Saving

Dear Andrew Hingston,

Going through the component on 'saving', I've learnt a lot and managed to put some of the very good tips on saving in practice.

The first thing I found particularly interesting was that the term 'saving' only applied to limited circumstances. Most of what I thought saving to be previously was really deferred spending! And even leaving money in my transaction account didn't count as saving; only putting money in my Commonwealth Netbank account (with higher interest returns) did. I always thought it a hassle to keep transferring money from my Netbank to my accessible bank account, but now I realize that the interest generated in the former is much better for me.

Besides that, I think the saving tips were practical and did work! The first one I tried was delaying buying stuff that I wanted for 2 weeks (as mentioned in the previous post). After a week, I no longer feel the desire to go out and buy the clothes that I had wanted.

"Save little and save often" was another great tip from the book. Long-term regular savings is actually not that difficult! I have already planned to channel at least 10% of my income in the period of these 3 months towards savings in Netbank, and possibly open a fixed deposit account if I garner enough funds to merit one. And of course, I'm starting to save in small ways; for example after a week of noting down my expenditure in the expense tracker, I've realized that I spend quite a fair bit on drinks - $4 for coffee, $5 for a Boost juice... etc. And this happened almost daily. I didn't realize that I was spending that much really, and I decided to pull back on that this week. And I'm going alright so far.

On a side note, the expense tracker helps to keep my spending in check. Every time I want to spend on something, I remember that I have to note it down in that spreadsheet, and the desire to buy just for fun dissipates in a snap; to be replaced by a sense of unwillingness to see money flowing out of my account. I might just consider continuing to track my spending even after this course. It has its benefits!

In terms of other tips I've tried, I've incorporated bringing lunch to work from home into my lifestyle, and realized it's pretty easy (and healthier!) to do this. Great way to save up to $40 bucks a week!

I think the take-away message is to save consistently, save where possible, and save reasonably (i.e. not until i can't have any fun at all). In my first year in university, I kept an expense tracker of my own making, but I became more stressed because my savings goal was a bit too unrealistic. It didn't allow me to have much fun; movies, eating out at nice restaurants, and transport seemed too expensive, so I cut them out of my lifestyle. Eventually, I gave up because it was quite depressing. Now, I don't plan to repeat that mistake, and instead save in smaller amounts. It's better than giving up anyway.

Til next time.