Have you taken to searching for small change in sofas and trouser pockets by the end of the month? Do you starve the last few days of the month because you just don't have any more money left? If you're among the millennials who live from paycheck to paycheck, this is definitely the scenario playing out in your house every month. But why are we so broke all the time? Let us examine the top 10 reasons for this phenomenon:
1. You spend before saving
The moment your phone tells you that salary has been credited, you tend to go out and buy everything you ever wanted. You don't pause to think about saving for future needs.
Did you know that saving doesn't mean that you will be left with no money? In fact, it means you'll have more money for that proverbial rainy day. Heck, you might even need it in a few days if you decide to get married to your dream man or woman suddenly! So save as you spend (and not just through that cashback credit card), and start setting up an emergency fund.
2. You don't stick to your budget
Oh, you say you're one of those people who make a budget every month and still are broke every month? Of course lah, you're not sticking to your budget what! It's not enough to make a detailed budget every month. You also need to follow it as closely as possible.
And speaking of budgets, you also need to make practical ones, not ideal ones. Instead of suddenly cutting off the budget for all kinds of shopping, allow yourself a few dollars for emergency purchases (what will you do if your sandal breaks in the middle of a shopping mall, eh?).
3. You forget to think about essentials
Don't forget to include essential spends such as groceries in your monthly budget
While you might be making budgets for large expenses, you are forgetting to include the essential spends every month.
Sure, you earmarked 50 per cent of your income for expenses such as credit card bills, loan instalments, utility bills and house rent. But have you counted in your grocery purchases, breakfast expenses, and transport?
If you haven't, it's time to do so. Keep an amount aside for essential purchases so that you don't have to be miserly towards the end of the month. Store some money in a block of ice in your freezer if need be!
4. You can't say no
Friends WILL jio you to go to the movies every weekend. Your spouse WILL insist on going to a dinner out every weekend. Stop expecting people to stop inviting you for expensive ventures, and start saying no. If you think a certain expense is unnecessary, the onus of saving that money is on you, not on everyone else.
5. You have credit card dues
If you try your level best not to open a credit card for fear of the amount due, you're in bad waters, my friend. If you don't pay off your entire credit card bill every month, you are living beyond your means. Don't spend so much on your credit card that you cannot pay it back soon. You'll end up building the balance until it becomes an insurmountable debt.
Oh, and you're helping your bank make loads of money because banks charge an interest of 23 per cent to 29 per cent on any unpaid amount left over from the previous month.
6. You can't have fun without going out and spending
Do you think hanging out with friends at cafes and pubs and offering to pay every bill is the only way to have fun? Oh dear, you've got it all wrong. You CAN have fun without spending a cent! We discuss the ways to do it here.
7. You buy for brand rather than value
Branded clothes, watches, shoes, salon visits - do you really get great value out of it, or do you just want to tell people you shop posh? Spending money on valuable items, useful items or items that last longer - even if (actually, especially if!) they cost less or isn't a popular brand, is always better than buying for the sake of brand recognition.
8. You can't resist sales
Can't resist the crazy sales at Robinsons? Or is it the frequent Lazada sales that make you go weak in the knees? Whatever it is, impulsive shopping, especially checking out sales events, is a surefire step towards unnecessary spending. Remember Rebecca Bloomwood's dilemma about Gucci boots in the movie Confessions of a Shopaholic? So, do you need it or do you want it? You decide.
9. You are too cool to make coffee at home or take lunch to work
Seriously, you've got to make food at home instead of depending on restaurant or hawker fare all the time (unless your company gives you free lunch, haha). Making food at home and carrying it to work can save you a lot of money towards the end of the month. Cooking at home is also so much healthier. You don't need to be a whiz cook to make food at home - here are some simple recipes for much-loved Singaporean dishes.
10. You learn nothing from articles like these
Well, you reached the end of this article, but how much of it do you actually intend to practice? Instead of simply reading hundreds of articles about money management, start making notes for yourself and putting ideas into practice one by one.
Still staring at this page? Go and start your new-and-improved savings plan!
This article was first published on BankBazaar.sg.