Waiting for my next pay (muses while showering)

No, it's not my pay day yet, although in all honesty, I AM indeed waiting for it. My current company bought out my notice period with my previous company - and in such cases, I need to pay my previous company compensation first (of 1 month + of my salary), and wait for the next payroll cycle in my current company before I get reimbursed.

In practical terms, it would mean I am out of 2 months of salary until this month end. So I do need to give myself a pat on my back that I managed to set aside emergency cash (as part of my resolution to get my finances back on track earlier) to sustain me for 2 months.

This also means I would get a bumper amount at the end of this month, definitely something to look forward to.

What about you? Do you look forward to pay day every month?

Any thoughts on how long you can sustain if you are without pay for 2 months?

Windfall

Well, sad to say, i did not turn into an instant millionaire following my previous post - 12-million Hong Bao draw.

I did have a consolation 'prize', as my company announced the year end incentive award (or bonus). So with the windfall (well, being able to keep my job is already good enough for me!), any bonus award can really be considered a bonus.

As with any windfall received, adequate planning is required, otherwise it will all be squandered away. Many stories on the net about people spending their inheritance within a month!

So i took the opportunity to plan out what to do with the excess amount that i will receive, and came to the conclusion - money will never be enough. No matter how much i have, i will be able to find ways to fill it up.

I will sock away 40% to my household account, and build up my emergency cash. 

The emergency cash is in line with my resolution for 2016. See Goals 2016. Given the current economic climate recently, i guess it is better to be conservative on my part to increase my buffer.

I will also take the opportunity to replace my fixed assets, namely my laptop, which has been with me for the past 6 years. 

Other non-savings expenses include allocating the bonus to my annual travel plans, as well as other expenses like giving a bonus to my family as well.

My regrets in coming up with this budget? I did not manage to allocate to 2 categories:

(1) Increasing my personal war-chest. I guess that would come with my monthly salary instead.

(2) Accruing for the tax on this bonus. Again, it would have to come from my regular budget.

What about you? I hope you have had a windfall recently as well. :) and please do share with me how you intend to allocate them.

Expenses review 2015

A year has passed when i picked up my financial game again and it is good to reflect back on what i have wanted to do in the beginning of the year: Game plan 2015

Before that, a personal reflection. I did not realise how much personal finance topics were far away from my mind until i actually sat down and decided to re-focus my energy and efforts on it. While i have always been saving and investing, it was not as disciplined and well thought out as it could have been. Dare i say, it was even quite haphazard.

When we fail to plan, we are planning to fail, and at the rate i am going, i would say i wouldn't have done very well when i reach retirement age. Granted i think i probably would not starve and sleep in streets, but definitely would be less well-off than i could be.

Back to topic. I wanted to cut expenses and increase revenue.

(1) Cutting Expenses

I have diligently used YNAB to record and track my expenses. [for some reason, i find it quite pleasurable to record every single transaction. I think it's my accounting training. I just love to balance my books to the cent] While i always have an idea of where my money went, it was good to have real solid data on what i actually spent on.

And truth to be told, the beginning months were quite tough as i tried to 'live on last month's income', which is a key concept of YNAB. I pay myself first every month when my salary is in, but using February's salary to pay entirely for March's expenses was something i wasn't ready for. After a few months of tuning my expenditure and allocation, glad to say that i have passed this 'test' set by YNAB.

So where did my money go to in 2015? The way i used YNAB is by categorizing my expenses in several buckets for analysis.

Car Expenses: $ 33,198.99
All car related expenses, includes loan, carpark, fuel, insurance and any related expenses. I would be the first to admit that the easiest way to improve my finances would be to get rid of this. Even if i take cab everyday, the savings would be hugely substantial. Something i am mulling about, but it's a lifestyle choice at the moment, and i really enjoy the convenience and experience. Lesson here (i haven't learnt it yet) is to cut this away to accelerate savings.

Fixed Expenses: $ 14,234.21
Insurance and taxes comes in here. I increased my insurance coverage for death and CI this year. This is termed as fixed expenses by me, and not much discretion could be made here from my part.

Monthly Bills: $2,943.24
These are my regular bills (phone + mobile broadband) and membership to my Taekwondo school fees and sports related expenses. A little high because i took my 2nd Dan grading in 2015, and it cost me $450 just to sit for the exam. Additionally, i had to sign up for several preparatory courses, and that cost a bit too. The monthly school (or gym if you will) also do not come cheap at $140 a month. I did rationalize my expenses here a little but cutting away the mobile broadband once the 2 years is up, although that helps only a little.

[My joint family expenses which i track in another budget (groceries, utilities, home broadband etc) comes up to about 5k in 6 months. For simplicity sake, i shall estimate it to be 1k per month. I will use this amount to add to my subsistence level of expenditure]

Daily Expenses: $9,081.47
As opposed to personal spending, these are expenses which i incur for the family, including dining out at restaurants, home maintenance fees (payment for part time maid), changing of light bulbs, family entertainment (movies night) etc.

Holidays: $8,239.05
So i took 3 trips this year, 1 week in Australia, 1 week in the UK and 2 weeks in Taipei. I was lucky that my trip to the UK was part of my work trip, so i managed to save on the airfares. Again, a luxury here which can be removed if need be. For 2016 i am actually trying to plan a trip to the states just to settle some banking stuff as well as to check out my apartment over there.

If you are interested, you can take a look here, where i share some pictures from my trip http://www.casualtaketwo.blogspot.sg/

Personal Spending: $6,175.5
Expenditure which i incur solely. Eg: Office meals, personal shopping (yes, YNAB software comes in here), entertainment expenses (unfortunately these can't be done away unless i'm a hermit), personal dining expenses and other expenses related to weddings/baby showers/birthdays etc

Total personal annual expenses: $73,872.46 [or $6,156 per month]

Quite high, i truthfully admit, and the bulk of it pertains to the car expenses. However, if i DO give up on the car, what is my subsistence level of expenses?

YNAB provides me the option to easily select those categories which i will have to incur to just 'exist', and i came up with the below amount (inclusive of family groceries/houseshold expenses).

Definitely no car and no holidays!

Total essential expenses: $42,140.98   [$30,140.98 + $12,000 [family expenses]]

Works out to about  $3,500 a month.

Gives me a solid target to aim towards for passive income. Will write about my investments in another entry.

And before i forget, wishing one and all a prosperous happy new year!

Paleo lifestyle on a budget

Since using YNAB from the beginning of the year, i have generally budgeted $10 per lunch for myself. Most times i have kept way below my target, give and take some more expensive lunches due to occasions (friends/colleague  birthday/farewell/welcome etc). Also paleo meals are pretty expensive to adhere to.

For the uninitiated, the paleolithic diet, also know as the paleo diet or caveman diet, is a diet based on food human's ancient ancestors might eat, such as meats, nuts and berries. [source wiki]

This is generally to the exclusion of carbohydrates (rice and noodles) and diary products. Pretty hard to be satiated eating fish soup without rice all the time!

With the need to eat healthy and keeping to a budget, i am beginning to explore packing my own lunch occasionally. Viola! My lunch for next week.

1 Whole chicken from the roast counter at Cold Storage - $7.95

1 packet of salad at Cold Storage - $5.95

4 eggs, hard boiled - $2?

Total damage : $16 (rounded up because i will add some yummy spicy sriracha sauce!)

I split the above into 2 meals. Each lunch would then be $8. Within budget. 

I'm sure i can come up with more satisfying paleo lunches at cheaper rates. Let's see.

Going dutch

Titbit of the day - recently i asked my boss (who is a Dutch), where did the term 'going dutch' come from. It was only then did i realise it has a sort of derisory meaning to it. It could be that traditionally Dutch people are stereotyped as stingy and tight-fisted which is why it could have a negative connotation. Another saying is that because Dutch are traditionally very hard working people (stemming from a protestant culture), they watch each dollar that they spent carefully and do not want to waste anything.

For most of my life, i had assumed going dutch in a meal means splitting the bill equally. However, technically, it means just paying for what you order. So in a group setting, if someone orders a bottle of wine, and you are a non-alcoholic, you only pay for your food and not the wine. Same applies if someone ordered a dessert and you are on a diet and choose not to partake. You should not be made to pay for that.

I think this is a good thing - as it levels the financial playing field amongst people and allow everyone to have a good time while sticking to their own budget. You can enjoy the company of your friends in an expensive restaurant, but choose to order something that suits your wallet whilst your friends can order entree, first main, second main, dessert and wine if it so makes them happy. You then do not need feel obligated to split and 'subsidize' their meal if you choose a cheaper option.

Have you ever felt pressured to order a more expensive option to be in line with the rest of your friends (even though you are really on a budget) because you know that the group of friends you are with will almost certainly split the bill equally - so that, in Singaporean term, you do not 'lui gi' or lose out when it comes to settling the bill?

In an Asian context, i think it could be a 'face' or ego thing not to highlight the fact that maybe you did not eat the dessert, or did not order a drink, and just pay the same as the rest. Others may stereotype you as 'stingy' or 'calculative', or it could be that you yourself feel that others may view you so.

THAT is definitely not wallet-friendly. Maybe more so if you are a male and in a senior position, and you could feel the pressure to pay/treat the others or others could expect you to do that? That is enough of a damper to prevent you from hanging out often enough.














Or if the group of friends you are with somehow always wait for you to settle the bill first and conveniently 'forget' to pay you back? Are you the thick-skinned type to chase back the money?
[Actually i don't understand why people don't just take out the cash and immediately pay back the guy who paid first - is it so difficult?]

I'd be a downer if i didn't try to put out a few solutions, so here goes: -
(1) If you only ate a main, and the others have desserts - when the bill come, be the first  to pull out your cash and place it on the table, saying i only had a pasta, and this should cover it.

(2) If somehow you paid first and it's a group setting, send a broadcast message to the group detailing the amount to be paid, together with bank account details. People are not singled out and probably won't be offended with a 'debt collector'. Even then, some people are not 'automatic' enough to pay up, and that's when you need to personalized a collection message.

(3) Suggest an alternative place which is more wallet friendly

(4) Minimize hanging out with people who tend to order expensive stuffs and expect you to split bills equally. Either you join them in eating expensive stuff (and engage in a lose-lose war, lol)

There~ 4 solutions to help you stick to your budget, and still have some level of social life. [Actually i suggest option 4 if your friends do not understand if you have a budget to stick to. Those likely are not your true friends anyway].