Most of us are quick to allocate blame to our salaries – that we don’t make enough, or that the high cost of living that is strangling us. But...

Most of us are quick to allocate blame to our salaries – that we don’t make enough, or that the high cost of living that is strangling us. But…


With the sudden surge in your bank account balance, the world became visibly more colourful. Over the next 10 days, you would enact the lavish life of a royalty. You couldn’t grasp what had previously formed as the barrier between you and the Louis Vuitton purse. Sure, you had forced yourself to turn away a couple of times. But it is different today, for some reason, you feel more powerful.

Fast forward to 2 weeks later, you find yourself standing in a 7/11 store. You had spent the past 15 minutes mentally debating the flavor of instant noodles you like better. Curry, you decided.

You proceed to the cashier, and you reached for the last 10 dollar note in your new purse…

What Happened?

Most of us are quick to allocate blame to our salaries – that we don’t make enough, or that the high cost of living that is strangling us. While that may most certainly be a factor, they probably don’t contribute the full extent of the problem. It is wiser to look at how we impact the problem, because pointing fingers at how the environment is certainly won’t get us anywhere.

While you most certainly are capable of understanding that you shouldn’t be spending more than you earn, it is a theory that is hard to put in practice. It is hardly possible to pace your how you spend your money when you lose track of your expenses.

The use of credit cards is another prime culprit. When you charge all your expenses to the credit card, it misses out on giving you the perception that money is spent. When you don’t lose a dollar in your wallet, it is easy to forget that your bank balance suffered a dip. That is, until the statement arrives.

Bad spending habits will potentially lead to debts. Once you accumulate enough of them, you need to pay significant amounts in interests. These are money which could have been otherwise used for other purposes. Once you get into this vicious cycle, it is not easy to get out.

Set Short-term Goals

Don’t get preoccupied with planning long-term goals that you forget what is in front of you. Remember the savings you accumulate everyday directly contributes to your long-term financial objectives. Set a target that you can accomplish today, and then you can move to bigger things.


Logical Budgets

You reject having another coffee break in Starbucks, and convinced yourself that you have saved money. And then when temptation overrides you, you splurge big money on luxury items.

Be logical when you set budgets. Allocate a portion of your salary for entertainment and luxury expenses. If you don’t use them, they can snowball with the portion in subsequent months. The best way to stay in control of your temptations is to acknowledge and take reasonable steps to fulfill them.

Smart Use of Credit Cards

Credit cards are double-edged swords; use them for the right reasons. Most cards offer rewards programs that feature discounts that you can take advantage of. In the long run, they can translate to a fairly large amount of savings.

If there is no particular advantage to use a card, don’t. If you have cash, it is always better to utilize them instead. If you don’t want to actually pay for a particular purchase today, chances are you are not going to want to pay it tomorrow.

When you charge an amount on your credit card, set aside the same amount in cash on the same day. That way, you can really force yourself to acknowledge that the money is gone.

Other Techniques

  • Get your parents to be the enforcer. Deposit much of your monthly income with them. When you lose immediate access to your funds, it will compel you to think twice before you decide to incur any significant expenses
  • There are plenty of money management and tracking apps that you can download on your smart phones. It may be too much of a hassle to have a pen and paper around you at all times, and you will probably forget specific amounts if you wait till you get home. For the most part, apps are more likely to engage you since most of us check our phones regularly.
  • Speak to your financial advisor about getting an endowment plan. Whether the returns are lucrative or not is less significant than the fact that you will actually be stashing cash for the near future.