frugality Archives | MoneyDigest.sg

How Frugal Are You Really?

According to the Merriam-Webster dictionary, frugality is characterized by being careful in the usage of one’s resources. Those who are frugal are unwilling to lavishly enjoy the fruits of their labor. It may come as a surprise to you to know that the word frugal derives from the Latin term “frux”, meaning “fruit” or “value”.

In Behavioral Science, frugality is defined as the resourceful use of already economic goods and services to achieve a long-term goal. If you are keen to adapt this multi-dimensional consumer lifestyle trait in order to save money during the pandemic, you may read the list below to see how many frugal choices you have been doing.

#1: YOU CREATE A GROCERY LIST AND STICK TO IT

Instead of grabbing whatever attracts your eye at the counter, you prefer to create a grocery list and stick to it. It is easy to increase awareness when it comes to your grocery spending when you plan ahead. It may be challenging at first and you may forget several items, but you will find yourself becoming more intentional with your listings as time passes by.

The grocery list is essential because frugal people plan their meals and frequently eat at home. You may avoid the temptation of dropping by a fast food chain by keeping a container of snacks in your bag or in your car. Calm your rumbling tummy as you travel back home.

#2: YOU DO NOT CARRY CREDIT CARD BALANCES

Frugal people are not dictated by their credit card purchases. While some have the discipline to pay off their credit cards every month in full, others choose to stay away from these entirely.

Self-awareness and control play play huge roles in a person’s success with credit cards. If you have been in debt for years, consider to cut down on your credit card spending and pay them off once and for all.

#3: YOU DO NOT COMPROMISE YOUR HEALTH

Being frugal does not mean that you will only invest on cheaper alternatives and low-quality food items. Many frugal people choose to eat healthier greens and legumes and keep meat to a minimum. Frugality does not compromise health to save money. Frugal people have strategically plan their meals and have invested on insurance plans that will benefit them in the future.

#4: YOU DO NOT WASTE FOOD

Frugality entails that you use what you have until you need to replenish it. Frugal people eat leftovers until they are non-consumable or inedible. Eating your leftovers also cuts down on your food expenses and environmental waste.

You may create new meals from your leftover food. For instance, your leftover chicken can be shredded and turned into chicken sandwich. While, leftover rice can be used for your egg fried rice. Just ask Uncle Roger!

#5: YOU LEARN FROM YOUR MISTAKES

Frugal people are not perfect. No one is. Frugal people make financial mistakes and learn from it. You may have spent too much on your holiday shopping last year or caved in to your monthly food cravings.

It is important to be aware of these financial mistakes. If going over budget becomes a habit, you need to re-evaluate your spending patterns and your budget.

#6: YOU KEEP TRACK OF YOUR BILLS

Frugal people look for ways to save money by keeping track of their bills. Other than eliminating unnecessary plans or subscriptions, you may find it easier to pay off your dues through auto-pay programs.

Search through the profiles of your service providers and ask if they have automatic payment schemes. For instance, some telecommunication plans offer automatic payment schemes through online banking. This way, you will be able to save on time and avoid paying late fees.

#7: YOU NEGOTIATE ON A PRODUCT OR A SERVICE

Frugal people love to negotiate to get a good deal. Whether they are purchasing a gadget or an appliance, they excel in the art of negotiation or spotting the best deal. They do not shy away from purchasing second-hand or pre-loved items to get a good deal. And, they certainly do not want to spend S$85 on a cup of coffee.

#8: YOU COMPARE PRICES FIRST

In order to save more money, frugal people tend to search high and low for the best prices and free upgrades. Helpful price comparison apps and websites have flooded the market these days. Some popular price comparison websites in Singapore include pricepanda.com.sg and iprice.sg. Use these tools to help you decide on an item, before adding it to the cart.

#9: YOU SHOP OUT OF NEED

Making shopping a hobby can cause a significant hole on your wallet. Frugal people shop out of need and save money whenever they can. Finding an inexpensive hobby is easy, when you are open to the possibilities. I, myself, am learning how to play a new instrument. I have picked up a Kalimba (Thumb Piano) online for a little over 20 dollars. This inexpensive instrument has provided countless hours of entertainment for me and my family. Now, my entire house knows how to play the Kalimba.

#10: YOU DO NOT SHOP BASED ON YOUR EMOTIONS

Shopping based on your mood may lead to buyer’s remorse and impulse purchases. Frugal people can get into emotional circumstances too, but they usually are not emotional spenders.

You can be the most disciplined person under normal circumstances, but be heavily impacted with unfortunate circumstances. We are not exempted from the effects of the global pandemic. When this happens, you have the choice to throw all the structure out of the window or to slow down and examine possible solutions.

#11: YOU CONTINUE LEARNING

Personal development is important across all fields. Frugal people continue to learn from others and their own financial mistakes. It is beneficial to listen to educational audiobooks and enroll to (free or paid) online classes to boost your professional and personal growth. You may browse through the free courses by Google Digital Garage to start growing and learning.

Image Credits: unsplash.com

Sources: 1, 2, & 3

Debunking The Myths On Frugality

Do you seek to attain financial independence? Well, you may consider taking “frugality” at heart. Frugality is the quality of being thrifty, prudent, or economical in the consumption of consumable resources (e.g., food). This quality is embodies while avoiding waste and extravagance.

For people who are mystified by this term, keep reading along.

MYTH #1: FRUGAL PEOPLE HAVE NO CHOICE

For a fortunate number of people, frugality is a choice. They see frugality as a method to create a strong link between time, labor, and money. Every purchase represents the time and effort they have spent working. It is a conscious decision to plan ahead for their short-term and long-term financial goals.

MYTH #2: FRUGAL PEOPLE ARE CHEAP

On the surface, people may assume that frugality and cheapness are one and the same. Similarities may be present, but these two are entirely different characteristics. A frugal person sees the best value for his or her money. While, a cheap person focuses on the lowest price.

Image Credits: pixabay.com

Say that you are grocery shopping for the entire family. A frugal person will use accumulated coupons and purchase items that are only on his or her shopping list. On the other hand, a cheap person will highly decline to spend more than S$50 on a week’s groceries.

MYTH #3: FRUGAL PEOPLE NEVER SPLURGE

Even frugal Millennials splurge from time to time! When you are able to skip on things that are not essential to your lifestyle, you will be able to free up more money for the things that are important to you. It’s a no brainer! For instance, I spend most of my money on quality food and cosmetics.

Image Credits: pixabay.com

Frugality is not all about self-sacrifice. If you are skilled in long-term savings, you may choose to spend the excess on something that you deem to be priceless. Personally, catching a sunset in Santorini sounds like a great idea to me!

4 Brilliant Ways To Worry Less About Money

They say nothing lasts forever but, our relationship with money is so pervasive that it feels like forever. The mechanisms that keep our lives in tact are almost always surrounding money.

In his book entitled: “How To Worry Less About Money”, British writer and philosopher John Armstrong shared many ideas on how to look at money in a different light in order to lead a better life. He understands how deep our relationship with money is which is why he wants to examine how we relate to it and how we attach meaning to it.

First we have to understand that money problems and money worries are two different things. According to oxforddictionaries.com, a problem is a situation or a matter regarded as harmful or unwelcome and needed to be dealt with and overcome. While, worry is a the state of being troubled and anxious and real or potential problems.

Therefore, problems ask for urgent and direct actions while worries as created by oneself due to disturbing thoughts. Fortunately, disturbing thoughts or unhealthy patterns of thinking can always be changed! Here is how:

1. MONEY CANNOT BUY HAPPINESS

It is no surprise that Armstrong believes that happiness cannot be quantified by money. Money can only buy the symbols that produce happiness and serenity but it does not purchase the positive emotions itself. In fact, studies show that you will get more satisfaction if you spend your cash towards memorable experiences such as family vacations than towards material things such as a new designer bag.

2. KNOW THE DIFFERENCE OF PRICE AND VALUE

What differentiates value from price is its nature. Value is a personal matter while, price is a public one. Value is personal because the meaning of money and the object is assigned by the individuals themselves based on their perception, culture, wisdom, and character.

On the other hand, price depend on the majority because it negotiates between supply and demand. For instance, the price of the refrigerator depends on how ready is the manufacturer, how much people want it, and how much they are willing to pay. People who are frugal give importance to the value while people who are cheap primarily follows the price. Know which side you want to be on.

3. IT IS GOOD TO GIVE BACK

There is a deep and innate fear that one’s life will be lived in vain without making a contribution or a difference in the lives of others. This is why you may generate happiness and kill those worries by doing good things for other people through the money you have. Lending out possessions can help you enjoy the material things that your money bought while, volunteering or donating can always trigger positive emotions.

4. CULTIVATE YOUR RELATIONSHIP WITH MONEY

For your relationship with money to flourish, you must understand that it involves the two of you. When things go badly, it is partly because of what you brought to the situation and partly because of what the money (i.e., power of spending) brought. Do not let the power of spending govern you.

Image Credits: pixabay.com (CC0 Public Domain)

Temperance, moderation, and frugality are essential to alleviate your worries about your money. You achieve this by distinguishing your needs from wants. So, if your bike works perfectly fine then there is no need to buy a new one. Be wise in purchasing and resisting impulse by getting what you really need.

Learn to live within your means when you retire

Many people cannot imagine themselves to be retired. It may be so many years away that it does not resonate to the current ideology of working hard for success and financial freedom or to simply stop working.

There are two kinds of retirement: by choice or by circumstances.

If you choose to (or not to) retire, it means you have either achieve financial freedom or you have relieved yourself from most financial obligations such as paying off your mortgage and raising your child to legal age. You may also choose not to retire as you gain satisfaction from working incessantly till the day your body can no longer take it physically. Alas, you throw in the white towel.

Like it or not, the truth is you may also fall in the latter category. With bills to pay and mouths to feed, you try to impress your superior so that you can keep the job as long as you could. Unfortunately, besides culminated years of experience, you are also the few who has inflated the labour cost of a company. In contrast, a fresh graduate costs much less and has more drive and in a company’s perspective, it makes complete economic sense to choose the latter. Fortunately, in Singapore you are protected by the Retirement and Re-employment Act. Under section 7a, your employer should offer re-employment when you attained the specified retirement age of 62, until age 65 or up to 67 as may be prescribed by the Minister. Of course, your work must be satisfactory and you must be healthy in order to be re-employed. What if you are completely debilitate by common illness such as diabetes? Stroke?

Whichever the case, learning to live within your means when you retire is important. You need to ensure your money is sufficient to cover you until the day you call it quits. You don’t want to blow the last candle on your 80th birthday cake knowing that you have spent the last dollar on it,

Here are 8 tips to make sure you live within your means.

Create a retirement budget plan

Look you may have done this when you first started working but circumstances has changed, your income and expenses are no longer the same. Without a budget plan, you simply cannot predict (or to be as accurate as possible) when you will finish exhausting your retirement reserves. And that is dangerous or just plain irresponsible on your part. Start off by aggregating your sources of recurring income such as CPF, stocks dividends, rental income, proceeds from your business and interests from you cash reserves.

Track your expenses

To complement your budget plan, you need to be able to track your expenses to make sure you are in line. There are free money management apps available on your phone which you can use. So you can do away with the traditional way of budgeting with pen and paper and not worry that Alzheimer or Dementia may take them away.

Spend less than you earn

With the two tips above in place, spending less than you earn should be easily achievable. But don’t count on it should you decide to travel often and hit the greens every weekend. It is paramount to make sure that money that goes out is less than the money that comes in so that you will not deplete your retirement savings faster than you are even aware of it.

Don’t keep up with the Joneses

When you retired, you will have an army of retirement kakis (buddies) that are in the same boat as you. You will go golfing, play chess, go fishing and even travel together so no one will blame you when you want to get that Rolex that your buddy has or if you want to buy the most expensive golf equipment to unleash your Tiger-Wood-Skills in Sentosa Golf Club or in your state-of-the-art home theater with your virtual golf simulator. I won’t be surprised when you also pick up expensive hobby such as a punt in the casino when you see your ‘Chow Yun-Fat’-inspired buddy visit the casino daily. These activities are extravagant and while it is acceptable to occasionally indulge yourself, overdoing it will be detrimental to your retirement goals.

Form a saving group

Rather than a group of kakis trying to keep up with one another, why not do it the beneficial way? Form a saving group that reward the one that save the most for the week. A beer or even a treat to an afternoon high tea after living frugally for a week? I will take it.

Look out for free stuffs

Who say you can only keep yourself entertained by spending money? There are many community and social centres that regularly organise activities for the elderlies. Activities such as karaoke, mahjong session, excursions and road trips are easily available so make full use of them. If not there are also many attractions such as the National Orchid Garden, Malay Heritage Centre, or the S.E.A aquarium that offer senior citizens a discounted entry. You can also organise a fishing trip, a chess session or simply parading the birds in birds-singing corners.

Make use of senior citizen benefits

Besides having a concession travel pass, make sure you are savvy enough to know what are the privileges and benefits that are available to senior citizens. Some examples are the 2% discount for your shopping at NTUC Fairprice on Tuesday when you are aged 60 and above, 10% discounts at Watsons and 5% at Unity or Guardians, CHAS programme for the pioneer generation or even catching a movie at discounted senior citizen price.

Monetising your homes

Often viewed as a last resort, your home is an asset which you can monetize when you are asset rich cash poor. There are various options available for right-sizing. You may consider selling your HDB flats and move in with your family members to get the Silver Housing Bonus (SHB) of up to $20,000 to top up CPF Retirement Account. You can also join the Lease Buyback Scheme (LSB) where you sell part of the lease back to HDB and retains a 30 years lease. More info here: http://www.hdb.gov.sg/fi10/fi10325p.nsf/w/MaxFinancesOverviewLeaseBuyback?OpenDocument

There are also alternatives such as renting out your spare rooms and reverse mortgage that is currently in reviewed.

As you reflect on your retirement options, make sure you work towards creating a strong pot of retirement funds. While money is not everything, you would not want to rely on others if given the option to. Start saving for your retirement now and of course, don’t be penny wise and pound foolish.

Search the site