want. If you wish to be finally financially free or at least have more than pennies in your savings account then please start saving. If you want immediate gratification and have a need to spend lavishly then just know that you risk having pennies in your savings account at the end of the day and after years of working. It's your choice in the end. This is only a blog to share about what I've learnt from the various authors, searches & talks that I attended.

Happy saving and good journeying in your path towards financial freedom.

Till next time,

~K