Start Growing Wealth By Saving More

I had earlier shared what I learnt as my key ABC principles to grow my savings and wealth towards my financial goals, and I feel that it is important to expand on each principle and share what I had read, researched or done for myself. By elaborating more on my first principle on Ability to Save, I hope what I share will help in small ways for your journey of growing your savings and wealth. 🙂

Learning from those that come before us

I think our Asian values do enable us in our respective journeys to grow our savings and wealth. Values such as being frugal, living within our means, and saving for that rainy-day, are what I hear from and see my parents and grandparents live out. The behavioural changes I had to make for my financial goals at least were not foreign to me – painful yes, but not an alien concept altogether!

The Financially Independent, Retire Early (FIRE) movement has also provided a lot of inspiration for what might be possible for each of us, with many well documented blogs both in US and Singapore. However, it is important to find that right balance that we can each sustain. Being too extreme with any changes from the start will just leave us out of gas, and unable to persevere with the changes.

Where can we start with

One common example you might read about is the “Latte Effect”, or how buying your favourite caffe latte (or any drinks of choice) from your local cafe everyday might cost you a hefty amount every month. I must say it is okay to want to reward ourselves when we work so hard for our income. The key lies in reducing the frequency or replace with a cheaper alternative that gives us similar feeling of joy and satisfaction, without our wallets losing weight. 🙂

I started testing with my breakfast, and this was pre-Covid, since as long as I had some food and caffeine I will be good to start the day. I used to eat fried bee-hoon/noodles or nasi lemak regularly for breakfast and a cup of coffee from whichever coffeeshop or hawker centre I find myself in. These typically cost me $4-5 every weekday morning.

$20-$25 every week, that’s quite an amount in a year ($1040-$1300). My first change was to have my fried noodles every Tues and Thurs instead, and had my breakfast (bread with spread) on Mon-Wed-Fri instead. On top of that, I bought a pack of instant coffee to make for myself when I get into office. These changes brought down my weekly breakfast expenses down to $15, saving up to $10 per week or $520 per year.

Gradually over time, as I got used to the changes, I begun to have my breakfast at home as I prepared my kids’ breakfast before they head to school. I began to also choose healthier options such as wholegrain bread and granola, replaced the instant coffee with freeze-dried water-soluble coffee, and drank more water during the day at work or home. Besides eating healthier, my weekly breakfast expenses is now averaging around $7 – saving $18 per week or $936 per year! And this is just from adjusting my breakfast!

6 Simple steps to start saving a little everyday

It’s now your turn to try! Work on the following steps to start on your journey to increase your ability to save, growing not just your wealth and savings, and also possibly your health!

1. Take a piece of paper or notepad, and with a pencil or pen, draw 7 columns and indicate Monday to Sunday;
2. List down all your daily repeating expenses and the estimate cost for each expense;
3. Calculate your total repeating costs for the week;
4. Now, identify which of these repeating expenses are you willing to replace with a cheaper alternative or buy less often that will keep you almost as happy, and indicate the savings for each change;
5. Total up the amount you are able to save for the week, and think about what you can do with these savings for your financial goal when you stick with them through the months or years!
6. Start the next day, keep track of your savings, and persist for at least 4 weeks!

Start small, do not be too ambitious

Whoa whoa, some of you might start to feel hyped up upon seeing the savings you are able to achieve on paper and might start to jump into making deep changes to your weekly expenses (aka habits). There is a reason why new year resolutions rarely get carried out – the effort and willpower for an ambitious goal to succeed can be too much.

My suggestion is to start small, get used to 1-2 changes for a month or two, before working on the next 1-2 changes. Let your body and mind get used to these changes and the effect they might bring, especially if you are replacing or reducing expenses that have addictive effects e.g. sugared drinks or nicotine products.

It is important to acknowledge to yourself that new habits take time to form, while old habits similarly will take time to break. As long as you persevere with the change you want to achieve for yourself, you will get there eventually! 🙂

MrAmass