Up, Up and Away .....

Happy new year, my fellow readers.  It is another brand new year and we are on the way toward another era of high living cost such as hike of charges on electricity, assessment, school bus ....  Pheww, how are we going to get through all these?

 

For years, I have been implementing personal inflation control and I manage to control my inflation rate between 0% and 2%.  How do I keep this rate?  Well, all I do so far is to control my lifestyle.

 

Can you recall when you first enter the job market, how much did you get?  Did you have problem with your first pay?  Well, I got my first monthly salary of $1,350 way back to about 20 years ago.  I was very excited and I managed to save about 80% of it.  I had limited committment then.  I had no housing and car loan to serve.  I had no girlfriend.  I did not have much entertainment but reading.  Yes, I spent only some of my earnings on buying books to learn how to be richer.

 

Of course, increasing in financial knowledge has make me to have better control over my personal finance.  However, for years, I have been saving lesser even though my active and passive income has been increasing.  What happen is that my lifestyle has changed.  I bought my house; I got married and had children; I have to spend more on household essentials as well as children's education .... The list goes on.  Despite of this, I still manage to save between 40% and 50% of my income with inflation rate between 0% and 2%.  Thanks to my effort on controlling my lifestyle.

 

You may wonder how my lifestyle is.  Basically, I spend on essentials without hesitation while control strictly over the spending on non-essentials.  I keep exercising this principle and my kids have been learning this well.  To me, these essentials include:

1. basic clothing that are enough to keep us warm:  We try to avoid branded products if the quality of normal clothing is acceptable
2. nutritious foods to keep us healthy to save our medical cost
3. a roof that could protect us:  We do not need a big house with rich neighbour around which we could save a lot as we do not need to act rich in front of the others for lifestyle matching
4. transportation that could bring us around:  All we need is a car with good safety features but we definately do not need luxurious car for this purpose
5. sufficient life insurance protection to our dependants
6. time to get around with family members
7. children's education
8. buy books

To save electricty , I:

1. do not own any air-con in my house. All I have are only four stand fans and a ceiling fan. My kids have no problem with this, even during the hot season, as they have adapted to it. Due to this lifestyle, sometime, we just can't stand for the low tempreture of the air-con room.
2. insist on no lights during sunny day: We read with natural sun light beside the window
3. insist to switch off the lights whenever they are not in used
4. unplug all the A/C plugs whenever they are not in used
5. change my fridge to inverter type
6. off the fans when the weather is cool

These actions have effectively reduce my electricity consumption by more than 45% a month.

 

Other living expenses control include:

1. seeking for offer items when comes to daily groceries shopping
2. doing the research via internet or site visit and compare the prices among a few merchants in order to get the best deal when comes to the purchase of big items

You may feel that my lifestyle is rather boring without much enjoyment.  Well, it is not true.  First, we buy books and enjoy our reading pleasure.  Second, we travel locally whenever we can by planning our trip a few months ahead in order to obtain good fares.  Most of the time, we go by "free and easy" which I could save a lot.  I even do the same for our overseas trip.  Just for your reference, in 2012, I brought my wife and children to HongKong and stayed three nights at four-star Disney Hollywood Hotel.  With all the travelling expenses (four air tickets, hotel expenses, four entry ticket for Disneyland and Madame Tassauds, eating out and transportations), I paid only about RM1,600 per pax in total.  The cost was about 40% lower than the market while we still able to enjoy our trip.

 

Anyhow, my message is that your lifestyle could affect your spending as well.  Since we can't do much on increasing cost of living, start to review your lifestyle is a effective way to control it.