- Personal Finance
How I save money as a self proclaimed Shopoholic
Today I was watching "Confessions of a Shopaholic" on television and it suddenly dawned upon me that there are so many elements of the show that struck a chord with me and I was immediately inspired to write a hub about saving money.
I am a shopoholic by nature and if I have ten dollars in my pocket, I would spend it all. Hence drastic measures have to be taken if I don't want to end up without a retirement fund in my golden years.
In this hub, I will be sharing with everyone some of the things I have done to help save my money while still having enough to shop and be happy.
Insurance Savings Plans
I lock away 25% of my income every month in insurance savings plans. I like it because I get to be covered against accidents/death and at the end of a set amount of time I will be able to amass a sum of money.
Although some people might argue that insurance savings plans do not yield that high of a return and one should simply go for something like a "term insurance" for coverage and a separate investment tool to grow your savings, I feel that it is only when I commit to the plans that I actually force myself to set aside money and save.
Hence using this method to save a portion of my income actually works out for me.
Monthly Savings Auto Debit
The concept is that you have an agreement with the bank to automatically debit a fixed amount of money from one bank account to a fixed deposit account every month before you can touch the money. Over here in Singapore, it is known as a monthly savings plan scheme (or similar).
I set up my accounts such that at a certain date of the month (usually when my paycheck comes in) the bank will automatically debit that fixed amount into another account. This account is set up in such a way that if I were to touch the money in it, I would lose a substantial amount of interest.
This technique is slightly more flexible than insurance, which you absolutely cannot touch if you want to let it mature, as it gives you the option to withdraw without losing the capital.
That being said, this little tip works really well for me as I can see the money grow every month and the thought of losing the substantial interest gain deters me from touching the account.
Splurging only the shopping account
I created a bank account where I put money for my shopping. I am allowed to splurge and spend everything in this particular bank account without guilt. However, once I have completely drained it, I am not allowed to spend anything more on shopping till I top it up.
This method is awesome because I feel really happy and rich spending everything in it while knowing that I won't become a bankrupt when I wipe out this account. It's like budgeted splurging, if it makes sense?
Every cent counts
I have an internet banking account, and I use the internet banking access pretty often to access my accounts. Whenever I see that my balance has cents to it, for example $390.53, I would transfer $0.53 to my fixed deposit account.
Do not underestimate the power of cents, these little cents here and there actually can add up to quite a substantial bit of savings and you won't feel the pinch putting them aside. Try it!
I know myself, and I like to have the freedom to be able to buy things while still being able to have savings. These are the methods that I have adopted for myself to fit into my lifestyle.
I hope you have found these tips useful and if you have some of your own, do share them in the comments below.