Monday, June 6, 2016


Today I read a very interesting article online [click here for the article] that asked four different women (with different income brackets) on how they spend their money. Their income ranged between $1,000,000 to one that is on the poverty line. There was a similar article on the spending pattern of four men with incomes ranging similar to the women. What I found to be interesting is their spending pattern.

The millionaire spends very little, so little in fact, if he or she wasn't a millionaire, they would become one simply by how little they spend and how much they save their leftover funds. In fact, the millionaire spends almost as much as the one on the poverty line. The main difference between them is the level of debt, the millionaire has very little debt while the one on the poverty line is struggling to pay his or her debt.

What I find to be interesting is that, in all the men and women interviewed, almost all of them are very aware of how much they spend, how much they save, and how much do they put away for retirement. It is quite humbling to find out that the millionaire only spends about $1,000 ++ in monthly expenses. Although in Malaysia, it would be almost impossible to spend as low as $1,000 per month in monthly expenses due to the difference in prices between Malaysia and the US, but I would have to say, it is doable (if you put your mind to it).

I do try to keep track of how much I am spending in a month. My main issue is commitments, i.e. I have too many bills to pay for, hence, what I need to do is to identify whether I need a certain service or not. As I am currently living in KL, let me give you an example of my expenses here in KL:
1. I do not have a tv (for the reason that I hardly ever watch tv) so I do not have any subscriptions to Astro, Netflix, Iflix or whatever cable tv.
2. I have a broadband connection with and that is only because my mum requires internet at home (for when she comes to visit, which is quite often). If it was up to me, I could live with just my mobile data and my plan is to terminate this connection once it expires next year (by that time, most probably I would be back in Kuching for good anyway).
3. I paid off my car and so far there's no plans to get a new one.
4. I have one credit card. I used to have two, but I've terminated one of them last year. My current plan is to go for debit card but so far I haven't made that transition. Inshaa Allah next year.
5. I have three mortgages. Two properties are being rented out and is giving me a little bit of income (although not as much as I want them to) and I am staying in one of them. I chose to buy a studio when I moved to KL for the simple reason that it's cheaper to buy (monthly instalments are lower than monthly rent) and I could always sell this apartment once I leave KL (so far there are no plans to sell but we are thinking about setting up an Airbnb business, but that too, is not fixed).
6. I do have a personal loan which I took before I started my PhD. I had to take the loan because I really wanted to further my studies then and I hadn't gotten a scholarship yet. When I got my scholarship, I used the funds remaining from the personal loan to pay as downpayment for my third property. I must admit that taking a personal loan is among my biggest regrets because I think I could have survived without it and yet, now I am paying for it. So, no more personal loans for me in the future, inshaa Allah.
7. Monthly expenses: Petrol (around RM50 or RM70 a week), Food (around RM100 - RM140 per week, it could be more if I go for fancy lunches and dinners), Toiletries and miscellaneous (around RM100 - RM200 per week, it could be more if I sign up for running/ join other activities), utility bills and maintenance fees (RM400 - RM600 per month) and insurance/ takaful for me and Alexa (RM350 per month). I calculated roughly on the minimum side I would have about RM1750 monthly expenses, right?

I don't know whether my current monthly spending is too high or too low, but according to my own calculations, it's quite reasonable. Indeed I do feel that I would prefer to pay lesser bills but so far, I think I have minimised what I can.

So, what gets me into trouble with spending? A few years ago, the main culprit used to be traveling. I used to travel two to three times a year and although by itself, one trip is affordable, but when you have too many trips in a year, my travel budget would be eating into funds which I am supposed to use for other purposes and this contributed to an increase in my credit card debt. I have since reduced my traveling plans while I reorganise my budget and have started to only travel by cash (i.e. pay my flight tickets, accommodation, and any other spending all in cash).
Another big culprit for me is shopping, and perhaps it's the lure of online shopping as I do not go out very often (I currently have very little spare time and I only go to shopping malls if there is a need for something). I have discovered that I have a certain weakness for instagram posts and there are so many beautiful not-to-be-missed items out there. Realising this weakness of mine, I've decided to unfollow some instagram accounts (prevention is definitely better than cure), and go through a mental list in my mind if I want to make a purchase. E.g. let's say I see a pretty dress (I currently love the designs by aere and love-to-dress), I would make a mental note in my head counting the dresses that I have and whether there is a need for a new one. And considering the size of my wardrobe, usually there is no need for a new scarf/ dress/ sandals/ running shoes/ handbags/ running gear etc.
Another spending trap would have to be food because we Malaysians are notorious foodies. However, since I have no time to eat out, so far that is not a problem for me.

So, I'm going to throw out this question to you: 

How's your spending like? 

For me, I know I don't spend a lot really, simply because I do try to rationalise whether what I intend to buy is a need or a want, and usually it's a want. Before I make that intention to purchase, I evaluate:

1. Do I need new shoes?
I have 2 flats, 2 sneakers, 1 jogger, a pair jungle-trekking shoes, 2 sandals and 2 flip-flops, and these are only from the ones I have in KL, not to mention the ones in Kuching.

2. Do I need a new scarf?
I have been eyeing a scarf from dUCk for a while now but haven't made committed to making the purchase simply because I know I have too many scarfs and I have changed my priorities in spending.

3. Do I need ... ?

In my case, it's apparent that in most cases I don't.

So do you have trouble in your finances? 

If you do, my first suggestion is to evaluate your spending pattern. Try to let go of what you do not need. Earlier this year I reduced my phone plan with DiGi and went for a lower bill which suited my needs, and let go of my Maxis broadband for the iPad. Is there a service that you only occasionally use? If you could live without it, then let it go.
For most people, their biggest spending could be bills (then minimise where you can), food (homemade food taste better and are healthier, believe me), travel (we have plenty amazing destinations in Malaysia for us to visit), or even kids (instead of spending money, spend more time with them by bringing them to the library or the park).
If you find that you have too many commitments, although it is recommended to repay the ones with the highest interest, I would recommend (based on my own practice) to repay the smallest amount due. If you have money owing to friends and families, do repay them first because, their dua'a (when you've made payment) could open doors to bigger and better rizq. And then move on to the next one. Identify your weaknesses and address those weaknesses. Have a support partner which would knock some sense into your head and be realistic with yourself.

Always remember that the life of others should not be a benchmark of how you live your life. We see beautiful photos and glamorous lives of celebrities and public figures, and all praise be to Allah for enabling them with more than what they need. But we may not necessarily need to wear what they wear, eat where they eat, drive the car that they drive etc. We attain happiness by being who we are and becoming a better version of ourselves.

If you need to spend, spend more time investing in a better you =).

Have a blessed Ramadhan.

xoxo Mrs Fashionista

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