Inspired Post, part about action and proscrastination, part about finances.

Drawing-down and Personal expenses

As I am heading into my 5th month of unemployment, looking at how my 30k reserve living expense account has gone down quite a bit, about $9k so far. I do know that NOT all of the $9k is pure consumption. I know I have courses going on, bought some new clothes, did hair and stuff. But cos I did lag behind in my daily expense tracking which I did for about 2.5months dilligently, hence I can retrace back and get some figures to work out an average.

Lemme show ya how I work backwards,
To get the exact amount I spent, I took my recent current amount. Take $30k minus current amount = $8819.34

Then I worked to get the big expenses that I can remember in this 4 & 3/4 months, so
Driving course => $1160.62
Guitar => $680
Jap course => $357
Clothing (bra, cosplay jacket, 2 x 3/4 pants, contact lens, new basic makeup, epillator) => $501
2 Hair cuts and 1 dye => 152.50
Wedding ang baos => $296
Mom (last pocket money until i get perm job) => $800
HP (monthly x 5 mths, $90 hp upgrade => $255
Internet => $150
Cable tv (sub and installation) => $ 110
Others RO machine repair => $80

K now with these figures,
I can approximate that I spent $4541.62 on all these.
Then $8819.34 - $4541.62 = $4277.72 on transport and mainly food and other misc expenses.
Which works out to $4277.72/5 = $855.55.
So if transport is about $100 per mth, it means on average about $755.55.
Which can work out to be $755.55/30 = $25 on food and misc.

Now cos I have been saving $2 notes in my piggy bank to help squirrel away and ensure I 'save' what I have drawn out for spending. Saved $700. WHICH I banked into the other bank account that is for shares and investment, not in my spending/reserve account.

The actual draw-down is $8819.34 - $700 = $8119.34
I also realized that among the bigger categories, there are some which are really ONCE-OFF, not a constant expenditure, eg driving, jap, clothings, wedding, mom final allowance, and RO repair. SO to get a truer picture of my expenses, I would only subtract these categories. Cos some course might end soon and is rather short-term, not something I would do longer term.

therefore => $8119.35 - $3194.12 = $4925.23 for my usual expenses and outings.
per month => $4925.23 / 5 = $$985.05
per day => $985.05 / 30 = $32.85

This amount is a bit too high for my current $0 income status. Hence I have decided to draw it down further into $20 per day region. If I can do that, my monthly would roughly reach $600, which is more comfortable.

NOW the NEXT step is to actually JUST DO IT and adhere as much as I can, on as many days I can to hit this target. Cos only concrete action in small steps can help me achieve this target. No one is going to give me money. Though my shares might give me some gains BUT when I dont sell, there is STILL 0 income. So I need to really reduce the drawings on my reserve. Previously I thought I could keep expenditure to about $600 a month. But this little exercise showed me very concretly I need to cut my eating out in cafes/restaurants and eat more hawker, food court, reduce outings to a more manageable number, not like 3-5 times a week, everytime eating out with a meal about $17 - $20. Ya so I would like to eat in less expensive areas and also find cheaper ways of hanging out IF I have to.

So dont be surprised IF I suggest food court lunch/dinner, or something below $10 but filling.

(Now I wish to clarify that I reveal ACTUAL expenditure amounts NOT to show I am better at saving, better at money, have low expenditure etc etc, but to help those who are interested, to see HOW exactly to work out monthly expense, daily, etc)
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Proscratination and Action

After JLPT and Melaka trip, I actually proscrastinated quite a bit in my job search. So by the time I finally looked through the Sat and Sun Recruits which I had put ON my table, some jobs (including teaching abroad, teaching at a tuition centre quite near my place) were CLOSED. Shit!!!!!!!!!!!!!!!

Plus prior to Christmas and New Year, there was one week, I sent out resumes on Sunday, by mon/tue, I got interviews. Well though in the end, I screwed up some, some were too low offers and etc... I saw how some extra action on my part yielded something.

So after New Year, I promptly collected the Recruits, looked through, cut out, customise and send resume by Sunday evening. On monday still didnt hear anything, so I headed to work. By monday evening, got one email. On Tue, I went to flexi-work and got 2 calls for interviews. Just checked mail, got one more interview next week. One is supposed to call back for another interview. Hence though I havent scored any offers yet, I have gone for one interview today. Tomorrow there's one. Next wed, there's one. So more chances of interviews, more for me to polish up and hope to score better offer.

Plans broken into steps and Action in SMALL do-able steps do yield results.

Just like making sure I exercise 2-3 times a week also yielded weight loss, at least up until before the christmas and new year eating and drinking binge.

I want to maintain and build up this spirit of actually DOING things in steps gradually than to just think about or wait. It somewhat works for me, whether success or not, but its still better than doing nothing and waiting.
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Tab was asking me about credit card payment for interest-free plans. Hmm.. I really have no idea HOW and WHEN exactly I know so much, but I shared what I know with her.

Its interest-free cos if Kenko package $1.2k over 12 months,

using credit card instalment meant $100 a month. If you pay promptly in full every month, you will end up paying $1.2k in 12 months. U get a loan of $1.2k and u paid $1.2k. HENCE interest-free in essence.

NOW what can go wrong with this picture?
Pls remember that credit card companies, unlike HDB loans, WANTS you NOT to pay fully.

How does it do this?
Simple. Your credit card bill monthly allows u to pay minimum and/or any amount u want. It is easy to just pay minimum. Eg $50 minimum (but $0 is paid to reduce principal amount owed)

Compare this to a statement from HDB loan which states eg $550 for 60 months (which a portion actually pays off the principal sum and part of it is interest) so IF I dilligently pay $550 for 60 months, I can actually reduce my debt to $0.

BUT for the case of the credit card, what happens is the 2 things.

FIRST thing, I paid $50 instead of $100 for 1st month.
It meant the debt start accumulating interest of 2% per month.
It meant on 2nd month, I owe now $100 + $50(debt) + $1(charge) = $151
If I still pay minimum $50 in 2nd month,
It meant on 3rd month, I owe $50 + $151(debt) + $3(charge) = $204.

Now up until now, it seems rather low cos its still in the hundreds. Watch what happens next.

4th month, $50 + $204(debt) + $4.10(charge) = $258

5th month, $50 + $258(debt) + $5.16(charge) = $343.16

6th month, $50 + $343.16(debt) + $6.86(charge) = $400

7th month, $50 + $400(debt) + $8(charge) = $458

8th month, $50 + $458(debt) + $9.16(charge) = $517.16

9th month, $50 + $517.16(debt) + $10.34(charge) = $577.50

10th month, $50 + $577.50(debt) + $11.55(charge) = $639.05

11th month, $50 + $639.05(debt) + $12.78(charge) = $701.83

12th month, $50 + $701.83(debt) + $14.03(charge) = $765.87

Which now got to a rather BIG sum that you are suddenly faced with in Dec when you see your statement.

Remember u had paid $50x12 = $600 already but you still owe $765.87 which meant, instead of paying interest-free(which u had initially wanted/planned when U signed up) u end up paying $600 + $765.87 = $1365.87, an extra $166. Now THIS is assuming you pay off the lump sum of $765.87 in full in Dec. BUT if you didnt, then it continues to roll and as u can see, it can get bigger, exactly because NO PRINCIPAL REPAYMENT and it rolls over due to HIGH INTEREST COMPOUNDING.

SECOND thing that happens, if u start paying minimum. You forget that you had actually PLANNED to put aside $100 a month to pay off. So now cos you only paid $50, you somehow 'forget' that you had spent $100 a month effectively. Then u might go and sign up other stuff... Its like u 'feel' $50 richer cos u paid for something that is worth $100 but u only pay $50. So u might go out and spend extra $50. Effectively, it meant u spent $150, not on the same thing, but it meant u spend more overall.

Last thing, it requires quite clear monitoring of monthly statements (but just have to) to ensure that u pay dilligently and not let it roll. Can be easy to forget given we receive so many statements from bills, bank accs, credit cards, insurance, etc etc etc. Its easy to lose track even for me, given all the bills and stuff. A trick for me is to put all the envelops addressed to me at a part of my table. YES I have a messy table but on it, there is a part where I put my envelopes and open it at a go once or twice a month. I even open, put bills together, then pay at one go when all the bills are in. But at times its easy to overwhelm,

so more so for credit cards. The fewer cards the better, the fewer statements, fewer overdue, fewer compounding on outstanding debt, fewer chance of missing payments. Yes, definitely fewer points. BUT if you ask me about points which maybe redeem something $100 worth or interest charge of $166(above example), I take fewer points ANYTIME.

Dunno about the rest. I get overwhelm even monitoring my bank accs in passbook, insurances, poems statment. And this is me WITHOUT a credit card. Now if I have 1-2, it meant additional statements, but at least not that many more to monitor.

Hope this helps. I still have many thoughts about personal finances that I want to blog about. But today is really a LOOOONNNNGGGG day. Really battery flat. Next post, I will discuss 'phantom' money, overspending or not, and maybe some pointers/ or small action steps that can be done to help out.