Thursday, March 27, 2014

Which method of savings will you adopt?

I wonder how many people feel the same way that I did. Whenever I'm busy earning more money, I spend much less time outside shopping or eating at restaurants, so my income shot up and my spending shot down. This resulted in my savings rocketing skywards with a boost in earned income and a drop in expenditure. Conversely, when I'm more relaxed and have more free time because work winds down, I spend more despite my lack of income. So savings suffered a massive plunge.

Don't they warn that it never rains but pours? Well, I guess it's the same for my savings too. There's either huge savings, or there's very little of it. Maybe it's just an anomaly for those who are self-employed. I guess for salaried employees, there's very little variability in income. In fact, they have fixed pay but variable hours, so the busier they are, the less they earn on an hourly basis. Not good to be too busy, haha!

I know how to save more money. My way is not to save more by cutting down on expenditures. The reason is that I know that I'm not a spender. I know this is because I've been tracking my daily expenses for so many years. Cutting down on expenditure is a legit method of savings - I'm not denying that, but I dare say that it won't be the main driver in getting my savings up. I know that because I know myself by reviewing the records that I keep. The better way for me to grow my savings is to earn more money. This might not work too well for all, because there could be some people who would reward their hard work by spending more money. The net effect is just running harder on a treadmill - you run faster but you didn't move an inch forward.

I do know that if I spend more time earning money, I will have less time and inclination to spend money. It might not work for everyone, but it works for me. I think when you read about people saving more money through different ways, you got to figure out the best way that works for you. This will require you to know how you react in different situations. If you don't, then you got to experiment and give each method a try. You can't just take a general guideline and follow everything to the T, because you're ultimately not the person who came up with that guide. Whatever works for others might not work for you. And if that method is not suitable for you, you'll give up easily.

I know that my wife won't spend money that she can't see, so the best way for her to save up is to squirrel a part of her income away to some account that isn't easy to withdraw. If she can't see it, she won't spend it. There are also some people who live life dangerously - they save more if they are forced into situations they compels them to. For example, these type of people will buy a condo (regardless of whether they can afford it now), then go and find the money to upkeep it. It works for them tremendously, maybe because they can see why they are working and saving so hard for. If I do that, I'll probably lose sleep.

I'll leave you with this famous quote from Sun Tze- "Know your enemy, know yourself ; A hundred battles, a hundred victories". The biggest enemy towards building a healthy savings habit is yourself. Either from lack of self-knowledge or the inability to control yourself.


B said...


Does that mean both you and your wife would channel savings into instruments like cpf top up or srs that is so called hard to withdraw? Other than that I cant think of any other example where it is difficult to withdraw money. Bank acct is usually the easiest to withdraw money.

Patrick T. said...

Same here. I find it harder to spend money that is a bother to take out. Thus my wife and I channel our savings to a joint-account, joint signature, no internet banking, no cheques, no cards.

la papillion said...

Hi B,

First of all, the method of savings by squirreling works for her, not me :) I'm very aware of where all my money goes to, so it's always present in my mind. This method will never work for me.

Secondly, difficulty in withdrawal is relative :) She hates digging through menus within menus to find something online. So that presents a level of difficulty for her. Just putting into POEMS MMF is a good way for her to squirrel away money, because the option to withdraw out the cash is not easily found. She can probably find it if she wants it, but because it's going to be such a bother trying to dig that out, she's likely not gng to do it. Which is true, so far any cash squirrel that is not withdrawn out, unless it's for investments.

We'll probably never top up cpf or srs, because our cpf amount is really really low. Both of us are self-employed and have negligible CPF.

la papillion said...

Hi Patty,

You too? :) But if the sum of money gets bigger, will you take it out to put somewhere where there's higher returns? I mean putting less than 10k in a savings account is quite different when that amt grows to 50k or even 100k, given the pathetic interest.

Singapore Man of Leisure said...
This comment has been removed by the author.
Singapore Man of Leisure said...


100% saving rate of zero income is still ??? LOL!

Earning more is my poison too.

Working overseas for 7 years helped me saved 3 times more than in Singapore. So 7 years out there became the equivalent of 21 years back home.

That's why I can''t talk about 10 baggers or 6 figures dividend income :(

I'm only a pretty face.

No goals, no objectives. Just the quiet realisation I have enough and the paradigm shift that TIME doing what I enjoy is more important than moving the goal posts yet again ;)

la papillion said...


Now that you put it this way, I wonder if I will work overseas for 7 yrs to accelerate the whole process. My inclination is that I must finish my commitment here before I can venture anywhere I like. Duty comes before self. Probably not then.

But if I've no commitments here at all, I'll go overseas to find myself.

You're good because you know when is enough :) Some things that are gone can be brought back. Money is one of them. Other things, once gone, will be just another regret.

Patrick T. said...

I got 2 such accounts. 1 for repaying my loans. The other is gonna just stay there until the next crisis whenever that may be!

When either hits 50k worth, I may put it in FD or somewhere that I can activate quickly.

la papillion said...

Hi Patty,

Ah, I see..I get what you mean. Good system :)