Written by: Jane
Mon Sep 12 2022
I grew up in a family in which money could be an issue from time to time. I have witnessed how my parents struggle with money issues. I have lived with it long enough that it made me hate money and I have always avoided talking about it. As little money I own, I still have an urge to spend it without much thinking. Because lack of money hurts me, I want to fake that I have enough to spend on myself while in reality, I do not.
On this point, I think I can blame the education system as I cannot recall any moment that I was taught about finances. My parents also lack a good understanding of how to manage money. So yeah, I literally have to learn when I am already at this age (which is not quite old yet hehe).
The only thing that I took as my principle (from the hardship I went through) is to not let money lead me and to not let money interfere with friendship or relationships.
But in fact, I missed out on a lot of things about money until I just learned recently.
1. To save up for emergency fund
As I moved out from my parents, I now have to pay rent, groceries, transportation, and all the necessities. Of course, I can pay them with my salary but I never thought of what could happen if I suddenly lose my job. I clearly need buffer time to search for a new job, therefore, set-aside money for such a scenario is a must. The minimum recommended is a three-month budget and the ideal is a six-month budget. I haven't even reached the minimum yet :(
2. To save up for healthcare
I am now living in a country where the health insurance system is quite reliable as opposed to that of my country. So, basically, in case of a health issue, the insurance will cover however that means if I will need a longer treatment then I will have to be away from my job. I might or might not get any compensation from my company. This is what I have to prepare as well. I don't know how much it can be so I am planning to save a similar amount as for the emergency fund. But, I haven't started yet :/
3. A long-term savings or maybe a retirement plan
This I really never thought about at all. I don't know why but it just never crossed my mind until I heard about it from people. And, now that I know about it it is kind of scary. Like, how much money do I need to live just for the necessity when I get old? I feel like wow. I actually still haven't figured out how to save for this yet but people keep suggesting investment plans. The problem is that I am an ex-pat and there are a lot of uncertainties. I don't know where to start. Let me know if you have any suggestions.
4. To have a general saving
A general saving that can be further used for starting a business, returning to school, summer vacation, or maybe a wedding. This money should be easily accessible.
5. Maybe to save for real estate
Some people pay the mortgage for a certain number of years and when they retire they move to the countryside and in exchange, they use the value of the mortgage in the city as their retirement budget. I think it is smart. But it is really pressuring to be in debt for such a long time. Imagine having kids as well. I really hate being in debt but I guess it is really normal life.
Okay, although the points above seem very important however the most crucial part is actually acing in how to spend money wisely.
I really recommend not to be too luxurious on rent. I know an engineer manager who paid less amount of money on rent than I am. Recently, he just bought a flat. I guess he's only in his mid-30s which is very impressive.
Also, cooking and eating at home does save a lot of money. I do notice myself saving a lot when I moved outside of the center. Before, I ate out and ordered food very often. Paying for three meals outside equals the amount of money I spend on groceries for a week. This is very crazy obvious.
Another thing is tech materials, clothes or shoes. I really also spend a lot of money on them. What I did wrong was that I bought not-so-quality things and often ended up buying more or having to replace them earlier than buying the quality ones. My advice is to stick to buying a quality one and use it for a longer time.
Having a lot of friends - yes. More parties and more hanging out. I am not against this but yeah just don't say yes because only you can't say no. I don't hang out with just anyone as I have very few friends.
An expensive car never crossed my mind. I don't favor such things. I actually think that one person owning one car is very spoiled. They are polluting the environment, especially people in my country. While I am okay with a car for the family.
It's very energy draining to think about the future but we will be thankful for this later. I will quote "be kind to your present but also have a plan for your future self as well".
I believe money spent on food, health, wellbeing, experience, and education is a good investment. Other than that is just an illusion.
Speaking of that, I just spent money on another two trips :/ I really need to cut down on having over five trips per year.