IT MAY not hurt your pocket to pay $6.50 for an ice-blended mocca.
But do this every day and you will spend $2,372 in a year and a staggering $23,720 in a decade.
Wake up and smell the coffee because if you invest this hefty sum, the results will get your blood pumping more than a caffeine hit.
Being prudent with your finances does not mean doing away with every indulgence. In most cases, it is a matter of working out your priorities. With proper planning and budgeting, you may be able to still drink good coffee and grin at your financial position.
Here are some tips on saving:
Pay yourself first
Put aside a portion of your pay and re-adjust this figure as personal circumstances change. Start with a savings target that you are comfortable with and move the bar higher as you progress.
Draw up a budget and stick to it
Having a budget helps to keep track of your spending. Expenses typically fall into the categories of personal (entertainment), work (meals, transport) and living (parents' allowances, medical). A budget enables you to identify the areas in which you may be overspending so you can take action and trim it.
Use credit cards sparingly
If you don't use credit cards, you won't be in danger of spending money you don't have. Use credit cards for big-ticket items like paying for that flat-panel television set or overseas accommodation.
Live below your means
This involves spending less than what you make. Figure out your needs from your wants and desires and prioritise them.
Find cheaper groceries
Buying 'no frills' house brands available in supermarkets such as NTUC FairPrice can help keep costs down.
Save fancy meals for special occasions
A meal in a fancy restaurant need not be an everyday affair. From time to time, make your own sandwich lunch. It costs less and is healthier too.
Avoid paying penalty fees
Keep a close watch on administrative penalties such as late fees and fees for bounced cheques.
Arrange for automatic deductions of your pay
Wherever possible, have the portion that you wish to save automatically deducted from your monthly pay into a savings account.
Save your extra income
This includes pay increments, bonuses, refunds or rebates. Use them to pay off debts and place some in your savings.
Saving via savings plans
Make use of schemes that force you to save regularly. These include insurance plans like whole life, endowment and investment-linked policies, as well as non-insurance related plans that feed into investment portfolios.
