September 16, 2013

How To Save Money

We live in a consumerism world and we are pushed to live a certain lifestyle. But we are not all Jane Aldridge, Man Repeller and Blonde Salad. Most of us can’t afford Prada shoes every month unless we live at home, have wealthy and generous parents or we have a rich boyfriend/husband to mooch.

I always thought schools need to teach you basic finance as I know so many people who doesn't know about credit lines, loans, and just managing money in general. Even though they have a full time job, they have a huge debt, no savings or still rely on others to financially support them.

I’m grateful for my parents teaching me how to handle my finance. I am not from a wealthy family, I have a 9-5 job and I'm 100% financially independent. And thanks to my parents' teachings, I own a house, a nice car, my Chanel, Louis Vuittons and other luxury goods and still manage to have money to travel. Currently I’m working on buying another house. So I thought I'd write some tips I follow.

Keep in mind that while I save, I also go out a couple nights per week and splurge when I feel the time is right- every pay cheque day I take my boyfriend out for a fancy dinner and drinks, and I’m a sucker for splurging on skincare and designer bags…

How NOT to Save 
1) Penny pinch and become a life hating Grinch.
2) Cheap out at other’s expense. Ie give shitty tips, bumming drinks off people, "forgetting" to pay your friend back. Not cool bud. Not cool.

How To Save 

1) Don’t spend more than you make
I used to work at a restaurant where a lot of times you only make about $40 tips. Still, the staffs there get a Starbucks coffee & muffin before they start and a full-not-the-cheapest-meal during. They then have a few beers and food after work. Those guys take home less than $40 at the end of the day. #SadPanda

2) Pay off your student loan ASAP
… And put more than just the principal payment! You only have 6 months grace period after graduation before the government start charging for interest. Even if the interest rate is 3%- 3% of $50,000 is a hefty $1500. That’s enough for a Chanel wallet or a nice trip. Yes, school is busy and stressful, but $3 coffee in the morning and $10 campus food daily doesn’t help with that loan.

3) Don’t EVER borrow from VISA
Interest rate for Visa is around 6%, to quote my dad: "They're highway robbers!". Don’t be stuck paying that 2 week Thailand trip for the next 2 years. One less vacation or luxury product isn’t going to kill you.

4) Hide your money
Set up your bank to have automatic withdrawal to your savings account on your payday so you don’t even see that money. You can’t spend what you don’t see. But when you do check on it every blue moon- you mentally ho ho ho giggle like Santa Claus.

5) Stop buying crap
You don’t need another neon shirt. You don’t need those trendy yellow and blue reflector sunglasses. You don’t need a baroque print skirt. You and I both know that they go out of style and take up closet space. They clutter your life and when you look at them a year later you will regret buying them. Save your money and invest in a timeless purchase.

6) Decide what to cut and what to splurge
Instead of a personal trainer, spend it on a basic gym membership and have a mental commitment. Instead of having an alcoholic drink at a restaurant, go for pop, or better, water- more healthy for you anyway. Instead of the $5 gelato, spend the $5 on a tub of Breyers at the grocery store and you can eat it for weeks. Instead of a weekly manicure, just upkeep it yourself- People won't judge you if you don't have a perfect manicure (And if they do, they need a life and you need new friends). And you don’t need gourmet organic culinary bread. It’s nice to have those things, but they should be treats, not habits. Wouldn’t it be nice to cut those little costs to save for a cheap trip to Mexico, or buy that Alexander Wang bag you keep on eyeing?