2014 is going to be a bleak financial year for most of us in .my due to recent price hikes in toll, electricity, petrol, and others. But most important changes is the introduction of Goods and Services Tax (GST), which will come into effect starting on April 1, 2015.
Hence, for us who are still living by paycheck to paycheck, is wise to spend wisely and aware of our purchases. Occasionally, due to work/life-related stress and idiocy or personality traits, we tend to succumb to temptation and spend impulsively. Which inevitably leads to buyer's remorse, causing more pressure and then the circle of pain continues.
Discussion at Reddit gave us a few tips on how to led a frugal life and don't easily spend away your money. Notable tips which inspired me.
1. Think over before making any purchase more than 100.
Divide it by 50 and you'll get the number of days for you to think over before making the purchase. For example an Iphone 5S 16G retail price is around 2,370. Divide that amount by 50 and you have 47 days to think through over whether you really want that mobile phone. Some may argue that you can pay by by credit card with zero interest installment. Well you can if you only going to buy that phone only and nothing else.
Furthermore, what you really need is a mobile phone. You may need a smart phone but do you really need an Iphone?
2. Don't go grocery shopping on empty stomach.
I will add that don't argue with significant other on empty stomach as well. Why ? Hunger depletes your willpower and you tends to say or make regrettable decision or purchases.
3. Buy quality items.
Redditor JarlesV3 offered a simple way to dictate his purchasing decision. Basically is how you intend to use the item. Is it for long term (durable) or just short while (consumable)? For the former, for example, if you run a lot, spend the best money you can on best running shoe for best comfort and to prevent injury. Be careful not to overpaying for brand rather than quality. For the later, spend more if you want quality and healthy food instead of instant noodle.
4. Money earned is hours worked.
Imagine you're earning 3,000 per month. After all the compulsory deductions, you nett pay is roughly around 2655. Divide that by 26 working days and basically you're earning 102 per day. Minus this amount with other expenditure like transport, rental, and others. You may end up with nett pay of 50 per day. Now if you want to buy that Iphone we mentioned just now, basically you've to work 47 days or 423 hours (if you work 9 hours per day) of your life just to afford that mobile phone.
5. 52-week money challenge.
Don't have enough money at year end to pay for your car insurance or vacation? Why not try this method. Start with first week, save 1. For the subsequent week, add 1 to the previous month. At the end of the year, you will save a surprising amount of 1,378. Or you can do the reverse way, start with 52 and start reducing 1 from previous month.
In short, be discipline and well aware of your spending. Know what you really need and what you want to resist any temptation.