Why you should have a financial balance

I read many articles that talk about prudence and frugality. The message across is a timely reminder as an individual should not spend beyond their means, especially the high inflationary pressures in Singapore. In other words, think about saving first (paying oneself) before paying off your bills, much least spending the extra cash. Think about your emergency fund first. Think about delayed gratification, so that you can build your cash flow.

However, being superbly obsessed with every dollar and cent may bring you to the point of over practicality, such that you get upset if you spend twenty cents more over a cup of coffee. What I mean is, you hold the reign of money in such tight control that you forget the essence of life’s little pleasures - your wishlists, hobbies or self-gratification pursuits. These activities need money, no matter how less or more it is, to fulfill your desired life's journey. It can be a backpacking trip, a dance workshop, a craftsmanship apprentice program. Anything that adds value to your personal holistic life experiences. It can also be a trip with your loved ones or spending on a deserving meal that brings people together. For laughter, for bonding (you need to spend on food). Therefore, are you losing your vision completely?

Certainly, you do not want to end up a terrible miser who loses important friends or girlfriends because you are scared to spend. If you are, you may become tense and worried at the slightest mention of the word "spend". You are trapped in the soul of money that life becomes worthless to you. The hoarding of money turns you into an evil warlord that drives your buddies into oblivion. You may think I may be going to the extreme but trust me, I used to meet people who may not realize this is happening to them, though they are earning decent income with less commitments - all circumstances remain equal (not referring to any household wealth or unfortunate incidents that warrants a high level of money cautiousness). They become lonely and alone, for the sake of every growing money tree without inhabitants.

I used to have an Army friend who will walk the extra mile to McDonald’s than spending 20 cents for a washroom, simply because it’s free for the latter. The distance was 1km away. Due to his over “thrifty” habits, he started to take advantage of people during friends’ gatherings. For instance, he won’t buy a drink, citing that his throat was well. In the next minute, you would see him sharing drinks with a friend – and downing a full mug of beer without being apologetic, without politely asking. Later, we found out that he was reluctant to spend in general and like to maximize freebies whenever the chance. So that, he can save the last dollar. The last I knew about him? His friends deserted him.

For the financial experts who quote - it’s important to have a monthly spreadsheet, a tracking apps or something you do to ensure your personal finances are healthy. I agree fully. Another alternative is to develop your personal custom-made system of cash flow. But the degree of dissecting it into tiny bits and pieces could be time-draining and mind boggling. Imagine this. Let’s say you have your lunch with colleagues. You go to a coffee shop and order a cup of hot tea. This costs 90 cents. You key into your expense tracking apps. For food, you order a plate of chicken noodles that costs $3.00. You key into the same apps. You feel a bit hungry, so you hop to the nearest bakery to buy a bun. This costs you $1.20. You key into the apps. Multiply this by two (lunch and dinner, taking out breakfast). Do this constantly in 30 days and in one calendar year. Continue the same process for 5 consecutive years. This is only for food expenses only (wow! I still have other expenditure to monitor – am I using my value time to do mindless chunks and chunks of data?)

You can be proactive, getting sensitive to every number. Question is, will you get too bogged down till you are conditioned to think “Hey, I spend $200 on food and if I want to buy a box of egg tarts for my loved ones (once-in-a-while surprise), I can’t do so. My budget has exceeded and I have to wait till next month. And the next month arrives; you are too caught up with daily nuances of keeping track till you lose the sight of people who appreciates you.

Just me and my money. Me and my precious…………the one ring I conquer, the one magical DIGIT that I must, at any costs, achieve no matter the situation......

Please, don’t fall into the invisible “money entrapment”. Your life is worth more. Be sure to live what you want. You do not know what happens the next day.

On the other hand, if you’re tracking tool works perfectly fine without causing you a hindrance in daily/monthly life pleasures, I can imagine you having a good financial balance. The word pleasure differs from individual to individual. For instance, an individual can buy a Starbucks Coffee Grande size. To him, this is money well spent, for something he wants, defining it as “pleasure”. Some prefers the coffee from hawker centre. This is absolutely fine. As long as the individual manages his cash flow in his personal system well, not getting overly obsessed. Also, I will like to reiterate that, for every cup of Starbucks Coffee, the individual may save on other items. I am referring about giving something up to gain something.

It should not be an addiction to things otherwise the financial balance is gone. Ended up paying more than what you can afford. One may argue that being a millionaire is great, so you need to think about it. True, the mindset is essential. It all starts from aspirations. Fully support. But one has to self-reflect - at what opportunity cost?

For example, if you reach the millionaire status at 50 years old, for all the hard, frugal life you build up, have you seriously traded off your days of youth frolicking around, trying new things? - just because this millionaire goal is more vital than any of your priorities. Henceforth. lead you to stop spending, except for daily survival.

To me, paying for memories are crucial. It's my chapters of life. Moreover, I like travelling with a purpose. Through paying my dues beyond Singapore, I carry knowledge that is far more superior to money. I gain new skills and new exposure to finer things around me. I strengthen my cross-cultural communication abilities by interacting with local people in the host country. With my global horizon, I can source for scaled up job offers since globalization trends begun in the new age. Headhunters look for me as companies need global thinkers.

For my loved ones that I spent on travel, I earned the companionship filled with joy and laughter. You can be different. You can spend on certain products and services that generate a wonderful purpose for you. Purpose is what you need to seek, not money. Money is just the ticket to your objective.

There are also individuals who buy a Prada or Louis Vuitton bag, as part of luxury ownership. It does not mean they are high spenders who purchase regularly (unless they do and this topic is out of question). They may just get one expensive item for someone or a few for personal keepsake (maybe resale in future). Their objective is to look good, probably needed in their jobs or to serve a particular want (“once in a lifetime” item). Point is, are they over-spending on these items/become addicted?

In short, whatever we spend, whatever we save, the individual has to understand that the importance of financial balance. The purpose of spending vs. the purpose of growing your cash flow. The middle portion is the one you need to seek out. For any reasons, keep your cash tap running but not too frequent or seldom. Appreciate the opportunity to smell the roses and taste the wine in every aspect of your life.

Soon, you will realise money becomes meaningful for you. You will not be a complete slave-driver to Mr. Money, one who constantly thinks about money-making activities (e.g. investments). Just to attain the status of millionaire or in fact financial freedom at the expense of many other worthwhile things in lives. Like myself, I will still strive to create more multiple streams of income while developing the habit of meeting this balance. I know the underlying purpose of spending and I don’t have a rigid framework to keep my wallet bounded. I hope you can find your personal financial balance in life too.