Of course, many people will suggest to you the-old-boring-way of managing your expenses daily and monthly- have an Excel sheet or use a notebook to record your expenses. Well, this is one of the ways, but since it is an old and boring method, I won't go into it in detail.
My focus here would be, where your money has gone to ? I generally catagorized a few major expenses that eats up our income.
1. EPF & Taxes - Comprises about at least 15 % of your income (might go up depending on your salary)
2. Transportation
3. Food
4. Entertainment
5. Luxury
Believe me or not, most of the city folks actually spent the most for the fifth ietm, Luxury. This is where my focus will be on here. Luxury, bu the word itself is very subjective. Dictionary.com defines luxury as a material object, service, etc., conducive to sumptuous living, usually a delicacy, elegance, or refinement of living rather than a necessity. Many people might say, having KFC or Mc Donald's isn't a luxury at all; but is fast food a necessity? If it is not, I would consider that as a luxury. Some of the examples of luxury:
a. Having a good lunch especially on Friday
(I don't know why this is a trend for city people, but probably they might want to celebrate for the upcoming weekends). A lunch like this might easily cost a young working guy Rm 30, 4 Fridays in a month could easily costs Rm120, probably 8 % of the income already ( assuming income is RM2000 a month, same for all below)! But, don't go for lunch with colleagues makes you looks like an unsociable gig, how ? I will talk more about solutions to this in the next post.
b. DVDs
Have you ever calculated how much you have spent on DVDs? (pirated ones la of course) Each cost you RM10, and imagine you buy one copy every week. Yah , you have effectively spent 2 % of your income.
c. Indulgence
During one of the Merdeka day a few years ago, I had a shocked when i was driving around Subang Taipan. Guess what, it is 31st of the month, the Baskin's day. (Well, I have to admit, me too was once badly indulged in ice-creams before) People are pushing and queing for ice-creams. And, it's not free ! You still have to pay 69% of the usual price for the premium ice cream, and people are pushing here and there as if the ice-cream is given out for free. Most of the people are in their 20s, and i gues they just started to work not long ago. Indulgence is definitely one of the big bug that is eating up your big bucks. What do you think ?
d. Gadgets
How often you changed your handphones? Do you have a Bluetooth headset? Do you have an iPod or MP3 player ? Do you have a digital camera, when you bought that? I find that city folks like to keep themselves up to date with trendy gadgets. Do you think it is a neccesity ? I have a friend who actually took up a IPP(Interest-free Payment Plan) for her digital camera which cost Rm2000 2 years ago. That was a 3.2 megapixel model and guess how much it costs now ? How often you use your digital camera and yet you have to pay about Rm170 every month (which is about 10 % of income) for a year and yet grumble about not having enough money every month?
e. Cafe
Many youngsters like to hang out in cafes like Starbucks and Coffee bean, no wonder these cafes are mushrooming at an exponential rate in KL. Do you know that Starbucks have just revised their price by more than 10 % since 2007, or probably , you never really care about the price when you step in to those cafe? We like to feel the luxury(yes, that is the word) of sitting in a comfee cafe for a chat . Don't you think so ?
There are many more things about luxury and unneccesary spending. More will be discussed in the upcoming posts. The next few posts will still be focusing on solutions to cut down your expenses wihout depriving your lifestyle. Do give some comments if you have any.
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