Monday, September 30, 2013

Thoughts after 1 month of YNAB

I've finally reached the 1 month mark of using the personal finance software, You Need A Budget (YNAB). It's the first time that my expenses are measured to the cents, inclusive of all the accounts that I had. In the past, I didn't include the cash in my wallet and neither did I group all the spending I had using my credit card and cash together. For example, if I've spent $100 on food using cash and another $50 on food using credit card, I didn't take into account that I spent $150 on food. It's a simpler inclusion in my spreadsheet to do it, but I just didn't do it. I guess there's no real reason for me to do it.

Well, using YNAB didn't give me a choice.

Hence, I uncovered a few things about my spending:

1. I spend about $540 on food. These includes groceries trip, hawker/food court and also restaurants. Since me and my wife take turns to pay for restaurants, my restaurant bills also includes her share. But I think it averages out, since my wife also help to offset my bills by paying for me. 30% of the food bills come from restaurants trip, another 68% from hawker/food court and the rest are groceries. I think if I need to cut anything, it'll be restaurant bills.

Another interesting thing is that I grossly underestimated my food expenses. As a rule of thumb, I count it as $10 per day ($5 per meal) for 30 days per month, amounting to $300. Then I include another $100 for restaurant bills, chalking about $400. I didn't include groceries at all in the past. So now, the new metric should be $20 for food per day, everything in.

2. I used to be very concerned about spending a lot on gadgets. I mean when I don't spend, I really don't spend. But if I do, it'll be $xxx to $xxxx in one shot. This is something quite different from my wife, as she is used to spending $xx but very reluctantly to do $xxxx. I set up an account called 'play fund' to purchase all these computer gadgets/games/peripheral computer stuff. Busted it this month when I spent a few hundreds for my handphone. At least I don't feel so guilty now, since I already put in a budget for it. That's one of the main reason why I wanted to do a budget - so that I can spend without feeling guilty, otherwise I could save too much. A happy problem, but a problem nevertheless.

3. I have missing cash here and there in my 'wallet' account and occasionally, extra cash. It's not a lot of money. $1 here, 50 cts there, 20 cts there. It's funny because I recorded in every single transaction. The only way that I could lose or gain these small sums of money is because I seldom count in detail the change that I get from others. It's just a quick visual look and I'll put the change aside. Either that, or my wallet has a small hole that I'm unaware of. This unaccountable sums of money that I can get from time to time is classified under 'reconciliation balance', and it happens when my actual amount of money in my wallet is different from the amount of money I should have in my 'wallet' account in the software.

Things are much much cleaner and clearer. I thought it's good enough using spreadsheet but now I probably couldn't go back to using just spreadsheet. The integration between mobile phone and desktop is perfectly suitable for my needs and it saves me a lot of time double checking.

Certainly one of the best things that happened in this aspect of my life. I'm a big fan of anything that improves my productivity.

Wednesday, September 25, 2013

I don't know

It's so easy to say the three words, "I don't know". By saying that, you don't have to put more effort anymore. You don't have to try anymore and you certainly don't have to blame yourself for not knowing. Just by saying I don't know, you absolve yourself of all responsibilities. Suddenly, it's other people's problem - those who 'know' - and you just have to wait for them to help you solve it.

The difference between a good student and a bad one can be seen by how easily they say those three words. Good students face as much difficulties as bad students when they encounter something new, but their attitude makes all the difference. They seldom say I don't know. In fact, they seldom give up. They'll work on a problem until the problem gives way. If they can't do it, they'll try it again and again. If they can't solve it without some guidance, they'll seek the necessary guidance and find the necessary skill set and knowledge to solve it. They own the problem. They want to solve it. It's their focus and never say die attitude that makes them winners, eventually. Good students work on a problem longer than others, outlasting those who say "I don't know" the instance they encountered difficulties.

Bad students are just like tissue prata on a rainy day. The moment the first raindrop hits the prata, it crumbles and soften, losing all shape and structure. They lack the tenacity to fight and they certainly don't own the problem. If you don't own the problem, it's not your problem, so you don't have the motivation and determination to finish it till the end.

Like a prata hitting the first drop of rain. Can you imagine it?

This kind of attitude will last long into your adult life and beyond your student days. If someone ask me what's the point of learning 'cheam' trigonometry and differential equations and integration, this is what I would tell them. In learning a particular subject, there is a set of syllabus laid out by MOE and a hidden set of syllabus of LIFE. The syllabus by MOE are the learning objectives for that particular subjects. These outcomes will be tested in the exams but will be soon forgotten once the student leaves school. However, the hidden curriculum - the syllabus of LIFE - these are much much more precious and have long lasting effect in your life, well beyond the context of the subject. To succeed well in maths, besides knowing how to do the content well, you also need to have a set of characteristics. In maths, it could be logical thinking, carefulness, tenacity and creativity. For example, no matter how good you are, if you're not determined, as soon as you hit an obstacle, you'll give up. In that way, you'll never be able to do well in the subject. Those little habits you do while doing maths - like forcing yourself to try again and again, or checking, or asking around for help but working through the sums yourself - reinforces good character over and over again throughout your study life. These things last, long after you forgot the solution to the integration of ln x and differentiation of cot 2x.

I must have learn tenacity by playing computer games. In those days, SEGA games seldom comes with autosaves or save-any-time-you-like. You only save at a certain point, or mostly, none at all. I remember playing contra or sonic, carefully working through levels and levels and not having a save point anywhere in sight. You die often. You try again. You die again. You try again. UNTIL THE GAME GIVES UP OR YOU GIVE UP! The reward for not giving up and winning the game is often just that you can see a lousy pixellated victory at the end game and perhaps some sob story to convince you that the hero won against all odds.

So, do yourself a favour. Don't say "I don't know" so easily. Fight hard and fight harder.

Friday, September 20, 2013

5 reasons why you need YNAB (and 3 reasons why you don't)

This is an unpaid review of You Need A Budget, also known as YNAB. I bought it last month from steam at a discount, but had long heard of it by others who gave rave reviews about this personal finance software. Since it's at a great discount of 75%, I decided to plunge into it and try it for myself. Prior to this leap in using the software, I already had a working excel spreadsheet that works for me for the past 5 or so years. The spreadsheet is meant to keep tabs on my expenses and also keep records of all my transactions in the form of a cash flow statement, balance sheet and an income statement. I record all my expenses and the income flowing from my handphone using just a simple note taker, afterwhich I'll transfer the information to my spreadsheet in my computer after forthnightly or weekly.

As you can see, I'm not so hot about changing a system that works for me and that I'm so comfortable in using. But there's a few things about my system that I don't like. Firstly, it's hard to reconcile bank statements. Secondly, it's lacking a graphical interface. Call me shallow, but between a system that works 100% but is ugly and a system that works 90% but is pretty, I'll go for the second one. The nice interface makes me want to do this forever, not that I'm lacking in motivation.

 YNAB is basically a budgeting software. You decide, at the start of the month, how much each dollar you would give to different envelopes, like food, entertainment, handphone bills etc. They also have a free android app (I checked, they have an app for iOS as well) that ties in very nicely with the software that is installed on your main computer. The information between the app and the one in your computer can be synced using dropbox. All the backup and data are placed in the dropbox, so you can start your YNAB budget from one of these autosaved points, which can be very handy in case something horrible happened that wiped out all your hard work in keeping tabs on your personal finance.

Nice clean interface makes you want to key in something!

I realized that I'm using this software less like a budgeting software, but more like an accounting software, where all my transactions between accounts and cashflow in and out of accounts are recorded and kept track of. I guess this would take some time to adjust because as mentioned, I've never done budgeting before and I already knew roughly what my expenses are for different categories. But I always say we can do better, that's why I did a system overhaul by adopting this new software.

One of the good things I like about YNAB is that because it's all programmed nicely, it's exceedingly easier to change things and make sure that everything is still tallied. During the past one month of using the software, I had to do some major changes to my account. In the past, using spreadsheet, I've to comb though the worksheets of the previous months carefully. But for now, I just have to key in the new changes, and everything else is taken care of. Needless to say, I'm suitably impressed. Though I'm not expecting much major changes going forward, it's still a nice feature to have knowing that any new way to partitioning your personal wealth is easily down with a click of a few buttons. Effortless.

The YNAB app on mobile phones makes it very easy to key in transactions and it auto syncs.

I keyed in all my accounts in YNAB, including all the marked to market value of my various investment portfolio, insurance cash value, and all the shitloads of debts that I owed HDB. Straightway, I can see my networth displayed with superbly clean charts and nicely tabulated figures. If I need to see my income vs expenses, there's another tab to click to see it too. I can compare data across the years, the past 3 months, this month and the year to date. This is something that I can't do easily since I divided my expenses spreadsheet physically year by year. I can, of course, combine them, but again, it's the ease of use in YNAB that blows me off.

Nice pie chart showing you the different categories of expenses according to timeline that you set

In summary, here's what I like about YNAB:

1. Extremely easy to check and reconcile accounts. 

If your actual statements and the one you had in YNAB differs even by a cent, it'll alert you and you can do the necessary checking. Saves me a hell lot of time for this little function.

2. Very clean and nice graphical user interface

Clean and nice. The reports generated are also very good, if you're into this sort of thing. Makes you want to keep checking it.

3. Ability to change things easily and keeps backup on dropbox

If you make a fatal mistake, you can return to the last autosaved place. Changing something automatically changes everything from the past to this moment. You won't appreciate this until you got something major to change, so trust me on this one.

4. It has an well integrated free app on android.

I used to key my expenses into a simple note taker in my phone, then transfer the records over to my spreadsheet over at my computer. This doesn't take much time but it still takes some time. With this app, whatever I keyed into my hp automatically gets synced to the software at my main computer. That makes my life soooo much easier. Just this alone makes this software worth adopting.

5. Very nicely integrated philosophy behind the programming

Once you start downloading the software, you'll be in a short but useful online lecture program on how to jumpstart your failing financial management knowledge. You'll be exposed to very good advice to save up, to do proper budgeting and basically good personal finance habits. Even I find it useful. I particularly like a phrase which they used very often - "Give every dollar a job!". If want to learn more, there's even free live classes that you can sign up and learn about various topics. It seems like the people behind YNAB is really interested in making you financial healthy. They are really serious in making you change your mindset to have real change in your life.

Rule number 1: Give every frakking dollar a job!

Here's what not to like about YNAB:

1. Poor integration of financial aspects

If you're looking for something that can keep track of your investments, this is not for you. It works very well in what it aims to do, and this is just not one of its function. I still using my trusty old spreadsheet for that purpose.

2. No auto download of credit card statements or bank statements

Actually maybe it does have but I don't like the idea of it at all. If you want to keep tabs on your expenses, then do so. The act of doing it will bring a lot of benefits rather than downloading the statements automatically from the bank. However, if you really want to, you can download credit or bank statements, then upload it to YNAB. It can accept .OFX , .QFX, .QIF and .CSV format. I wouldn't recommend it, neither do the people behind YNAB.

3. Tracks the amount of money right to the cent

What's not to like about this? Well, usually when I'm keeping tabs on expenses manually, I disregard anything less than $1. I also don't count the money that I've in my wallet. This program forces me to count each and every cent. There are many times that I noticed that the amount of money that I had and the amount of money that I'm supposed to have in my wallet do not tally. I need to reconcile the differences. This means I must have missed out some stuff...Not a big sum (<$15), but can be irritating when the software highlights to me that I missed something out and I'm the sort of person who then have to correct the mistakes. It's making me anal fussing over 10 cts here and 20 cts there. Granted, this is the point, afterall.

I really think this software is worth putting the time and effort to learn. For newbies who are starting out to earn their first drop of cash, it'll make you learn a few good habits that can last you for life. That alone is worth the price of this software. For those who had been tracking your expenses fastidiously all along using excel spreadsheet, perhaps a little more graphics, a little more automation can make an easy job even easier. Do try it as they have a full featured demo for 34 days - more than enough time for you to try it out to see if it can fit in to your life. No harm trying right?

Monday, September 16, 2013

Redefining your 'self' is the key to anger management

Most people love themselves more than others. It is entirely understandable, though it is self centred and egoistic. Human nature perhaps. Is it possible then, that if the concept of self is widen to include others, then the self centreness will be morphed into compassion and empathy for others? By changing the paradigm of "me against others", to "us against others", onward to "we against you", and finally just "everyone against no one", is it possible to change selfishness to selflessness?

I was very angry with someone recently. For the sake of this conversation, let's just call him Ajit. I felt that Ajit is the one at fault here because he is being selfish and irresponsible. I've been doing my share of work but he didn't and the fact that he's constantly sick, and therefore can't be healthy enough to do his fair share of work is just ridiculous to me. I always think that if you don't mind, it doesn't matter. For me, duty and responsibility is paramount, but apparently Ajit didn't share my philosophy here. Nevertheless, the underlying point is that I'm angry with him. Very angry.

I went to shower fuming. Ten thousand evil thoughts flickered through my mind. You know, when you're angry with someone, you'll replay 'the' conversation again and again, with each subsequent iterations punctured by remarks more poisonous and hurtful than the last. It certainly makes my heart pound faster and faster as I replayed those fantastical conversation with Ajit again and again in my mind, complete with all the mean things I'll say and all the counter points I'll make. Soap opera at its best, except that I'm the lead and the director and the script writer.

I remembered something that I read, essentially that's the first paragraph of this article. If I can extend my definition of self to include Ajit, then his failure is my failure and suddenly all became clear to me. There's no me against Ajit; simply put, there's just me thinking about Ajit making me angry. Since Ajit is an extension of myself (actually it's all in my mind because I'm just imagining how he reacted. I 'conversed' with him through whatsapp), I'm angry with myself. This notion is ridiculous, hence I stopped the anger and become (more) at peace.


Thus, instead of following the poisonous script in my mind when I was showering, I changed my tack to something more inclusive and ultimately more useful in solving the problem at hand.

Friday, September 13, 2013

Budgeting your time and energy

I bought a personal finance software not too long ago, ironically on a website that sells computer games - the infamous "Steam". As usual, my day begins by checking out on the latest offer on the gaming website. Sometimes, they sell games at 50% or even 75% discount. Even though I play games much less frequently now (I prefer to read, if anything), I still want to be in the know in that industry. It's out of interest, and also because it gives me some talking point to create rapport with my students. More of the former than the latter. Anyway, steam gave an offer I simply could not refuse. Instead of the recommended retail price of 60 USD, it's selling at 15 USD - a whopping 75% discount. Hoot lah, I say.

I knew of this software, aptly named You Need A Budget or affectionately called YNAB by users, from Drizzt. If you subscribe to his facebook and twitter, he'll have this automated post every now and then coming up saying that you'll get more confidence from savings. Yes, but no need to make that an automatic post right?! (haha, 50% joking, 50% poking to Drizzt)

Budget your time - taken from

But this is not a review of that software. It's a little premature to give a review when it's less than a month since I bought and used the software. Perhaps by the end of this month I'll give my thoughts on YNAB and how it can benefit people who haven't got a clue as to where their money flows to, and to others who had been tracking their expenses fastidiously (like me) on excel spreadsheet.

I've never put myself in a budget before, so using the software makes me think of a few things related to budgeting. To budget is to realise that you have a resource that is scarce and precious, hence you have to proportion it to different places in the manner most beneficial. It's a subjective exercise and nobody can say that his or her budget is better than yours. Even though I say that, there's clearly a line between a good budget and a foolish one. If you budget until your spending far exceeds your income, that's obviously a foolish one (You have to wonder why certain governments can make such foolish mistakes when they budget their country's wealth). On the other hand, if your budget makes you save and save without spending proportionally, that's also a foolish one, though it takes a little more insight and wisdom to see why and that's out of the scope of this post (but it also makes you wonder if our govt is following such a roadmap).

Question: Have you ever thought about budgeting your time and energy?

For a large part of my life, from my student days to the first few years of my working life, it's like this:

Career & Money : 80%
Body & Health: 5%
Spiritual: 0%
Family and friends: 15%

Career, when I'm a student, is simply about being a good student. I seldom do sports unless I have to and you can't really say that I'm taking good care of my health. It's hard to define spiritual aspects of my life, perhaps you can say it's religion, perhaps it's also a bit more than religion. The best definition I can give is this: that which gives you peace and happiness. Needless to say, for most part of my life, it's quite tumultuous. Almost never spent a single dime of energy and time towards the betterment of my spiritual self. Family and friends are not a big part of my life. I'm quite a loner.

Let's look at now:

Career & Money : 60%
Body & Health: 20%
Spiritual: 0%
Family and friends: 20%

There's a greater shift of my energy/time towards body and health. I try going to the gym at least once a week. I haven't passed my IPPT since like 5 or 6 yrs ago (used to be silver, alas..) and now I'm working towards passing. Never felt fitter in my life than at this point in time, and I realised that the benefits of having a better body/health spills over to other aspects of my life too. Still not a party person, but the increase from 15% to 20% in "Family and friends" means that I spent quite a bit of time with my wife. As I get older, I realise that you have less and less friends, but you have more and more intense friendship. Good trade-off if you ask me.

How true! - taken from

Ideally, my time/energy should be allocated like this:

Career & Money : 25%
Body & Health: 30%
Spiritual: 25%
Family and friends: 20%

Remember, there's no right or wrong budget. Your budget best reflects your life and only you can clearly define them. I'll try to work towards this budget of my time and energy and this should be the workplan for the "middle age" of my working life. You can see that I really wanted to spend more time and energy on developing my spiritual self - something that I've been neglecting. Health should take a bigger priority of my life and career/money, well, let's just say that something has to pay the bills while you're still alive. More time and effort should be spent doing the things that you like. Hopefully, that's work, lol!

Wednesday, September 11, 2013

Is your financial goal your Procrustean bed?

It's interesting that these days, there are more and more young bloggers who are financially enlightened. They started having the idea that retiring early is a worthy goal of their life, hence the way to achieve it is to increase savings, tighten expenses and work on their investment skills to increase their passive income. The funny thing is that I've been there (but can't say that "I've done that!" though) and I no longer am actively seeking to be there. Strangely, I don't think I've ever said that I wanted to retire early in my blog post (someone prove me wrong pls?), but I did mention a few times that I wanted to achieve a level of passive income to offset my expenses. And I'm a strong advocate of having a strong savings discipline as soon as you start getting money.

A few people (notably a blogger I affectionately called PG) also blogged about the same issues. Started off wanting to retire early and before long, life caught up and he's no longer so actively seeking that goal. I believe he has the same thinking as me. It's not that it's no longer importantly, it's just that it's no longer the sole purpose of living. These days, I dare to say that if I can't achieve financial independence before the self defined retirement age (usually 35?), I'm going to be okay. I'm not a failure and I hope I can sincerely say that I'm not jealous of others who can do so too.

So what happened to diminish this worthy goal? I'm not so sure I can say it's this reason or that. I've a feeling that it's more like a straw of this and a straw of that and soon, the straws become a substantive enough mass to proverbially break the camel's back. Let's see if I can identify a few straws:

1. The realisation that I can lead my life in different ways

2. The realisation that retiring early at an early age has a cost that I do not want to burden myself with

3. The confidence that I'll be okay even if I can't retire early and have xyz passive income flowing in monthly

I reserve the right to change my opinion at a later point in life, once information changes, as I had done in the past. Haha, life is complicated and I'm certainly not simple too.

I want to point out that not having a goal of wanting to retire early and having xyz passive income does not mean that I act irresponsibly towards my own financial situation. After tracking my expenses and understanding how I treat money, I have the confidence to say that even if I were to turn my financial tap looser and let the cash flow out, I still wouldn't be a spendthrift. It just isn't me. Neither am I saying that people should follow my ways.

You're free to lead the life you want, and ultimately you're the person responsible for it. I'm just saying you shouldn't take a goal that seems so fashionable nowadays and try to mould yourself towards it. Don't be like Procrustes, the Greek who cuts off people's hands and legs so as to fit into a iron bed that he had. Ask yourself if this is really what you want.

You know, in my line, not everyone wants an A for exam.