Tuesday, July 30, 2013

A new journey begins

While having a shower, I was mentally calculating the kind of money that I can save, given my 'new' circumstances now. 'New' because it had actually been a while - 2 yrs to be exact - that I had my own cosy hdb flat, I'm married and I've a pre-owned car. Realistically, these two things would add up to the expenses that I spend on a monthly basis, so it also goes to say that I would find it more difficult to save the magic 4.2k per month. Why 4.2k per month? Because 4.2k x 12 will add up nearly to 50k - that challenge that I set myself seemingly so many years ago.

It had also been a while since I tabulated my monthly expenses. I had always been keeping track on all the items that I spend on, noting them down fastidiously in my handphone before keying it into my spreadsheet. This habit started so long ago, after I wanted to find out exactly where my money flows to each month. I initially wanted to stop after 1 month, but got so used to it that I had done it for 6 years (I had to look at my excel file to realise that 6 yrs had passed!). A quick calculation on excel shows that that, indeed, my expenses had increased. Nothing surprising there.

Here's the breakdown per month:

Mortgage payment for hdb (including insurance for property) - 33%
Personal expenses (includes petrol, entertainment, food) - 25%
Personal insurance (whole life, term, disability etc) - 13%
Parents -16%
Tax- 4%
Utilities -3%

Total : 100%

I'm sharing half the expenses with my working wife for those shared expenses like housing and car. Most of the items I can't and don't want to cut. If there's any expenses that I can cut down, it'll be on personal expenses. Maybe if I reduce some more discretionary spending, I can push the expenses down a bit more. Bah, but what's life without all these perks...I'm happy with these figures.

As for savings, maybe I can start with 30k per year. This should be a comfortable figure to begin with. I don't want to begin with any number lesser than that.

25 k per yerar - 2.1 k savings per month
30 k per year - 2.5 k savings per month
35 k per year - 2.9 k per month
40 k per year - 3.3 k per month
45 k per year - 3.75 k per month
50 k per year - 4.2 k per month

With 30k per year, I would need to save 2.5k per month. I've been keeping track of my expenses since 2008. Since I know what my monthly expenses are, I'll just add the amount that I need to save and I'll get my target income. It happened to me many times in the past...once you put your mind to a figure and let the universe know about it, things will happen in your life to make it happen. Of course you must come with a prepared mind and seize the opportunity as they come along.

But unlike in the past, I'll take it easy this time. This shall be my game that I can play comfortably, not a competition to hoard as much as I can. I think I can do a fine balance this time round.


Kyith said...

good luck with that bro.not many will beat a teachers earning power.

Money Honey said...

by saving 30k per year, placing it in bank savings account? or placing 2.5k per month into reits or stocks which generate at least 5% per annum? if the latter then 30k x 5% = 1.5k ---> your utilities is free for the whole year!

CreateWealth8888 said...

Any plan for Baby LP in this new journey?

la papillion said...

Hi Kyith,

Thanks bro :)

Not many will suffer the variability of income as that of a tutor too. Don't just see the good side of it. There's a lack of leave, bonus, benefits and one's income will be restarted to near $0 at the end of each year. Plus you are your own marketing department, HR, worker, boss etc.

Not many will want to do such a job for a career.

la papillion said...

Hi Money Honey,

Thanks for the suggestion...but nah, I don't think I'll do that. Reits is good to hold now but I kind of doubt that it's good to buy now. You cannot just look at the good side of holding reits, the returns should be calculated as the expected returns of all possible outcomes, namely the outcome that your capital might drop more than 5% because the price drops.

Question for you: During a protracted bear market, will you buy reits or buy blue chips?

la papillion said...

Hi bro8888,

Nope. Must wait till both parties are ready before committing to such a venture, otherwise everyone suffers. In a way, this sum of money can be used to offset some of the initial cost of having a kid, if I have one.

If not, it's a good idea to start planning for retirement lol!

Singapore Man of Leisure said...


"But unlike in the past, I'll take it easy this time. This shall be my game that I can play comfortably, not a competition to hoard as much as I can. I think I can do a fine balance this time round."

Welcome to travelling light!

Putting too many "stuffs" into our backpack for kiasu reasons will only wear us down.

"Enough" is enough :)

la papillion said...


Haha, you're right...now I enter with both eyes open and realized that enough is enough :) Sometimes it's hard to say enough...too little you'll know, too much you'll know, but enough? Haha, 'enough' is balanced by the forces of greed and fear, so it's harder to determine :)

Pok Chow said...

Wow! I can tell you're really meticulous when it comes to your expenses. It's a good but tedious habit to have/maintain. I wish you all the best!