Cost of Living, Money, and Budgeting

Via HN. Interesting data on cost of living in Kuala Lumpur, Malaysia. While the data still cannot accurately reflect the the exact cost (example is renting a room instead of an apartment), the figure are good enough to serve as a baseline for budgeting.

On a related note, due to a bizarre incident at workplace, I had a long discussion with Mrs Hippo regarding our current financial situation and goals, both short-term and long-term. Different financial personalities, if not handled carefully, can be a relationship wrecker. Especially when one partner is an investor/spender and another a debtor.

The funny thing I noticed, when comes to money, the more you earn, the more you spend. Is like alternative version of Parkinson's Law, "Money spent so as to use the cash available for its fulfillment." Why so ? Lack of awareness. If you don't keep a budget, keep track, and monitor your spending, surely by the end of the month, you must be wondering where have all your money gone to?

How should we solve this? First, create awareness. How ? Develop a daily habit of tracking your spending. As the old saying, "You can't optimize what you can't measure". Start tracking your daily spending in any possible forms (electronic or pen and paper). The moment you spend on something, just jot it down. No blame and no judgement.

While you're doing that, unless necessary, start paying with cash instead of credit card. Having a plastic card change my spending habit. We started to eat out more and buy more unnecessary stuff impulsively (books, books, and books). For me, credit card should be used solely for one reason. Emergency. Example is making initial payment before admitting to hospital.

Once you develop that habit, you will start to spend less. While spending less money is the opposite of earning more money, both achieve the same result, your financial well-being. Having aware of your spending, you can start budgeting and if possible, automate your money allocation. After that, when you feel to be in control of your financial situation, start spending your extra money the right way to seek happiness.

My past experience has shown that is easy to create awareness but damn hard to sustain the habit. Change is always painful and is our tendency to avoid pain. Better suffer now rather than later. I foresee our economic is going downhill and the cost of living is rising in this coming years. Life is going to be tough, especially at my gaining age.

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