Happy New Year, have you written down your New Year’s resolutions yet? I’m in the midst of doing mine. Well, I roughly know what will go on the list already but to “keep it real”, I need to put it all onto paper and make a PLAN! Yes yes, worklife (oops I mean work-life … you see, I can’t even split the 2 words up) balance is definitely up there.
As you know, TOHTMYM is generally about managing your money….and so far I’ve been blabbing on about investments and the options available. But I have many friends who moan to me all the time about how they cannot invest because they’re clearing off debt, or how they cannot save on their meagre salaries!!! These are folks in their early to mid thirties. My friend Nance got caught in the debt trap because she said they lived a paltry existence, up until her first credit card was approved! Then, BOOM! all hell broke loose
and she started to live it up, buying white goods for the household (she lives with her parents still), partying every weekend with friends and eating out, buying little nice ‘bajus’ and trinkets for herself. Yet another friend, Peter told me that his RM10k+ salary wasn’t enough because he had a lifestyle to maintain…which included paying off his BMW and condo, and weekend binges at the latest trendy bars in town. Still another friend, Myra said to me “I’ve got everything that I need. I’ve almost paid off all my home loan. I don’t need anything else. I will use my money for travelling instead”. On and on it goes, different people with countless reasons why they haven’t started saving for their future. And then, because they know that I’ll start to (ever so-gently :) ) get on their case about it, they give me a guilty look and say “I plan to start though”. (tsk! tsk!)
I’m sure many of you know someone like my friends above. Saving money seems to have gone out of fashion in the world we live in. Maybe we’re all too caught up in the material world (cue Madonna) these days, and it’s ever so easy with just a swipe of the card to build that fantasy life that we so aspire for. Maybe it’s peer pressure – everyone else is having fun, everyone is driving a cool snazzy car…why shouldn’t I too!! I must admit, my own particular weakness has always been buying CD’s, books and DVD’s (legitimate la!!!) and I am partial to the odd marathon shopping spree at ZaraMNGTopShop(thank God H&M and Bershka have yet to make their way to our shores!!).
Another friend of mine, Chloe (The Chronic Consumer) buys an average of one gadget every two months…iMac, Nokia N-whutevalatestmodel, notebook, plasma TV, notebook again, blackberry, ipod (coming soon!). What do you do when the world around you is about consuming? Even the government wants us to constantly consume “It’s good for the economy”…as evidenced by the stimulants offered in Budget 2008.
So taking stock of the world we live in, here briefly are some reasons why I think that cultivating the savings habit and committing to it is a very good thing if you’re still coming up with your 2008 list:
1) It makes you self-reliant in your older years – no hand-outs needed from parents, friends, family. No burden to society.
2) You are in control of your life and you will probably feel less stressed, guilty etc etc
3) You learn to appreciate the small and simple things in life…taking a walk, hanging out with friends, playing with small kids (substitute with pet if no kids) :)
4) It’s good for the soul!! This is especially true if instead of consuming, we learn to create. So next time, you get the urge to consume (buy things, watch TV, buy yet another CD), maybe you should think…what can I draw, build, write (like keeping a blog for example!)…
5) If you are faced with a major expenditure eg a loved one falls sick or your boss gives you so much sh*t that you think “enough is enough”, you can handle it
6) You can give some to charity and make the world a better place
7) Very importantly….the younger you start saving, the more you save!!! Remember the 8th wonder of the world as touted by Einstein? The power of compound interest means that over a longer period of time, what money you tuck away in your kitty today will be worth more. So it doesn’t matter if it’s just RM100 or RM200 or even RM50 a month. Just start!!!
Last but not least,
8 ) Add your own reasons just for good measure!
Need more inspiration/challenge? Here’s an article that I lifted from Tim Ferriss (of The 4-hour Workweek fame) ‘s blog:
Princeton friends John Perry and Sarah Pelmas had debated repeatedly with their San Francisco buddies about the impact of the U.S. consumer lifestyle on the planet and on their own quality of life. In late 2005, they decided to do something about it: The 10 friends challenged each other to see if they could all go through the whole of 2006 without buying anything new.
The group called themselves The Compact, after the Mayflower Compact, and pledged that for the entire year, they would purchase secondhand or borrow everything they needed, except for food and essentials like toiletries and medicine.
“We thought that if we stopped participating in the cycle of disposable consumption and empty shopping, we could tread a little more lightly on the planet,” says Perry, a communications director at a high-tech company, who majored in English at Princeton.
Sounds hard? They say it wasn’t. They shopped less overall and got creative when they needed specific items. They reserved “shopping” for times when there was something they really couldn’t do without. When Perry needed a pressure cooker to prepare vegetarian dishes for his partner and their two children, he found a used one on the Internet. Pelmas and her husband, who are renovating their home, found secondhand appliances and recycled wood for baseboards and cabinets. But they were stumped by how to find used nails, screws, and hinges, and broke down and bought them new instead — the only time they cheated. Pelmas also struggled with finding sports sunglasses for rowing. Never able to find a used pair, she taped up her old ones and kept using them instead.
“It seems impossible and daunting, but it really isn’t,” says Pelmas, who studied English and creative writing at Princeton and now works as a school administrator. One of the benefits of ditching recreational shopping was more time for friends and family. “It’s completely changed the way we look at things,” Pelmas says. “Most things don’t seem necessary anymore.”
The Compact unexpectedly morphed into a national — and international — phenomenon after the media in San Francisco caught wind of the project. Before the year was out, stories about it had run in dozens of U.S. and international media outlets. The Compactors started hearing from people around the country and around the world, including environmentalists and people concerned about global warming, but also from parents worried that their children were becoming too materialistic, and people troubled by the consequences of U.S. oil dependency.
About 8,000 people have joined the e-mail list The Compact created to discuss the project, and groups modeled after The Compact have sprouted in 38 communities across the United States and in countries including Romania, New Zealand, and Japan. You can read more about The Compact on its blog at sfcompact.blogspot.com.
The project was supposed to wind down at the end of 2006, but Perry and Pelmas plan to continue living in the spirit of The Compact. “When you stop engaging in ‘retail therapy,’ you realize how much you have and how little you really need,” Perry said.
By E.B. Boyd ’89
E.B. Boyd ’89 is a freelance writer in San Francisco.