Tuesday, 9 June 2015

Leading Frugal and Meaningful Lifestyles

By looking at the explanation above, can you fully internalise what is frugality? Everyone will not intentionally waste their resources, does this made everyone frugal?



I rarely met people who are frugal in Singapore. Most people assumed they are already efficient in managing their resources or they adopted "YOLO" (You Only Live Once) mentality. No wrong with being YOLO, but you don't need to spend excessively even if you will die tomorrow. That is my point.

Frugality is a lifetime learning. I will not be able to make you frugal just by reading this post. It will only help you gain awareness and you need to practice it in your daily life, in every decision you made. Trust me, once you are acceptance and used to it, it only take a few milliseconds to make decisions and it could save most of your lifetime working for money. There is no pain but pleasure to it.

Bare in mind, there is a difference between being plain cheap and frugal:

Being cheap, you look for the cheapest and ignore the functionality of the things you are purchasing. You may end up spending more because it don't last or it don't meet your objectives. Being frugal, It will help you look for cheapest way to get the things that met your objectives. You stretch your dollar and make it works harder than you have worked for it.

I have an infant and a HDB flat to maintain. My expenses is about $800-$1000 a month (excluding mortgage by CPF and my insurance/annuities premium). I earned about >$60k salary in a year. Am I frugal just by looking at figures? I actually think I can do better in some areas.

To sum it all using my case as an example, I started working as a diploma graduate earning $1,600 a month and this is my profile:

31 years old

1) Married man
2) With a young infant
3) With a lovely wife
4) HDB flat fully paid for by CPF OA in 8 years
5) warchest of >$100,000
6) A little of equity
7) Annuities, bond and insurance that allowed us to retire in peace after 60 years old
8) On track to achieve financial independence status by 40 years old
9) Can semi-retire any time, (but may affect point 8 by a few years)
10) 1-year worth of emergency fund
11) Debt free (except HDB mortgage)
12) A little of passive income
13) Covered for death, disability, critical illness and hospitalisation according to our needs
14) Last took allowance from my parent was 18 years old and I have been giving them allowance since I started working
15) Piece of mind with financial confidence 

Not very impressive I know, but I can't imagine if I am not frugal at all. It could be something like that:

1) No cash
2) No passive income
3) Still repaying diploma and degree tuition fees
4) Work until the day I stopped breathing
5) Any misfortune mean I could be bankrupt any time

If there is a score card and I would to rate myself, I would only give myself 85% frugality points. What if I am 100%?

Which one will you choose for yourself? Your choice!

Frugal Daddy

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