5 Ways to Curb the Urge to Splurge

One lady is looking crazedly at a pair of socks. She has an overwhelming urge to splurge.

The Urge to Splurge is Real

Do you lament purchases on tons of things you don’t need? Do you resolve not to do it again, only to repeat the same the following month? You might have a spending problem. As the first step, acknowledging that you have a problem is the first step. And as any problems go, they are solvable as well.

Make a list

Rather than walking around aimlessly and buying every single thing you see, a physical list forces you to focus on your intended purchases. Furthermore, the list will help you plan your purchases, especially when you have access to the cost of those things. This way, you can budget your money and be entirely conscious about the cost of things that you intend to buy. Discipline is key to reduce the urge to shop compulsively.

Bring your friends and family

Having someone who can you keep in check will be immensely useful. This person could be anyone, but most important it’s someone who doesn’t enable reckless purchases. Tell your friend or family to be strict with you and to stop you from purchases that you don’t need. Two heads are better than one, it’s much better to have someone to intervene if you’re going out of line.

Identify the triggers

Impulsive or reckless spending is usually a symptom of a larger problem. One of the most common reasons for that urge to splurge is boredom, which can be addressed by picking up a hobby. Another reason is stress, which results in the popular term “retail therapy”. Emotional shopping is anything but therapeutic – at best it is a bad habit and at worst it is an addiction. It also leads to accumulation of unneeded purchases, clogging up your house. Alleviate stress via other means like exercising. The upside is that you keep yourself healthy as well.

Remove temptations

On top of avoiding the triggers, it is important to remove physical temptations. For example. having a credit card is useful but it is also an enabler when you are out there shopping. As such, leaving your credit card at home and bringing out only cash forces you to focus on the purchases at hand and nothing else. At home, remove all credit card details from your online shopping sites from your computer. Uninstall all of your favorite shopping apps on your phone. This will ensure that you won’t carelessly browse for products on apps, e.g., Carousell, Lazada, etc when you’re bored and end up purchasing something. Unsubscribe from mailing lists as well – take control and avoid sales emails.

Wait it out

Making the conscious effort to sit on them helps. For large ticket purchases, it is all the more important to get feedback from your friends and family. That way, you can take the time to weigh out the pros and cons of the things that you were thinking of buying. Most of the time, you will realise that the bag you were eyeing wasn’t as pretty as you thought it was. Or perhaps, that vacuum cleaner that you thought was useful wasn’t as suitable for your home after all.

That’s all folks!

Know anyone who spends recklessly and has immense urge to splurge? Reach out to them – you will be doing them a huge favor. It’s too late if they fall into a large debt that they can never recover from. Forwarding and sharing is caring 😉 Let us know what you’d like read about on our Facebook page!

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Scientists Moonlight as Financial Planning Entrepreneurs

SINGAPORE — If you are busy pursuing a doctorate, would you still work as a street promoter on the weekends? This guy will.

Every weekend, Mr Jackie Tan, 28, a PhD candidate in biology at Nanyang Technological University, heads out to Orchard Road and neighbourhood estates to meet people on the streets to spread awareness about his financial planning website www.fundMyLife.co.

“There is nothing to be ‘paiseh’ (Hokkien term for embarrassed) about, even if I am a PhD candidate and I promote my product on the streets. Having a PhD just means you slog in school for four to five years more than other people,” he said.

Indeed, Mr Tan sees many similarities between being a scientist and an entrepreneur.

“The failure in the tests made during our research helps me build myself as a person. This to me is similar to the tenacity needed in an entrepreneur who often gets doors shut in his face.”

On weekdays, after lab or classwork, the student scientist spends his evenings working on the website or meeting the stakeholders in the start-up, sacrificing leisure time and even sleep.

“Having no time as an excuse is a weak reason,” he said. “Nothing good in life comes without a certain amount of sacrifice.”

As the co-founder of a financial planning portal, Mr Tan certainly walks the talk. A regimental money-saving machine, he hardly takes taxis, often cooks his own meals and goes for vegetarian food when he eats out because it is cheaper. He does not hold any credit cards, has no debts and has enough savings for a “rainy day”.

This dogged determination — juggling a career as a scientist and a separate business — followed a family tragedy when Mr Tan was just 17. His father died of lung cancer after his family was unable to afford the treatment because the insurance bought was unsuitable. The harsh reality drove Mr Tan to work hard in school. He gained entrance into the Faculty of Science at the National University of Singapore, but had to work his way through university by taking on part-time jobs in labs and giving tuition.

The importance of good financial planning became a key principle that drove Mr Tan to go beyond his academic focus to help others in this area. Mr Tan and his co-founders — Mr Wesley Goi, 30, a PhD candidate in bacterial metagenomics at the National University of Singapore and Mr Matthew Lim, 33, a digital marketer and financial consultant — started developing the fundMyLife website last year and launched it in January this year.

The trio had pooled their own savings and tech expertise to create the portal. Mr Goi, who taught himself coding, created the artificial intelligence platform that processes questions from customers and connects them to financial advisers.

Besides directing customers to financial advisers best suited to their needs, fundMyLife also builds awareness of financial planning through conducting workshops. Although it has been operating for only six months, it has already turned profitable, with its user base growing 10 to 30 per cent month-on-month and revenue rising 30 to 50 per cent. fundMyLife declined to give absolute numbers.

The business is getting more traction. Last week, fundMyLife held a financial literacy workshop for about 100 union members from the National Trades Union Congress. It is also looking to expand into Malaysia by the end of the year.

Mr Tan also wants to help individuals and groups in society who are under-served, including single parents.

For now, Mr Tan has no intention of quitting his day job, saying it helps support the business as a “buffer”. He added that there is no conflict of interest between his research studies and his business as work on the latter is done during his spare time.

“Call it a cop-out, but I would like to think of it as keeping my options open. Furthermore, if doing a PhD gives me the attitude and mental resilience, doing a start-up provides me with soft skills. These are complementary in developing myself as an all-rounded individual in either career,” he said

“People are usually afraid to try because they are afraid of failure and hence are usually less exposed to failing. When I fail, I let go and move on,” he added.


 

This article first appeared on Today Online

Is That Coffee Killing Your Savings? Yes It Is.

A cup of milk is being poured into a cup of milk, with the caption asking whether is coffee killing your savings?

Written by Kartik Goyal, edited by Jackie Tan. This article is a part of a special series by fundMyLife content marketing interns from QLC.io

Coffee killing your savings? No way.

Have you ever woken up to an empty wallet and a depreciating bank balance, in the middle of the month, wondering where all that money went? The culprit might be that seemingly harmless cup of coffee. While research suggests that too much coffee can kill your heart, too much of coffee will kill your wallet as well.

According to a recent study published by Euromonitor, café hopping culture has been fueled by the rapid increase in the number of indie cafés in Singapore and by the change in perception of students and working adults, who see an SGD 6 coffee as reasonable. Elison Lim, Assistant Professor at the Nanyang Business School, attributes this trend to the onset of social media phenomenon such as “Instagrammable” food, hashtags, and the conversion of coffee from a stimulant to an obsession.

The Cost of Coffee

However, it is highly unlikely for someone to imagine the impact of this little item on the wallet. Data gathered from multiple sources indicates that coffee and milk form the most expensive ingredients of a coffee and yet it costs a fraction of what you pay for it in a store. On average, a cup of cappuccino costs SGD 5 to SGD 8 in a café. Whereas, it costs around SGD 1.76 to make one at home.

The graphs and calculations below might shed light on how much you might be spending.

A table showing the breakdown of how much one spends when making a cup of cappuccino at home
Here’s how much you spend when you make a cup of cappuccino at home.

What happens if we express the components in a pie chart?

A pie chart that breaks down the percentage of things in a cup of coffee
That’s right. We made this into a pie chart of components in a cup of cappuccino to go with the coffee.

Why is coffee priced so exorbitantly in a cafe?

Interestingly, the real value added by cafes is not in the coffee itself, but in the ambience, presentation and experience they provide. Employees, electricity, water, plush furniture and luxurious interiors cost money, not to mention the profit margins of the business owner, which add significantly to the price. It is no surprise that businesses claim they aren’t in the coffee business but rather in the experience business.

How much do you save from DIY coffee?

If you’re up for just the coffee alone, it makes more sense to DIY. Replacing a single cup of coffee, every week, with a cheaper alternative can reduce your expenditure by up to SGD 220 in the course of a year. Anyone willing to substitute their lunch coffee can save close to SGD 1500 in a year.

Once again we did some maths to see how much you can save based on your drinking frequency.

A table showing the amount of money saved if one switches to DIY coffee.
Your addiction could cost you more than you think. Conversely, managing that addiction properly can leave you not just happy and productive, but not broke as well.

To put into perspective, even if you drink coffee once a day, you’d be saving more than SGD1,500 per year if you DIY it.

Sweet ass graph showing some sweet savings when you switch DIY
A graph illustrating the difference in amount saved over 5 years when an alternative is chosen

Astonishingly, the figures become even more pronounced once we take into account the impact these expenses have in the long term. Replacing just one coffee a day, with a cheaper alternative can, potentially, save you around SGD 7,700 over the course of five years. While, it’s certainly difficult to avoid every coffee date, being mindful of the impact of small expenses on your budget can have a huge impact on your spending and saving habits. After all, the devil is in the details.

Only 1 out of 10 Adults Got This Personal Finance Quiz 100% Right [Survey Insights]

Adulting is hard

Chances are, when you graduated from school, you were not prepared for the working world nor handling your personal finance.

Out of curiosity, the fundMyLife team went out to conduct a classic personal finance quiz that tests financial literacy. Standard & Poor’s, Gallup, World Bank, and George Washington University created this quiz, and conducted it on 150,000 people. Composed of five questions, this quiz tests basic concepts such as interest rates, investments, inflation, etc. Surprisingly, only 1/3 of the world passed this test. We quizzed people in places like Orchard Road and Ang Mo Kio to see how financially well-informed people were. You can take the quiz here too: https://goo.gl/forms/pHJv64Zead4b1Ci73

Personal Finance Quiz Results

Question 1: Suppose you have some money. Is it safer to put your money into one business or investment, or into multiple businesses or investments?

What it tests: risk diversification.

Personal finance quiz result 1: Piechart shows that 57.5% said to invest in multiple businesses or investments and 42.5% says to invest in only one
Results from the first question on risk diversification

Correct answer: multiple businesses or investments.

Reason: As the popular saying goes, it’s not good to put all your eggs in one basket lest that basket falls and breaks all your eggs. Intuitively speaking, if you spread your money across different businesses or investments you’d have more buffer against badly performing businesses or investments.

Question 2: Suppose over the next 10 years the prices of the things you buy double. If your income also doubles, will you be able to buy less than you can buy today, the same as you can buy today, or more than you can buy today?

What it tests: understanding of inflation

Piechart showing three different percentages

Correct answer: the same as you can buy today.

Reason: Surprise, surprise! Why is this so? Assuming you earn $10 today, and that bread you love costs $10 as well. It goes that you can (unfortunately) only buy one. Ten years on, for the same work you earned $20. However, the cost of that bread you love doubled as well to $20. That means, you’d still only be able to buy one of that bread. Such is inflation.

Question 3: Suppose you need to borrow $100. Which is the lower amount to pay back: $105 or $100 + 3% interest?

What it tests: understanding simple interest rate.

55% of those surveyed answered correctly while 45% answered wrongly

Correct answer: $100 + 3%

Reason: $100 + 3% = $103…which is less than $105.

Question 4: Suppose you put money in the bank for two years and the bank agrees to add 15% per year to your account. Will the bank:

  1. Add more money to your account the second year that it did the first year
  2. Add the same amount of money both years

What it tests: understanding of compound interest

Piechart showing the results. Majority of the ones surveyed answered correctly.

Correct answer: more money

Reason: As the urban legend goes, Albert Einstein is said to have declared compound interest as one of the world’s greatest inventions. While the story sounds a bit unreal, the power of compound interest is anything but. It is the force behind both struggling credit card owners and successful investors.

Question 5: Suppose you had 100 dollars in a savings account and the bank adds 10 percent per year to the account. How much money would you have in the account after five years if you did not remove any money from the account?

What it tests: understanding of compound interest

Results show an interesting mix of different answers to question 5 - 65% said more than $150, 17.5% exactly $150, and 17.5% less than $150

Correct answer: more than 150 dollars

Reason: In the first year, you’d get $10 (10%) for a total of $110, and in the second you’d get $11.10 (10% of $110) for a total of $121.10. At the end of five years, you’d have $161.50 at the end of five years.

That’s all folks! I hope you all got 5/5 for this.

The results of this personal finance quiz is more or less consistent with what’s published in the recent years regarding Singaporeans’ level of financial literacy. We understand that it’s quite daunting to figure things out by yourself so why not get hassle-free financial advice from our pool of curated FAs on fundMyLife!

Don’t worry if you found the personal finance quiz a little too hard for your liking. We will be conducting a simple workshop on financial literacy soon so like us on our Facebook page!