Sometimes, It's the Money You Didn’t Spend that Counts

14 Dec 2014 
SOURCE: Wong Sui Jau

​I bet most people bemoan not having enough money. Few people are ever in a position in which they claim that they have more than enough money and wouldn’t want more. That’s why so many of us want to invest. And indeed, investing will help to grow your wealth. Money that is invested is money which is working for you 24 hours a day, 7 days a week.

In contrast, debts, whether from credit cards, car loans, renovations loans are all draining money from you constantly. Before you even start investing, clear your short terms debts first. And sometimes, the best way is to not even incur them in the first place, so very often, it’s the money that you didn’t spend that will form the base capital for your investments.
We live in a materialistic society and it is almost impossible to keep away from spending. The key is moderation, and to be aware of your expenses so that you don’t spend more than what you can afford. In today’s world, where credit cards are readily available, and where there are many purchases which allow for installment repayments, awareness of how much you are spending is very important.
Furniture, and electronic items which allow 12 months or even 24 months repayment periods should not be seen in terms of their monthly cost. In the end, the total cost is what you will eventually pay, even if you get to pay that over 12 months instead of straight away. If a person couldn’t save up that money to pay it off right away to begin with, he may not be able to adjust his spending downwards in the subsequent 12 months for it either.
A car is one of the biggest-ticket items that you can spend your money on. So, be very careful when you are thinking of buying a car. It’s not just the upfront cash you may have to fork out, or even the monthly car installment payments, which are substantial. There is also petrol, parking fees, maintenance, road tax, ERP, car insurance, to name the most common costs. All these could easily add up to a few hundred dollars as well depending on the type of car you purchase. Personally, I believe I have managed to save a substantial amount of money simply because I did not buy a car the minute I started working. I still take the MRT to work and back every day.
Especially at the initial stage of building up your wealth, saving is very important. So, be aware of the big ticket items. Be it an extravagant wedding, expensive furniture, electronics, a car, sometimes, it’s the money you didn’t spend that will be key.

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